When some tech giants neared or imposed prevalent layoffs last year, compensation for their CEOs climbed as substantially as tens of thousands and thousands of dollars, in accordance to an ABC Information investigation of information launched by analysis organization Equilar in Could and June.
Alphabet CEO Sundar Pichai was awarded payment worthy of much more than $225 million in 2022, which marked a staggering 3,474% increase from the prior calendar year, creating him the nation’s greatest-paid out CEO, according to Equilar knowledge.
In close proximity to the outset of 2023, Alphabet introduced ideas to lay off 10,000 employees.
At Microsoft, which initiated designs to lay off 10,000 personnel in January, CEO Satya Nadella acquired compensation worth almost $55 million in 2022 — a 10% jump from the prior yr, the data showed.
Meta, Uber and Salesforce are also between a lot more than a dozen tech organizations that gave their CEOs a payment enhance past 12 months, in spite of saying layoffs at some issue since the start of 2022, according to the ABC News investigation of the Equilar data.
Dara Khosrowshahi, chief govt officer of Uber Technologies Inc. speaks in the course of a presentation in London, on June 8, 2023.
Hollie Adams/Bloomberg via Getty Visuals
Approximately 389,000 tech workers have been laid off due to the fact the commencing of 2022, according to Layoffs.fyi, a website that tracks layoffs. The occupation cuts have befallen some of the nation’s most nicely-recognized and large providers.
Alphabet, Meta, Uber and Salesforce did not react to ABC News’ requests for remark.
The increase of CEO pay amid a cascade of occupation losses at some home-name tech corporations attracts awareness to the divergent fates of executives and employees in just one of the nation’s most profitable fields, which matches an financial state-large pattern of a widening gap in between the spend of CEOs and personnel, analysts explained to ABC News.
CEO compensation typically consists of a base wage and a functionality reward but is generally produced up in huge section by inventory awards that align the CEO principally with shareholders, analysts added. The incentive composition can thrust a CEO to safeguard the health and fitness of a firm but also reward short-phrase charge cuts that imperil employees, they claimed.
The disparate outcomes for CEOs and personnel at some tech corporations heightens an ongoing dispute about whether businesses must shift thing to consider towards other stakeholders outside of buyers, this sort of as staff members and buyers, David Larcker, a professor of accounting, Emeritus, at Stanford College who researches corporate governance, told ABC News
“It is a enormous problem,” Larcker explained. “From a CEO’s perspective, if you have to shut down a thing that is not successful, you can obviously improve the stock price and earnings and get a large reward out of that.”
From workers’ place of perspective, in the meantime, “businesses have a good deal to say about how workers are their most critical assets and at times actions look a large amount extra shareholder-pleasant,” Larcker additional.
To be sure, Equilar calculated the value of CEO payment offers when they ended up awarded at the outset of past fiscal year. For several corporations, the stock cost had dropped by the conclude of the year, leaving the CEO’s payment reduced than the determine listed by Equilar. The worth of Pichai’s compensation bundle, for occasion, fell to about $205 million by the conclude of fiscal 12 months 2022, in accordance to a adhere to-up Equilar assessment shared with ABC Information.
Less than the phrases of Pichai’s payment package, he will not receive the total value except the firm achieves a established of goals, which include sturdy inventory overall performance relative to other large corporations, a government filing exhibits.
In the meantime, the best value of the compensation bundle obtained by Nadella is dependent on a variety of firm general performance metrics that “are intended to be complicated but attainable,” Microsoft told shareholders in December.
Months earlier, in May well 2022, Microsoft introduced an enhance in its funds devoted to shell out and inventory payment for personnel that 12 months. The firm will not give raises for salaried staff members in 2023, according to a corporation memo initially claimed by Insider in Could.
In reaction to ABC News’ request for comment, a Microsoft spokesperson famous that the compensation awarded to Nadella final calendar year preceded the layoff strategies introduced in January.
