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Jensen Huang’s first salary increase in ten years
Jensen Huang, the co-founder and CEO of Nvidia, has recently experienced a notable change in his compensation package. After a decade of receiving a fixed salary of $1 million, Huang’s base salary has increased by 49% to $1.5 million. This adjustment comes as Nvidia’s market capitalization has skyrocketed from $10.47 billion in 2015 to an astounding $2.94 trillion as of early 2024. This increase, as highlighted by CNBC, signifies a remarkable growth trajectory for Nvidia, making it one of the most valuable companies globally.
A closer look at Huang’s compensation package
Alongside the base salary adjustment, Huang’s performance-related cash compensation has also seen a significant rise. It has climbed to $1 million, which is a 50% increase from the previous year. Additionally, the equity portion of his package has reached $38.8 million, culminating in a total annual compensation of $49.9 million. The board of directors has emphasized that this increase was necessary for maintaining internal pay equity with other senior executives, marking Huang’s first salary adjustment in a decade.
Understanding the rationale behind the pay increase
The compensation committee’s statement to the SEC clarified the reasoning behind Huang’s salary adjustments. They indicated that the increases were appropriate in light of internal pay equity among other Named Executive Officers (NEOs) within the company. Huang’s target variable cash opportunity remains at 200% of his base salary, increasing to $3 million, which aligns with the median of his peers. Moreover, his target equity opportunity increased by 25%, reaching $27.5 million, slightly above the median of his contemporaries.
Nvidia’s remarkable market growth
The staggering increase in Nvidia’s market capitalization—growing by 281 times since 2015 and more than 9 times since the end of 2022—highlights the immense investor confidence in Huang’s leadership and the company’s dominance in the AI sector. Huang’s ownership stake of 3.5% in Nvidia is now valued at approximately $94 billion, illustrating the significant financial impact of his role within the company.
Broader trends in tech executive compensation
Huang’s salary adjustments are part of a larger trend among tech executives regarding non-cash compensation, particularly for security and logistical support. For instance, Alphabet reported spending $8.27 million on personal security and travel for its CEO, Sundar Pichai, marking a 22% increase from the previous year. This trend underscores the growing need for enhanced security and support for executives within the tech industry, reflecting their increased visibility and the associated risks.
Stay updated with tech news
For those interested in the latest developments in the tech world, including insights and analyses, following platforms like Tom’s Hardware can provide valuable information. Stay informed on news, reviews, and trends that shape the technology landscape, ensuring you remain ahead of the curve in understanding the dynamics of this rapidly evolving sector.
As we continue to witness significant changes in executive compensation and corporate performance, it’s essential to pay attention to these developments. They not only reflect company successes but also broader economic trends that shape the future of the tech industry.