Average Adobe staffer makes $170k a year, and 185 of them = 1 CEO
Margins in software are enough to let you heat house, eat and buy a car
Adobe CEO and chairman Shantanu Narayen received a total compensation pack of more than $31 million in 2022, the company has confirmed ahead of an Annual Meeting of Shareholders scheduled for next month.
To be precise, the long-running exec who arrived at Adobe in 1998 as veep of its engineering organization, was made CEO in 2007, and then additionally handed the chairman seat a decade later, received $31.6 million.
This was comprised of a base salary of a little more than $1.4 million, stock awards of $27.2 million, annual incentives of $2.68 million and all other compensation of more than $340,000.
The pay award follows fiscal 2022 in which Adobe reported a 12 percent spike in revenue to $17.16 billion, including a 11 percent rise in turnover Digital Media division and a 14 percent jump in Digital Experience. Operating profit was $6.1 billion versus $5.9 billion in the prior period.
Software businesses operate at far higher margins than those building hardware, so it is perhaps unsurprising that Narayen made almost twice the amount in compensation than IBM’s leader Arvind Krishna received - despite IBM professing to be a software and services company.
Still, compared to prior years, Narayen’s pay pot shrank considerably, not because his performance waned, just that a higher number of stock awards vested. In 2021 the big boss got $36.12 million, while he pocketed $45.8 million in 2020.
The median compensated employee was $170,679 at Adobe in the last financial year, compared to $190,302 at Microsoft and $295,884 at Google, although activist investor TCI Fund wants Google to rethink its pay plan.
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Adobe said its calculation of CEO versus the average worker's pay equates to a “ratio of 185 to 1.”
Just last week, Adobe reported results for Q1 of its fiscal 2023 that show a 9 percent year-on-year increase in revenue to $4.66 billion and operating profit of $1.58 billion. It upped revenue estimates for the year on the back of these numbers, at a time when many tech vendors are scaling back.
Narayen said he expects Adobe to complete the purchase of Figma this year, despite competition regulators on both sides of the pond closely inspecting the implications, and the Department of Justice expected to block it. ®