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, if at all, 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.
Here are the key takeaways from the survey:
A good year at the top
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.
Sarah Anderson, who directs the Global Economy Project at the progressive Institute for Policy Studies, said there have been some recent “long-overdue” increases in worker pay, especially for those at the bottom of the wage scale. But she said too many workers in the world’s richest countries still struggle to pay their bills.
The top earners
Rick Smith, the founder and CEO of Axon Enterprises, 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.
Almost all of Smith’s pay package consists of stock awards, which he can only receive if the company meets targets tied to its stock price and operations for the period from 2024 to 2030. Companies are required to assign a value to the stock awards when they are granted.
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 option awards.
The median stock award rose almost 15% last year compared to a 4% increase in base salaries, according to Equilar.
“For CEOs, target long-term incentives consistently increase more each year than salaries or bonuses,” said Melissa Burek, also a partner at Compensation Advisory Partners. “Given the significant role that long-term incentives play in executive pay, this trend makes sense.”
Jackie Cook at Morningstar Sustainalytics said the benefit of tying CEO pay to performance is “that share-based pay appears to provide a clear market signal that most shareholders care about.” But she notes that the greater use of share-based pay has led to a “phenomenal rise” in CEO compensation, tracking recent years’ market performance,” which has widened the pay gap within workplaces.”
Some well-known billionaire CEOs are low in the AP survey. Warren Buffett’s compensation was valued at $405,000, about five times what a worker at Berkshire Hathaway makes. According to Tesla’s proxy, Elon Musk received no compensation for 2024, but in 2018, he was awarded a multiyear package that has been valued at $56 billion and is the subject of a court battle.
Other notable CEOs didn’t meet the criteria for inclusion in the survey. Starbucks’ Brian Niccol received a pay package valued at $95.8 million, but he only took over as CEO on Sept. 9. Nvidia’s Jensen Huang saw his compensation grow to $49.9 million, but the company filed its proxy after April 30.
The pay gap
At half the companies in AP’s annual pay survey, it would take the worker at the middle of the company’s pay scale 192 years to make what the CEO did in one. Companies have been required to disclose this so-called pay ratio since 2018.
The pay ratio tends to be highest at companies in industries where wages are typically low. For instance, at cruise line company Carnival Corp., its CEO earned nearly 1,300 times the median pay of $16,900 for its workers. McDonald’s CEO makes about 1,000 times what a worker making the company’s median pay does. Both companies have operations that span numerous countries.
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 and other insurance are included.
“With CEO pay continuing to climb, we still have an enormous problem with excessive pay gaps,” Anderson said. “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.”
Some gains for female CEOs
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’ compensation was in the form of stock awards.
Other top earners among female CEOs were Jane Fraser of Citigroup ($31.1 million), Lisa Su of Advanced Micro Devices ($31 million), Mary Barra at General Motors ($29.5 million), and Laura Alber at Williams-Sonoma ($27.7 million).
Christy Glass, a professor of sociology at Utah State University who studies equity, inclusion, and leadership, said while there may be a few more women on the top paid CEO list, overall equity trends are stagnating, particularly as companies cut back on DEI programs.
“There are maybe a couple more names on the list, but we’re really not moving the needle significantly,” she said.
Prioritizing security
Equilar found that a larger number of companies are offering security perquisites as part of executive compensation packages, possibly in reaction to the December shooting of UnitedHealthCare CEO Brian Thompson.
Equilar said an analysis of 208 companies in the S&P 500 that filed proxy statements by April 2 showed that the median spending on security rose to $94,276 last year from $69,180 in 2023.
Among the companies that increased their security perks were Centene, which provides health care services to Medicare and Medicaid, and the chipmaker Intel.
The U.S. Justice Department has formally moved to dismiss a criminal fraud charge against Boeing and has asked a judge to cancel an upcoming trial connected to two plane crashes that killed 346 people off the coast of Indonesia and in Ethiopia, according to court documents filed Thursday.
The deal, announced last week, will allow the American aircraft manufacturer to avoid criminal prosecution for allegedly misleading U.S. regulators about the 737 Max jetliner before the planes crashed less than five months apart in 2018 and 2019.
