CEO compensation rises nearly 10% in 2024 survey

Analysis of S&P 500 leaders shows $17.1M median; workers at $85,419

Netflix CEO Ted Sarandos arrives at the premiere of “The Electric State” at The Egyptian Theatre in Los Angeles in February. Sarandos earned $61.9 million in his 2024 pay package. Jordan Strauss — Invision/AP

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By Mae Anderson and Paul Harloff

The Associated Press

The typical compensation package for chief executives who run companies in the S&P 500 jumped nearly 10% in 2024 as the stock market enjoyed another banner year and corporate profits rose sharply.

Many companies have heeded calls from shareholders to tie CEO compensation more closely to performance. As a result, a large proportion of pay packages consist of stock awards, which the CEO often can’t cash in for years unless the company meets certain targets, typically a higher stock price or market value or improved operating profits.

The Associated Press’ CEO compensation survey, which uses data analyzed for The AP by Equilar, included pay data for 344 executives at S&P 500 companies who have served at least two full consecutive fiscal years at their companies, which filed proxy statements between Jan. 1 and April 30.

The median pay package for CEOs rose to $17.1 million, up 9.7%. Meanwhile, the median employee at companies in the survey earned $85,419, reflecting a 1.7% increase year over year.

CEOs had to navigate sticky inflation and relatively high interest rates last year, as well as declining consumer confidence. But the economy also provided some tail winds: Consumers kept spending despite their misgivings about the economy; inflation did subside somewhat; the Fed lowered interest rates; and the job market stayed strong.

The stock market’s main benchmark, the S&P 500, rose more than 23% last year. Profits for companies in the index rose more than 9%.

“2024 was expected to be a strong year, so the (nearly) 10% increases are commensurate with the timing of the pay decisions,” said Dan Laddin, a partner at Compensation Advisory Partners.

Rick Smith, the founder and CEO of Axon Enterprises in Scottsdale, topped the survey with a pay package valued at $164.5 million. Axon, which makes Taser stun guns and body cameras, saw revenue grow more than 30% for three straight years and posted record annual net income of $377 million in 2024. Axon’s shares more than doubled last year after rising more than 50% in 2023.

Other top earners in the survey include Lawrence Culp, CEO of what is now GE Aerospace ($87.4 million), Tim Cook at Apple ($74.6 million), David Gitlin at Carrier Global ($65.6 million) and Ted Sarandos at Netflix ($61.9 million). The bulk of those pay packages consisted of stock or options awards.

Overall, wages and benefits netted by private-sector workers in the U.S. rose 3.6% through 2024, according to the Labor Department. The average worker in the U.S. makes $65,460 a year. That figure rises to $92,000 when benefits such as health care are included.

“With CEO pay continuing to climb, we still have an enormous problem with excessive pay gaps,” said Sarah Anderson, who directs the Global Economy Project at the progressive Institute for Policy Studies. “These huge disparities are not only unfair to lower-level workers who are making significant contributions to company value – they also undercut enterprise effectiveness by lowering employee morale and boosting turnover rates.”

For the 27 women who made the AP survey — the highest number dating back to 2014 — median pay rose 10.7% to $20 million. That compares to a 9.7% increase to $16.8 million for their male counterparts.

The highest earner among female CEOs was Judith Marks of Otis Worldwide, with a pay package valued at $42.1 million. The company, known for its elevators and escalators, has had operating profit above $2 billion for four straight years. About $35 million of Marks’ compensations was in the form of stock awards.