When Tesla awarded Elon Musk a multibillion-dollar pay package in 2018, the landmark deal helped to vastly increase the potential compensation of the CEOs at many of America’s biggest public companies.
The package was composed entirely of an enormous stock grant tied to the company’s performance. As Tesla has sold enough electric vehicles to become the most valuable automaker on the planet, Musk has so far received shares worth nearly $60 billion – helping to make him the world’s richest person.
Compensation experts say they see the influence of Musk’s deal everywhere.
“There’s a lot of companies out there that saw that award and its structure,” said Brian Johnson, executive director with ISS Corporate Solutions, which advises businesses on executive pay and other practices. “They think it’s a good way to incentivize performance.”
A new survey conducted for The New York Times by Equilar, a compensation consulting firm, shows that many of last year’s highest-paid executives got packages that, like Musk’s, could pay out the sort of sums that would have been unthinkable a few years ago. And even as the gap between what executives and workers earn continued to widen during the pandemic, companies opened the floodgates for what they paid their leaders in 2021.