The “agreement in principle” will require the company to pay and invest more than $1.1 billion, including an additional $445 million for the crash victims’ families, in return for dismissing the criminal case, according to court documents. Dismissing the fraud charge will allow the manufacturer to avoid a possible criminal conviction that could have jeopardized the company’s status as a federal contractor, experts have said.
U.S. District Judge Reed O’Connor in Fort Worth, Texas, will decide whether to accept the motion to dismiss, accept the terms of the non-prosecution agreement, and cancel the trial. O’Connor on Thursday ordered all the lawyers to present him with a briefing schedule on the government’s motion by June 4.
Some relatives of the passengers who died in the crashes have been pushing for a public trial, the prosecution of former company officials, and more severe financial punishment for Boeing. The Justice Department has noted that the victims’ families had mixed views on the proposed deal.
Nadia Milleron, a Massachusetts resident whose 24-year-old daughter, Samya Stumo, died in the Ethiopia crash, in an email Thursday said it hurt her to read the Justice Department’s “false” statement that the agreement will secure meaningful accountability, deliver public benefits and bring finality to a complex case whose outcome would otherwise be uncertain.
“This is not a difficult or complex case because Boeing signed a confession,” Milleron said. “There will be no accountability as a result of the NPA (non-prosecution deal).”
Boeing said in a statement that the company is committed to complying with its obligations under the resolution, including commitments to further institutional improvements and investments, as well as additional compensation for families of those who died in the two plane crashes.
“We are deeply sorry for their losses, and remain committed to honoring their loved ones’ memories by pressing forward with the broad and deep changes to our company that we have made to strengthen our safety system and culture,” a Boeing spokesperson said in the statement.
Attorney Mark Lindquist, who represents dozens of the victims’ families, said in a statement Thursday that although he had wanted to see a more vigorous prosecution, he didn’t think it was going to happen.
“At this point, I can only hope the criminal case and the lawsuits motivated Boeing to improve safety,” Lindquist said. “That’s what really matters. We all want to walk onto a Boeing plane and feel safe.”
Boeing was accused of misleading the Federal Aviation Administration about aspects of the Max before the agency certified the plane for flight. Boeing did not tell airlines and pilots about a new software system that could turn the plane’s nose down without input from pilots if a sensor detected that the plane might go into an aerodynamic stall.
The Max planes crashed after a faulty reading from the sensor pushed the nose down, and pilots were unable to regain control. After the second crash, Max jets were grounded until the company redesigned the software.
The Justice Department charged Boeing in 2021 with deceiving FAA regulators about the software and about how much training pilots would need to fly the plane safely. The department agreed not to prosecute Boeing at the time, however, if the company paid a $2.5 billion settlement, including the $243.6 million fine, and took steps to comply with anti-fraud laws for three years.
But last year, federal prosecutors said Boeing violated the terms of the 2021 agreement by failing to make promised changes to detect and prevent violations of federal anti-fraud laws. Boeing agreed last July to plead guilty to the felony fraud charge instead of enduring what could have been a lengthy public trial.
Then, in December, O’Connor rejected the plea deal. The judge said the diversity, inclusion, and equity, or DEI, policies in the government and at Boeing could result in race being a factor in picking a monitor to oversee Boeing’s compliance with the agreement.
Under the new agreement, Boeing must retain an “independent compliance consultant” who will make recommendations for “further improvement” and report back to the government, court documents said.
Salesforce's aggressive artificial intelligence push isn't just limited to its products. Speaking at a quarterly earnings call this week, Chief Operating and Financial Officer Robin Washington said the company has "reduced some of (its) hiring needs" as it outsources more work to AI. Engineering and customer service are seeing the most movement, and Washington says 500 customer service employees will be reassigned to other roles. Hiring hasn't slowed down in all departments, however: Salesforce plans to beef up its sales ranks by 22%.
The U.S. housing market has a record 490,000 more sellers than buyers, which means home prices will likely fall by year-end.
--Sellers outnumber buyers because 1) high housing costs and economic uncertainty are scaring buyers off 2) the mortgage rate lock-in effect is easing, bringing more sellers off the sidelines.
