Broadcom Inc. President and CEO Hock Tan's total adjusted compensation climbed to $161.8 million in 2023 with the receipt of a $160.5 million stock grant, making him the highest-paid CEO on the S&P 500 for the year, according to an analysis by S&P Global Market Intelligence.
Tan's stock grant was front-loaded to cover five annual cash incentive payouts and five years of annual equity awards under an employment agreement with Broadcom, according to the company’s proxy filing. He was ranked as the sixth-highest compensated executive in 2022.
Impact of stock, option grants
Stock grants of $145.4 million also largely factored into the salary total for Palo Alto Networks Inc. Chairman and CEO Nikesh Arora, who ranked second with $151.4 million in total adjusted compensation.
Of the remaining eight S&P 500 company executives who ranked in the top 10 by total compensation, five received stock grants, none of which exceeded $50 million in value. However, two executives received option grants representing over half of their overall compensation, with Charter Communications Inc. President and CEO Christopher Winfrey receiving a $75 million award and Netflix Inc. President and co-CEO Theodore Sarandos netting a $28.3 million award.
Winfrey's total adjusted compensation was 1,635.2 times the median salary of Charter's employees. This is the third-highest CEO-to-employee pay ratio among S&P 500 companies that reported this data for 2023, behind The Coca-Cola Co. and Ross Stores Inc., according to Market Intelligence data.
In its 2023 proxy filing, Charter said 75% of Winfrey's compensation was tied to equity awards intended to provide value over five years. When annualizing the value delivered over the period, an adjusted alternative pay ratio for Winfrey was calculated at 656.3.
Biggest pay jumps, declines
Arora's 2023 total adjusted compensation and total stock and option awards both rose the most year over year compared to all other S&P 500 company heads.
American Airlines Group Inc. President and CEO Robert Isom's compensation in 2023 rose over 543% year over year to $31.4 million, the second largest change.
Besides Palo Alto Networks' Arora, only two other S&P 500 chief executives ranked among the top 10 for both total adjusted compensation in 2023 and the largest year-over-year increase from 2022: Charter's Winfrey and Fair Isaac Corp. President and CEO William Lansing.
Six of the 10 highest-paid S&P 500 chief executives saw their total adjusted compensation rise in 2023 from 2022. The payout of Blackstone Inc. Chairman, CEO and co-founder Stephen Schwarzman dipped the most with a 52.7% decrease.
However, Schwarzman received the largest base compensation among the 10, with $119.8 million, ranking him as the third highest-paid CEO in 2023 behind Tan and Arora. Schwarzman did not earn additional incentives beyond his base compensation.
Sector trends
Companies with the highest-paid executives in 2023 were skewed to the information technology and communication services sectors of the S&P 500. These companies included Broadcom, Palo Alto Networks, Charter, Fair Isaac, Apple Inc., Netflix, and Warner Bros. Discovery Inc.
Share prices gained over 110% for Palo Alto Networks and 100% for Broadcom throughout 2023. These both outpaced the 56.2% rise in the S&P 500 information technology sector and 23.9% growth across the broader S&P 500 index.