Even Executive Pay Is Being Disrupted at Tech Giants

Amazon.com Inc., Alphabet Inc. and Facebook Inc. have upended the establishments in retailing, advertising and media — so it may not come as a surprise that their pay plans are unusual too. The three set themselves apart from other Standard & Poor’s 500 Index companies by paying bosses almost exclusively in stock grants that are free from any links to performance goals. The vast majority of the biggest U.S. companies tie most of their top executives’ pay to targets disclosed in regulatory filings, according to the Bloomberg Pay Index. Paying in stock rather than cash helps boards align management rewards with performance and tying those grants to specific financial or operational milestones can reinforce that approach. Yet for businesses in hot industries like tech, boards may prefer plans that don’t reveal company targets and that help retain highly sought-after executives by guaranteeing their potential payouts.

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