The vast pay packages of top executives have always been a topic of scrutiny, but the 2024 analysis by The Wall Street Journal sheds light on the extraordinary compensation received by CEOs in S&P 500 companies.
With a focus on corporate giants across various sectors, the analysis reveals startling differences in how CEOs are compensated, especially when comparing the likes of Axon Enterprises’ Rick Smith and Apple’s Tim Cook.
Smith’s staggering compensation surpasses Apple’s Cook by a wide margin, and the pay disparity underscores the growing pay gap between the highest-paid executives and their counterparts in other industries.
According to the report, the CEO of Axon Enterprises, Rick Smith, received the highest pay in 2024, earning a remarkable $164.53 million. This amount not only dwarfs the earnings of other tech leaders but is also a testament to the growing influence of companies that provide essential public safety products.
Smith’s compensation, with a hefty portion tied to stock awards, stands as an example of how performance-based pay continues to dominate executive compensation strategies. As companies like Axon rise in value and market capitalization, the compensation of their CEOs increases proportionally.
Smith’s pay package is a standout among S&P 500 executives, and his compensation has been tied closely to Axon’s market performance. In 2024, Axon Enterprises, the company known for products such as Tasers and body cameras, had revenue growth of more than 30% for three straight years, with a record net income of $377 million.
The company’s market capitalization reached over $58 billion, highlighting the significant financial success Axon has experienced under Smith’s leadership. Smith’s compensation is largely tied to stock performance, which means that his earnings are directly linked to the company’s ability to meet financial targets set for the years ahead, extending to 2030.
This model reflects the increasing trend of performance-based compensation among top executives, with stock awards becoming an integral part of pay packages across many sectors.
These stock options incentivize CEOs to meet or exceed performance goals, which in turn benefits shareholders and boosts the company's overall valuation.
Following Smith at the second spot is Lawrence Culp Jr., CEO of GE Aerospace, with a compensation package of $88.95 million in 2024. Culp has been instrumental in steering General Electric through one of the most transformative periods in the company’s history, especially as GE split into three independent companies.
GE Aerospace, now a key segment of GE’s operations, has flourished under his leadership, and the company has benefited from an increased focus on innovation and efficiency in the aerospace sector. Culp’s pay package reflects his success in overseeing this transformation and navigating GE Aerospace through turbulent waters.
He is widely regarded for his ability to pivot and restructure the company to meet the evolving needs of the global aerospace market. His compensation package, which includes stock awards linked to the company’s future performance, further emphasizes the growing reliance on long-term incentives in executive pay.
Coming in third is Stephen Schwarzman, CEO of Blackstone, who earned $84.03 million in 2024. As co-founder of one of the largest private equity firms in the world, Schwarzman’s pay package is closely tied to Blackstone’s growth and continued success in managing assets across various sectors, including real estate, energy, and technology.
Blackstone’s impressive financial performance, with nearly $1.2 trillion in assets under management as of March 2024, has made Schwarzman one of the wealthiest and most influential CEOs in the private equity space.
His compensation package, which includes stock awards and other incentives, is reflective of Blackstone’s dominance in the asset management industry and the strategic vision Schwarzman has used to guide the firm to new heights.
Apple’s Tim Cook, a household name, rounds out the top four with a compensation package worth $74.61 million. While this is a considerable sum, it pales in comparison to the compensation of Rick Smith and others.
Cook’s compensation, which includes cash, equity, and other forms of reward, is reflective of his leadership over one of the most successful companies in the world. Since becoming Apple’s CEO in 2011, Cook has led the company through a period of unparalleled growth and innovation, making Apple the world’s most valuable company.
While his compensation package is significant, it is noteworthy that Cook’s pay has remained relatively modest compared to the highest earners in the S&P 500, despite Apple’s market dominance and his critical role in the company’s continued success. This may be due to Apple’s emphasis on long-term stability and innovation rather than short-term incentives.
Cook’s leadership has helped Apple launch groundbreaking products, including the iPhone, iPad, and Mac, while also overseeing the expansion of Apple’s services division, which has become a crucial part of the company’s business model.