The huge the greater part of the payment awarded to Zuckerberg in 2022 is devoted to his security and use of a non-public plane, Meta advised shareholders. Considering the fact that 2013, Zuckerberg has received an yearly salary of $1.
The value of a stock award made up 70% of the regular compensation bundle for the 100 maximum-compensated CEOs last 12 months, Amit Batish, director of written content at Equilar, informed ABC News. Business overall performance thresholds typically found in CEO compensation deals include things like stock general performance, profits expansion and product consumer totals.
Career losses in the comparatively very well-compensated marketplace, in the meantime, have coincided with if not strong employing throughout the financial state, which offers an unemployment amount hovering close to a 50-calendar year lower.
“Specially in tech, I consider it is really a shock to tech staff who have always been in such high demand to be going through these layoffs,” Lisa LaViers, a professor at Tulane University’s Freeman Faculty of Organization who research govt fork out and its result on staff, instructed ABC News.

Vehicles generate in the vicinity of Google places of work on Jan. 25, 2023 in New York Town.
Leonardo Munoz/See Press/Corbis by means of Getty Images
At tech companies exactly where CEOs acquired an improve in compensation along with layoffs, the divergent fortunes possible exacerbated worker dismay, LaViers additional.
“If you gave the CEO a substantial bonus and you laid off a good deal of staff, I can not think about a state of affairs less than which that wouldn’t upset staff,” she explained.
Crucial attributes of executive and employee compensation complicate the moral outrage, nevertheless, LaViers explained.
Govt compensation often consists of inventory possibilities that can’t be marketed inside a yr of when a CEO gets them, this means that compensation acquired in a presented yr does not automatically equate to cash introduced in by an government. Meanwhile, many non-govt amount tech personnel obtain inventory possibilities as element of their payment, tying their revenue to that of shareholders, she explained, nevertheless employee inventory alternatives are a portion of what CEOs get.
Uber, which has laid off hundreds of personnel this 12 months, gave CEO Dara Khosrowshahi compensation truly worth about $24 million in 2022, which amounted to a 22% increase from the preceding year, Equilar knowledge confirmed.
A corporate worker laid off by Uber this year, who asked for anonymity for dread of negative consequences if they spoke publicly, described the dynamic of task cuts together with shell out increases as “really discouraging.”
Responding to Khosrowshahi’s thrust for a “society improve” that concentrated on the mission-based aspirations of Uber, the laid-off worker questioned, “Did Dara definitely care about carrying out the proper factor?”
“You can find a whole lot of lip provider paid to ‘Oh, we want to have a culture’ but it is all in the company of profitability,” the laid-off worker additional.
Soon after imposing a round of layoffs past month that impacted up to 50 workforce at Uber’s trucking subsidiary, Uber Freight, a organization spokesperson explained to outlet Freight Waves in a statement: “On the back again of performance gains recognized across the business enterprise and to assure continued alignment between our value framework and the present marketplace realities, we are minimizing the workforce in our Brokerage small business across a tiny quantity of roles.”
The full compensation package deal awarded to Khosrowshahi is dependent upon the company’s fulfillment of important aims, Uber told shareholders.
Similarly, a worker interviewed by ABC Information who was laid off this calendar year by data-storage organization Western Digital expressed disappointment after finding out that CEO David Goeckeler acquired a 42% pay out maximize in 2022, according to Equilar facts.
“I was earning funds for this male as an alternative of producing income for myself,” reported the worker, who asked for anonymity due to the conditions of a severance settlement. “It truly is the illness of the entire procedure.”
To get the total benefit of his compensation package, Goeckler should obtain a variety of limited- and extensive-expression business functionality goals, Western Digital told investors.
Western Digital did not promptly reply to a ask for for comment.
Larcker, of Stanford College, stated that a company change in concentration absent from shareholders and toward other constituencies could restrict cases of egregious divergence in between the outcomes of CEOs and employees. However layoffs, he extra, are unavoidable, in particular in tech.
“Tech is a dangerous organization,” Larcker stated. “But businesses can be improved off when they change course in a way that does not crush personnel.”