Tom Perkins may be able to buy a six-pack of Rolexes with the millions he made as a pioneering venture capitalist, but if he were an executive in the technology industry today, he could easily afford a boatload of luxury watches.
In the aftermath of Occupy Wall Street, Silicon Valley has become a poster child in the debate over income inequality. New research shows just how wide the gap has become.
Twenty-two tech executives each made more than $20 million in total compensation, according to 2013 proxy data compiled by Equilar, a compensation research firm. The numbers include salary, bonus, stock and other payouts. In 2007, there were only four — three at database-software maker Oracle and Mark Hurd, then chief executive officer at Hewlett-Packard. (He now works at Oracle.)
The rest of the industry has caught up to the enterprise-software giant. Four of the six top-paid tech execs work at Apple, according to the 2013 data reviewed by Equilar. Tesla Motors CEO Elon Musk received $78.2 million from the automaker, and that doesn't include his holdings in his other companies, SolarCity and Space Exploration Technologies.
As Americans snap up more iPhones and Android gadgets, U.S. tech industry profits are at an all-time high, according to data compiled by Bloomberg. Many Wall Street bankers, who were the target of scorn by protesters across the U.S. during the recession, would be jealous of the pay packages handed out in Silicon Valley these days.
"The financial companies have curtailed their pay," Aaron Boyd, director of governance research at Redwood City, California-based Equilar, said in an interview. "More tech companies will pay above $20 million a year than any other industry."
And it's not just those at the top levels of the organizational chart. Among all tech professionals, 35 percent made more than $100,000 last year, compared with 21 percent in 2007, according to research from the job-search website Dice.
"A lot has happened in the last five years, especially with Apple and Google," said Mark Gordon, a compensation expert at consulting firm Exequity. "These companies are in a position to set the bar for comp because they have so much resource capital."
For senior executives, the majority of compensation is typically given in stock, which vests over time. This structure serves as an incentive for leaders to perform well and enrich shareholders, said Tim Sparks, president of San Jose, California-based consultancy Compensia.
"Only if the stock appreciates do people get value," Sparks said. "Some of these companies are doing multiyear grants to lock these people down. It's not just like Wall Street where you're getting $20 million bonuses."
But thanks to such mass quantities of stock that are being handed out, executives can make a fortune even when their companies underperform. Google's 2013 proxy revealed that it had three executives who received more than $30 million each in total compensation in 2012 — Chief Business Officer Nikesh Arora, Chief Financial Officer Patrick Pichette and Chief Legal Officer David Drummond. Google's 9.5 percent stock increase in 2012 underperformed the Standard & Poor's 500 Index's 13.4 percent rise.
Spokespeople for the companies either declined to comment or didn't respond to requests for comment.
As companies hand out golden handshakes and parachutes to high-profile hires, some execs are still rewarded handsomely when they fail. Henrique de Castro will end up taking an estimated $109 million, including severance benefits and equity awards, for his 14 months of service as chief operating officer at Yahoo! before CEO Marissa Mayer ousted him. According to the 2013 proxies, De Castro made more than his boss, who was given $36.6 million.
Because companies don't dole out new options or equity grants every year, the list won't necessarily have the same cast of characters in 2014, Equilar's Boyd said. But one thing is for sure: "This isn't an anomaly," he said.