A footnote in the Palantir compensation disclosure made me laugh, which was notable since these compensation disclosures usually make me frown.
Referring to Mr. Karp’s apparently gigantic payday, it said: “The term ‘actual compensation paid’ or ‘CAP’ does not reflect the amount of compensation actually paid, earned or received by him during the relevant year.”
In reality, Palantir said, the numbers reported for Mr. Karp and a handful of other Palantir executives were “primarily due to changes in our stock price,” which rose more than 100 percent in 2023, resulting in big gains for shareholders and so “In accordance with SEC disclosure rules, the CAP disclosed below has increased for fiscal year 2023.” But the previous year, 2022, was a miserable year for the entire stock market. Palantir shares fell sharply, as did the value of Mr. Karp’s compensation based on the New Accounting approach. For 2022, the company said it lost more than $1.7 billion.
These staggering, fluctuating sums would be confusing on their own. Still, I think they serve a purpose. Big changes in this metric are a sign that a CEO has received huge compensation packages with company stock in the past. For example, the Times reported that Mr. Karp was paid $1.1 billion in traditional salary in 2020, the highest salary of any chief executive that year.
Similarly, Broadcom reported that in 2023, Mr. Tan’s compensation under the New Accounting was $767,654,487, almost five times his already high compensation under the traditional payroll. This happened because the share price was rising and Mr Tan, the managing director of his company since 2006, had accumulated a large amount of shares, options and the like.
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2024-06-07 19:46:45
www.nytimes.com
