Palantir’s Alex Karp was compensated $6.8 billion in 2024, the company reported Friday, a remarkable figure that would seem to rank among the largest annual pay packages ever recorded for America’s well-remunerated CEO class.
The number was produced as part of the proxy statement the defense, security, and AI software company published on Friday.
This comes from the table in the proxy statement labeled “Compensation Actually Paid to CEO,” which is a relatively new measure of compensation the SEC began to require a couple years back. It takes into account the stock and options grants that companies use to pay executives. Palantir reports a separate “summary compensation” table that puts Karp’s pay at just $4.6 million.
The “compensation actually paid” line was added as a means of trying to better capture the total pay that executives receive, accounting for fluctuating values of stock options and other equity awards. Here’s how The New York Times’ Jeff Sommer described it last year:
“The new approach is supposed to help shareholders determine whether an executive’s compensation is aligned with their company’s stock market return. It emphasizes the annual changes in value of an executive’s current and potential stock holdings, in contrast with the traditional approach, which provides a snapshot of the estimated value of a pay package when it is granted.”
Now, given the year that Palantir’s shares had last year — it rose 340% and was the top stock in the S&P 500 — it’s perhaps not surprising that Karp would enjoy a massive payout.
OK, fine. But there’s massive, and there’s massive.
By some rankings, Karp’s “compensation actually paid” number from 2023, $1.1 billion, made him the second-highest-compensated chief executive in the US, after Tesla’s Elon Musk, who made $1.4 billion in 2023 by this measure. (Tesla hasn’t published its proxy statement for 2024.)
Once the total tally of riches reaped by CEOs last year is finalized, we wouldn’t be surprised to see Karp sitting on top.
Now for the record, some companies claim this measure overstates what top executives earn. Palantir would seem to be one of them. In a footnote below the the “compensation actually paid table,” proxy statement included this somewhat Orwellian qualification.
The term “compensation actually paid” or “CAP” does not reflect the amount of compensation actually paid, earned or received by him during the applicable year. Per relevant rules, Mr. Karp’s CAP was calculated by adjusting the Summary Compensation Table Total values for CEO for the applicable year.
That’s true as far as it goes. But the “summary compensation table” number for Karp would also seem to be a pretty remarkable understatement of his earnings in 2024. As we know, he sold more than $2 billion worth of stock last year.
