A footnote within the Palantir compensation disclosure made me chuckle, which was noteworthy as a result of these compensation disclosures normally make me frown.
Referring to Mr. Karp’s apparently gargantuan payday, it mentioned: “The time period ‘compensation truly paid’ or ‘CAP’ doesn’t replicate the quantity of compensation truly paid, earned or obtained by him in the course of the relevant 12 months.”
In actuality, Palantir mentioned, the numbers reported for Mr. Karp and a handful of different Palantir executives “are pushed primarily by modifications in our inventory worth,” which rose greater than one hundred pc in 2023, producing large positive factors for shareholders and so, “following S.E.C. disclosure guidelines, the fiscal 12 months 2023 CAP disclosed beneath has elevated.” However the earlier 12 months, 2022, was a depressing one for the entire inventory market. Palantir shares fell sharply, as did the worth of Mr. Karp’s compensation, utilizing the New Accounting strategy. For 2022, the corporate mentioned, he misplaced greater than $1.7 billion.
These staggering, fluctuating sums can be perplexing in isolation. Nonetheless, they serve a objective, I believe. Large modifications on this measure are an indication {that a} C.E.O. obtained huge compensation packages involving firm inventory prior to now. For instance, The Occasions reported that for 2020, Mr. Karp obtained $1.1 billion in Conventional Pay, probably the most for any chief govt that 12 months.
Equally, Broadcom reported that in 2023, Mr. Tan’s compensation with the New Accounting was $767,654,487, nearly 5 occasions his already wealthy compensation on the Conventional Pay record. That occurred as a result of the share worth rose and Mr. Tan, the chief govt of his firm since 2006, had amassed an excessive amount of inventory, choices and the like.