Joseph Bae, co-CEO of KKR, ranks fifth on the list with a compensation package of $73.09 million. KKR, one of the largest private equity firms globally, has thrived under Bae’s leadership. In 2024, KKR generated $21.9 billion in revenue and $3.08 billion in net income.
Bae’s success in managing KKR’s vast investment portfolio and his ability to lead the firm through a competitive and ever-evolving financial landscape are reflected in his pay package.
KKR’s investments span a variety of sectors, from real estate to healthcare to technology, and its success in these areas has contributed significantly to the company’s overall growth. Bae’s compensation, which is tied to KKR’s continued success, reflects the firm’s increasing prominence in the private equity industry.
The remaining executives in the top 10 highest-paid CEOs include notable leaders such as David Gitlin of Carrier Global, Scott Nuttall of KKR, Ted Sarandos of Netflix, and David Simon of Simon Property Group.
These leaders have overseen companies in industries ranging from real estate to entertainment, and their compensation packages are a reflection of their ability to steer their respective companies toward profitability and success. For example, Sarandos, as co-CEO of Netflix, has been a key figure in the company’s growth and global expansion, while Gitlin’s leadership of Carrier Global has been instrumental in driving innovation in the HVAC industry.
The pay disparity among CEOs in the S&P 500 highlights the growing issue of income inequality. While more than half of the CEOs in the survey earned at least $17.1 million, the top earners make much more, with Rick Smith’s compensation standing out as the highest in the survey.
This trend of increasing CEO compensation has sparked ongoing debates about fairness and the widening pay gap between top executives and their employees.
The growing reliance on stock awards as part of executive pay packages has contributed to the rising compensation, with companies rewarding their CEOs for long-term performance that benefits shareholders.
Some of the most well-known billionaires, such as Warren Buffett, received relatively low compensation. Buffett’s pay was valued at $405,000, which is about five times the median salary of a worker at Berkshire Hathaway.
This is a stark contrast to the compensation received by other executives, highlighting the vast differences in pay even among the wealthiest CEOs. Tesla’s Elon Musk, another notable billionaire, received no compensation for 2024, but his multiyear pay package, valued at $56 billion, is still the subject of a court battle.
This further underscores the growing complexity of CEO compensation and the increasingly complicated relationship between stock-based pay and executive performance.
As the gap between CEO pay and worker compensation continues to widen, many are calling for a reevaluation of how executive pay is structured. Sarah Anderson of the Institute for Policy Studies has pointed out the growing problem of excessive pay gaps and the negative impact they can have on employee morale and corporate effectiveness.
While some gains have been made in worker pay, especially for those at the bottom of the wage scale, many workers in the world’s richest countries still struggle to make ends meet.
The rising pay of CEOs, paired with the stagnation of wages for lower-level employees, has led to growing dissatisfaction and calls for more equitable compensation structures.
While there has been some progress for female CEOs, with the number of women on the top-paid CEO list increasing, overall progress in gender equity has been slow.
The median pay for female CEOs in the survey rose 10.7% to $20 million, while male CEOs saw a 9.7% increase. Judith Marks, CEO of Otis Worldwide, earned the highest pay among female CEOs, with a compensation package of $42.1 million.
While the increase in female representation on the list is a positive sign, experts argue that more needs to be done to address gender disparities in corporate leadership.
Another trend that has emerged in the wake of the rising pay of CEOs is the growing focus on security perks as part of executive compensation packages. In response to security concerns, such as the December shooting of UnitedHealthcare CEO Brian Thompson, many companies have increased their spending on security for top executives.
In 2024, the median spending on security for S&P 500 CEOs rose to $94,276, up from $69,180 in 2023. This trend reflects the increasing risks faced by top executives and the growing importance of ensuring their safety as they navigate complex and high-stakes corporate environments.
As the compensation packages for S&P 500 CEOs continue to rise, the question of income inequality remains at the forefront of discussions surrounding corporate governance.
The rising pay gap between executives and workers raises important questions about fairness, corporate responsibility, and the sustainability of such vast disparities in compensation.
It is clear that the issue of executive pay is not going away anytime soon, and it will continue to spark debates about how best to balance the interests of CEOs, shareholders, and employees in the years to come.
