Nvidia boss gets 45% pay bump, but is the billionaire happy? The gods of executive pay smiled on Nvidia's chief executive in the last full financial year, awarding him a 45 percent bump in total compensation. Jenson Huang, the co-founder, president and CEO of the GPU kingpin, was given a pat on the back - in the financial sense - to the tune of $49,866,251 in Nvidia's fiscal 2025 ending …
Stock awards are taxed the same, other than maybe you don't pay FICA on that (which is only 1.45% so not a big deal) as I'm not sure if FICA is only charged for salary or all compensation.
The tax avoidance only comes when you get stock options, because you're taxed on the value of the options at the time they were granted which may be rather modest if the stock's value was a lot lower when they were awarded. But the article here indicates he's been awarded stock and he's going to pay the ~37% federal and whatever for California on that whole wad of stock.
For a normal person being compensated mainly in stock might be bad - i.e. if they gave you the stock last year and the value of it plunged you still pay taxes on the value at the time you received it. If it plunged enough, you didn't sell, and you didn't have any other liquid assets you might be in a situation where you don't have any way to tax your tax bill the following April (not sure if compensation via stock awards requires paying quarterly estimated taxes or not, but if the award is granted in Q4 then it becomes immaterial)
It says "stock awards" in the article for simplistic terms. But I've gone the trouble of checking the SEC filing it references:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001045810/000104581025000086/nvda-20250501.htm# (page 56 to save you reading it all).
They're actually Restricted Stock Units. Which are tax-free at the point of award, they only get taxed at the point of vestment. So the OP's point stands, it's accumulating wealth and assets without being taxed on it, and being able to use that as a tangible asset.
Trevor Noah summed it up nicely:
https://www.youtube.com/watch?v=r1_H7y9mOvw
Incidentally, incentive stock options aren't taxed at income tax rates, only at capital gain on the increase since you were awarded them. You might be subject to Alternative Minimum Tax depending on what their fair market value was at the time, but that's a very small tax by comparison.
Wasn't aware of the tax break for RSUs, I suppose like carried interest it is one of those things the 1% of the 1% use to dodge taxes and like carried interest is probably one of those things perennially on the chopping block when changes to tax laws are discussed by somehow right before the critical votes just enough congressmen who were for it mysteriously vote against pulling that loophole.
only at capital gain on the increase
That's how it should be, since that's how you're taxed if you bought a stock and I don't see why getting paid in stock should be treated differently than giving you a check and you using the proceeds to buy the stock (except for the RSU dodge...I imagine if I look into that and see if I can figure out whether I can use that to pay myself in one of my businesses that either it is only available in circumstances no small business can meet, or the amount of legal effort required to meet all the regulations means that unless you're paying yourself tens of millions it isn't worth paying a lawyer to set it up)
"That's how it should be, since that's how you're taxed if you bought a stock" - but if you bought a stock, you'd be buying it with income that had already been taxed, so yeah the "cap gain only" is a massive dodge. If Nvidia stock stays at the same price (it won't..), he'd effectively be getting his $50m absolutely tax free if/when he cashes them in (which he won't).
It's available to anyone who doesn't really need cash and is happier with equity. There's a reason his reward is so heavily biased towards stock - his cash salary ($1.5m) is effectively his petty cash to live. Everything else is equity in order to balance the debts he'll be raising for things like his house. He'll have a multi-million dollar house, but he'll have a massive interest-only mortgage on it effectively, writing that debt off against his other incomes. Look into it by all means, but will only really work if you don't need cash and have a business that has valued shares. Even then, it would need to be one that has significant volumes of shares, as those RSUs will have been created out of nothing, ultimately diluting the value of the existing shares, but not enough that anyone else would notice/care.
The irony is that these tax breaks are for people who don't need cash, they just don't want to pay tax. Holidays? Cars? Rich people don't need to buy them, they get given them as gifts and favours from other rich people. His holiday will be at a friend's island, on a private jet that's either Nvidia's (he'll work on this island partially, so it's a business trip) or another friend's.
Earn it? There's no incentive when big corporations are willing to throw money at you hand over fist to buy as many AI GPU's as they can to 'invest' in the AI bubble. That also means there's no incentive to reduce the cost of consumer GPU's which were artificially inflated during COVID and subsequent supply chain issues back down to realistic prices when they can just say to consumers, "Fuck You." and continue to gouge you needlessly.
I really do hope Intel take advantage of this massive consumer opportunity.
It's obscene. Many years ago the difference between a CEO and an average employee was a factor of 10 to 20 now the factor is in the thousands.
If a company is doing well then every employee should be rewarded - the people who do the actual work should be rewarded for their effort.
There should be punitive taxation for people who are this greedy.
Fortunately all those generational assembly line jobs of putting Nvidia GPU cards into boxes will be returning to the USA.
The specy-nerd jobs of designing GPUs will be outsourced to countries that haven't closed all their universities and don't promote people purely on the basis of their podcast/number of Germanic tattoos
"Fortunately all those generational assembly line jobs of putting Nvidia GPU cards into boxes will be returning to the USA."
Indeed so. According to my basic searching, the typical hourly rate in China for that type of work is 46 yuan, or $6.40 an hour. Hope all the Republican voters are going to form a queue to work at those rates.
He is the co-founder, CEO and president of Nvidia. A firm that last year took in $130 billion of sales revenue. Nvidia and the position it commands is very largely down to his direction and selection of the right people to employ. Being paid $50 million dollars for the year equates to less than 0.04% of sales revenue, so not unreasonable. If you think it's an unreasonable reward perhaps you are suffering from "invidia" which was the inspiration for the company name.
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