What you need to know
- Nvidia is a tech company best known for manufacturing graphic processors.
- The company didn't hit its latest financial targets.
- As a result, Nvidia's president and CEO bonus compensation was millions of dollars lower than it could have been.
- He earns 94 times what his median workers are paid.
It's been a rough last few years in the tech industry, especially among semiconductor and computer processor manufacturers. While there is still a lot of demand for computer components the number of consumers seeking them has significantly lowered. Both Intel and AMD reported quarterly losses earlier this year and pointed to lower consumer sales as the reason. So it's not surprising that Nvidia has also been affected, even if it isn't as bad as some other companies have reported for the same period.
According to The Register Nvidia president, CEO, co-founder, and named executive officer (NECO) Jen-Hsun "Jensen" Huang has still managed to earn a handsome total compensation package of $21.35 million (as shown in the 2023 Nvidia Proxy Statement), but this is reportedly millions of dollars lower than what he could have earned had the tech company been able to meet its financial targets. For those interested, the median Nvidia employee pay rate is $229,078 which means that the CEO's salary is significantly higher at a ratio of 94:1. That's quite a difference.
Jensen wasn't the only one at Nvidia who wasn't paid out as much as they could have been. CFO Collette Kress could have received $11.99 million, but was only awarded $10.91 million. Meanwhile veep of Worldwide Operations Away Puri also could have received $11.99 million, but was only rewarded $10.62 million.
Altogether, Nvidia is down 10% from the year before, which the company states is due to several factors.
"Fiscal 2023 was a challenging year, with macroeconomic headwinds, channel inventory corrections, COVID-19 and product architecture transitions affecting several of our businesses. As a result, our Fiscal 2023 revenue and non-GAAP Operating Income performance fell short of the CC's (compensation committee's) pre-established goals for executive compensation."
It's likely that tech sales in this sector will continue to be down from the previous year going forward in 2023 as this is what both Intel and AMD have predicted for their next financial reports. However, Nvidia has been developing in various ways to uniquely situate itself toward a more confident future. The company's leaders also hope that shareholders will approve executive compensation for 2023. "As we move into fiscal 2024, we expect new product architectures to ramp, alongside new opportunities from areas such as generative AI and language models, Nvidia cloud services and digitalization."
