Snap CEO Is Crowned the King of Pay for 2017 With $505 Million

With a half-billion-dollar pay package for 2017, Evan Spiegel claims the crown of an elite group of corporate leaders.

Spiegel, 27, got the $504.5 million package when Snap Inc., the firm he co-founded in college, went public last year, making him the highest-paid executive of a publicly traded U.S. company, according to the Bloomberg Pay Index.

In the top 10, he’s trailed by people who resemble him, and one another, in several ways. All work in private equity or technology and received compensation exceeding $100 million. Seven founded their firms. Six are billionaires. And, at a time when wage inequality and workplace harassment are at the forefront of America’s public discourse, none are women.

While a buoyant stock market helped lift the values of executive pay packages, men reaped most of the gains. Only four women cracked the top 100 of the index.

KKR & Co.’s Scott Nuttall and Joseph Bae rank No. 2 and No. 3, with annual compensation of about $214 million apiece. The pair received the awards in the year they were promoted to co-presidents as the private equity giant began to prepare for a generational shift in the executive suite. Founders George Roberts and Henry Kravis, who are co-chief executive officers, also appear in the top 10, with compensation of about $121 million each.

KKR granted equity to each of the four, representing the first such awards its co-founders have received since the firm went public in 2010. Some of Nuttall and Bae’s awards vest only if the stock price exceeds $40 for 10 consecutive trading days before the end of 2022 and they stay with the firm until then. The shares closed Wednesday at $22.88.

“There aren’t a lot of people who can throw or hit 95-mph fastballs—just like there aren’t a lot of people who can run global multibillion-dollar companies,” said Jan Koors, a senior managing director at Pearl Meyer, a compensation consulting firm. “If you can do that, you can make a lot of money.”

The Bloomberg Pay Index tracks the 200 highest-paid executives who appear in filings from companies that trade on U.S. exchanges and submit compensation details to regulators. The index adds salaries, bonuses, perks, stock options, restricted shares and changes in pension values that a person was awarded for the most recent year. All equity awards are valued at each company’s fiscal year-end, not as of the grant date. The index’s figures can therefore differ from those disclosed in filings, sometimes by a lot, depending on stock-price changes and dividend payouts.

Recurring annual grants of shares or options are counted in the year they’re bestowed, not when they vest. Any one-time grant meant to compensate an executive for several years is allocated over the life of the award as explained in regulatory filings.

No. 4 Elon Musk, for example, received a grant of an option to purchase 5.27 million shares in 2012, meant to pay him for a decade only if the Tesla Inc. CEO managed to grow the company’s market value more than 10-fold and meet electric-vehicle production goals. The index annualizes the award over those years. Google CEO Sundar Pichai received a nine-figure biennial award in 2016 that vests over four years. The index allocated half of it for 2017, putting him at No. 5 on the ranking.

In contrast, First Data Corp.’s Frank Bisignano didn’t make the top 10. While his $102.2 million, as disclosed in filings, may place him high in rankings that solely consider reported pay, the Bloomberg index ranks him 126th because it annualizes the grant over multiple years, resulting in awarded compensation valued at $25.2 million at year-end.

Last year, International Business Machines Corp. CEO Ginni Rometty ranked sixth on the index with awarded compensation of $92.6 million for 2016. While several women make tens of millions of dollars a year in top jobs at some of the biggest U.S. companies—such as Apple Inc. Senior Vice President Angela Ahrendts and PepsiCo Inc. CEO Indra Nooyi—most don’t come close to the top. Oracle Corp.’s Safra Catz was the best-paid woman on the list for 2017, ranking No. 33 with $48.2 million.

The awards for Spiegel and Switch Inc. CEO Rob Roy, who placed sixth on the ranking with $143.6 million, were made in connection with their firms’ initial public offerings. Boards sometimes grant large awards to executives before companies list on public exchanges, hoping they will keep them in their jobs at least for the first few years.

Spiegel, who’s getting a $1 salary this year, negotiated his award as part of the company's public listing, the largest social media IPO since Facebook. The grant was equal to 3 percent of Snap’s outstanding shares at the time of the listing, or $636.6 million. The value, excluding about $1.18 million in salary and perks, dropped to $503.3 million as of Dec. 31, as shares of the firm tumbled 14 percent last year.