--History has shown that a change in the balance of buyers and sellers is a signal of what's to come with home prices. After mortgage rates shot up in 2018, sellers outnumbered buyers by the largest % in 3 years. What followed? The slowest home-price growth in 6 years. The buyer-seller gap is even larger today, which is why we expect prices to actually fall.
--Nowhere is seeing this take hold more strongly than Florida, which is home to 6 of the top 10 buyer's markets (AKA places where sellers outnumber buyers most)
--The takeaway for sellers: Selling sooner rather than later might be the move.
--The takeaway for buyers: Your purchasing power may improve slightly.
😱 In an economy full of noise, what is the data saying? 📊
🔹GDP Trends 📉
The latest Q1 GDP revision showed slower consumer spending, while imports surged ahead of anticipated tariff changes. Growth edged lower, reflecting economic uncertainty.
🔹Jobless Claims 📈
New data revealed higher-than-expected jobless claims, signaling potential labor market softening. However, wage growth remains steady, providing mixed signals on employment stability.
🔹Trump’s Tariff Losses & SCOTUS Appeal
Two separate courts ruled that Trump exceeded his authority in imposing broad tariffs under the International Emergency Economic Powers Act (IEEPA). The administration has filed appeals, with expectations that the cases may reach the Supreme Court.
Stock Market Response
✅ Nasdaq futures jumped nearly 2%, while S&P 500 futures rose 1.7%, reflecting optimism over reduced trade uncertainty. The market has lost steam, a sign that it, too, is looking through the tariff talks for now.
✅ The U.S. dollar strengthened, signaling investor confidence in a more stable trade environment. Pushing for its fifth positive week out of the last six. Still a long way to go.
Powell-Trump Meeting & Interest Rate Policy
Federal Reserve Chair Jerome Powell met with President Trump at the White House to discuss economic growth, employment, and inflation.
🔹Key Takeaways from the Meeting
✅ Powell did not commit to any rate changes but emphasized that policy decisions will depend entirely on incoming economic data.
✅ Trump has criticized Powell for not lowering rates, calling him “Too Late Powell” and arguing that inflation is low enough to justify cuts.
✅ The meeting marks the first direct discussion between Trump and Powell in his second term, signaling ongoing tensions over monetary policy.
Control:
With interest rates remaining persistent, investors should consider tax-efficient strategies to diversify portfolios and manage volatility:
Marcus Sturdivant spoke with Lucy Lazarony and Investopedia, sharing some insights on whether a Roth Conversion makes sense to start later. One size does not fit all!
✅ Roth Conversions
Strategic - Roth IRA conversions can help retirees reduce taxable income before Required Minimum Distributions (RMDs) begin at age 73. This approach prevents retirees from being pushed into higher tax brackets due to forced withdrawals.
✅ Increasing Cash & Cash Equivalents
Allocating more to short-term instruments can provide stability while maintaining liquidity, especially in an environment where interest rates remain elevated.
✅ Dollar-Cost Averaging & Portfolio Rebalancing
Rather than exiting the market entirely, investors should consider gradually increasing equity exposure through dollar-cost averaging.
Well, this week, that invite came, and the two men met to discuss the economy and the Fed's approach to monetary policy.
The meeting came at a time when Trump's calls for a rate cut were being increasingly echoed by other members of his administration.
President Donald Trump's trade war has cost companies more than $34 billion in lost sales and higher costs, according to a Reuters analysis of corporate disclosures, a toll that is expected to rise as ongoing uncertainty over tariffs paralyzes decision-making at some of the world's largest companies.
TARIFF TALK
⚠️ Tariff Uncertainty Clouds 2025 Outlook
The recent federal appeals court ruling temporarily upholds President Trump’s sweeping tariffs, delaying resolution and prolonging economic uncertainty.
With a 40% recession probability in H2 2025 and effective tariff rates at 14%—7x higher than 2024—businesses and investors face heightened risks.
CapEx delays and supply chain frictions could further strain the U.S. economy.
There is just too much uncertainty out there!
Read the full analysis for key insights and strategic implications.