Nvidia CEO Jensen Huang has had his pay sliced by 10%. The cut was triggered due to missed financial targets and came to light following the publication of the firm's FY23 results. First spotted by The Register and detailed in Nvidia's latest annual review (PDF), Huang's compensation package was cut by nearly $2.5M. However, he remains well shielded from the cost of living crisis affecting ordinary folk and isn't likely to have to make any personal cutbacks, as he will still receive $21.356M. Given that Huang's personal net worth weighs in at $26.1 billion, he probably isn't losing much sleep over the penalty.
Like many industry leaders, Huang gets paid via a mix of base salary, stock awards, and other benefits. Reasons for the missed financial targets of FY23 are pinned to the usual contemporary suspects. "A challenging year, with macroeconomic headwinds, channel inventory corrections, COVID-19 and product architecture transitions," all weighed on Nvidia. These pressures meant company income "fell short of the CC's (compensation committee's) pre-established goals for executive compensation," explains the financial review document linked above.
If you think leaders should lead from the front, it is reassuring the see Huang take this 10% pay cut due to targets not being met. It is notable that other top execs have still improved their compensation compared to last year - only Huang seems to have had his compensation actually roll back. Then again, Mr. Huang gets paid double the next best-paid executive, and as noted by The Register, his pay is 94 times that of the median green team drone.
Some people would be seriously perturbed by a $2.5M pay cut, but the Nvidia CEO has plenty of reasons to be cheerful and positive for the future. For example, Nvidia's financial targets might have been fluffed, but we are seeing a broad swell in demand for GPUs to power AI. While cryptominers might have gone quiet, the demand for GPUs to power the multitude of big AI programs and initiatives is surging. Thus, the fat crypto-profits that GPU makers had grown accustomed to in the early 2020s may well return as AI profits in the mid-2020s.
If we look at the Nvidia share price today and a year ago, we see another financial trend to soothe the Nvidia boss, who was once a waiter at Denny's Diner. A year ago, Nvidia Corporation stock was priced at $166, but today it is $288, an uplift of over 73% according to Google Finance. The Nvidia CEO is the biggest personal shareholder, holding 3.51% of company stock (over 86M shares).
Taking all the above into account, it isn't surprising that even as his pay is cut, the Nvidia CEO's real-time net worth continues to climb. According to his Forbes profile, Huang's net worth is $26.1B today, up just over 1%, making him the 76th wealthiest billionaire in the world.
