The compensation of Palantir CEO Alex Karp gained more than $6 billion last year.

It is the latest ultraexclusive achievement for chief executives of the biggest U.S. companies: the billion-dollar year.

Two bosses made it last year—holding stock-based pay that swelled in value by at least 10 figures in a single year. Alexander Karp clocked more than $6 billion in gains at government intelligence contractor Palantir Technologies. Hock Tan’s pay grew by $1.15 billion at chip maker Broadcom.

Only two other S&P 500 CEOs have hit that mark in recent years, according to data from public-company data provider MyLogIQ. Cryptocurrency exchange Coinbase Global’s Brian Armstrong in 2021, at $2.1 billion, and—naturally—Elon Musk. The Tesla CEO can boast billion-dollar gains in three years, including a record of $43 billion in 2020, though all are part of a pay package that a Delaware court declared invalid. On Sunday, Tesla granted Musk a new, “interim” stock award that it tentatively valued at $23.7 billion, with the promise of more this fall.

The outsize gains, while still rare, show how today’s CEO pay packages can swell far beyond their original valuations through a combination of soaring share prices and multipliers tied to company-performance targets. The billion-dollar gains are all the more notable because fewer big-company CEOs have been receiving pay packages initially valued at $100 million or more.

Brian Armstrong, CEO of Coinbase Global

These gains reflect only changes in the value of stock and option awards the executives received as part of their continuing compensation, and before vesting, when the CEOs can generally sell, hold or exercise as they see fit. Not included: The often sizable stakes that CEOs, especially founders, hold outright in their companies, which can also gain or lose value over time.

Palantir, Broadcom and Coinbase declined to comment. Tesla didn’t respond to requests for comment.

Until 2023, companies weren’t obliged to update investors on the value of past equity awards over time. Now, disclosures stretching back five years show the roller-coaster of valuations that can translate to billion-dollar gains.

Stock and option grants often vest over years or even a decade, sometimes only if the company meets a combination of financial, operational or stock-market targets along the way. The awards can balloon in value—or shrink to nothing—as share prices and profits fluctuate.

A single mega-grant

Karp has run Palantir for two decades. Named for magical “seeing stones” from J.R.R. Tolkien’s Lord of the Rings novels, the company makes just over half of its revenue from government business, such as analyzing intelligence and military data.

Karp’s multibillion-dollar boost last year came from a single mega-grant of options and restricted stock in 2020, a little of which vests each quarter over a decade. The award’s initial $1.1 billion valuation made it one of the biggest ever reported, and Karp hasn’t received significant new equity since.

The month after Palantir granted the stock and options to Karp, it listed its shares on the New York Stock Exchange, ensuring that the full equity award vests if Karp stays on the job. The award rapidly jumped in value, to $3.3 billion at the end of 2020, tracking Palantir shares.

It shrank by 75% over the next two years before recovering. By the end of 2024, the award was valued about $7.5 billion higher than at the beginning of the year, according to calculations by Terry Adamson, a partner at Infinite Equity, which designs and values equity pay packages.

Karp’s equity award has likely gained another $6 billion in value so far this year, given Palantir’s soaring share price, Adamson said. The company’s shares have doubled year to date and are up more than 16-fold from 2020.

The multiplier effect

Tan has received three infusions of Broadcom restricted stock since 2021. One made him the highest-paid CEO in The Wall Street Journal’s 2023 pay ranking, which uses initial values for equity awards without subsequent changes.

The chip maker valued those awards at about $2 billion by early November last year, its fiscal-year end, up from almost $269 million initially. Broadcom shares almost quadrupled in the same period, while the S&P 500 gained about 47%.

One award more than doubled in value, to $54 million, between the board’s mid-December 2020 decision to make it and an early April shareholder vote finalizing it. By late October 2021, Broadcom valued it at $61 million. That fiscal year, Broadcom’s shares rose 50%. Under the award’s terms, Tan would receive additional shares if Broadcom’s stock sufficiently outperformed the S&P 500 over three years. Strong performance led the company to value the award at its maximum potential that October.

Tan received no new equity in 2024, but the earlier awards added $1.1 billion in value, or 132%, during the fiscal year. Broadcom shares roughly doubled.

Hock Tan, CEO of Broadcom

Broadcom has said that, under Tan, the company has outperformed competitors. In securities filings, it said his 2023 pay reflected $32 million a year over five years and he won’t receive bonuses or additional equity through October 2027.

So far, Tan and Karp have vested in only some of their 10-figure gains—and the remainder could shrink if the companies’ share prices fall. Karp had vested in about $530 million of just over $7.5 billion in gains through the end of 2024, Adamson estimates. Further vesting this year likely added another $600 million.

Tan has vested in about $224 million of the growth in his equity awards, Broadcom’s securities filings indicate. If Broadcom’s share price stays above about half of its recent level into December, gains on Tan’s 2023 award are likely to vest. The company’s shares are up about 74% since November.