Counting the CEOs with billions of dollars in income: Blackstone's boss ranks first with over $250 million

In the United States, the highest-paid CEOs are not necessarily from the largest companies in terms of market value or the companies with the highest stock price increases.

According to executive compensation data and analysis from C-Suite Comp, last year, six out of the top 10 highest-paid CEOs in the United States were from companies that are not included in the S&P 500 index. The S&P 500 index includes most of the largest publicly traded companies in the United States.

Last year, the CEO of private equity giant Blackstone Group, Stephen Schwarzman, had the highest total compensation of $253 million. Blackstone Group is larger in size than many S&P 500 index companies, with a market value exceeding $100 billion, but it has not been included in the index due to certain criteria not being met.

Alphabet-C's CEO, Sundar Pichai, had the second-highest compensation last year at $226 million. Following closely behind were Stephen Scherr, CEO of car rental giant Hertz, and Barry McCarthy, CEO of fitness equipment company Peloton. Michael Rapino, CEO of entertainment company Live Nation, ranked fifth with a income of $139 million.

C-Suite Comp data shows that the median compensation for CEOs of S&P 500 listed companies decreased from $14.7 million in the previous year to $14.5 million last year.

According to C-Suite Comp's analysis, in nearly 4,000 publicly traded companies in the United States, there were nine CEOs whose annual income exceeded $100 million in 2022. The analysis company stated that the number of CEOs earning over $100 million per year has significantly decreased compared to over 20 in 2021, mainly due to a reduction in equity rewards.

The majority of these CEO compensations typically consist of restricted stocks or options, the value of which fluctuates with market prices. Many equity rewards are usually allowed to be cashed out only when certain performance goals are met or when executives continue to be employed within specified time limits, thus becoming the executives' property.

For Stephen Schwarzman, co-founder and CEO of Blackstone Group, approximately $190 million of his compensation comes in the form of profit sharing and incentive fee allocations, while an additional $58.8 million primarily includes his ownership stake in real estate investment trusts managed by Blackstone Group.

Schwarzman's total compensation last year was more than 50% higher than his $160 million compensation in 2021. For him, compensation is not the sole or even the most important source of income, as he owns nearly 20% of Blackstone Group's shares, which are eligible to receive approximately $1 billion in dividends in 2022. Blackstone stated that nearly 30% of Schwarzman's 2022 compensation reflects the investment performance in 2021, during which the company's stock price doubled. Blackstone declined to disclose how much of Schwarzman's compensation is in cash.

At Hertz, Stephen Scherr's total compensation last year was $182 million, including $3.4 million in salary and bonus cash. An additional $178 million in restricted stock will fully vest by 2026, with most of it only being cashed out if the company's stock price reaches the 90-day average price target (which could be nearly twice the current stock price).

Hertz stated in its annual proxy statement that Scherr's performance metrics have been met, which means that if Scherr remains employed in 2026, in addition to the approximately $200 million in stock granted on December 31 of that year, he will also be awarded approximately $500 million in stock based on recent prices.

Scherr previously served as CFO of Goldman Sachs and assumed the CEO position at Hertz in February 2022, about seven months after the company emerged from bankruptcy protection.

During Scherr's tenure last year, Hertz's stock price declined by 22%, while the S&P 500 index fell by 16%. Securities filings show that as of the end of last year, the company's equity awards to Scherr amounted to approximately $128 million. As of June 30 of this year, Hertz's stock price has risen by approximately 20%.

Barry McCarthy became CEO of Peloton in February 2022, having previously served as CFO of Spotify and Netflix. Almost all of his $168 million compensation at Peloton consists of stock options. In the first half of this year, Peloton's stock price has fallen by about 3%, and in 2022, it has fallen by 79%.

In Pinterest's $123 million compensation granted to CEO Bill Ready last year, nearly $101 million came from stock options, with the remaining majority being $21.5 million in restricted stock. If Ready remains employed, the equity awards will be discounted quarterly over a four-year period. According to Pinterest's securities filings, the value of Ready's 2022 stock and option awards has increased to $153.6 million as of the end of the year.

Pinterest's stock price rose by 20% last year. So far this year, the company's stock price has increased by approximately 13%.

CS Disco is a 10-year-old company based in Austin, Texas. The company sells online services to law firms, lawyers, and legal service companies and is the smallest company among those with the highest CEO compensation. CEO and co-founder Kiwi Camara received a salary of $500,000 and $10.9 million in stock options last year, which was approved by shareholders' vote. Camara's desire to cash out is not easy. According to the regulations, he can only cash out his options when the company's 90-day average stock price reaches any of the six targets before 2032, or when the company is acquired, or in certain cases of unemployment. Camara's total income in 2021 was slightly less than $1 million. The company's stock price has risen by 30% this year, but it has dropped by over 75% since the beginning of 2022.