Rick Smith, co-founder and CEO of Axon Enterprise, has emerged as the highest-paid chief executive in the S&P 500 for 2024, with a staggering compensation package worth $165 million. The company, known for its Taser stun guns and police body cameras, rewarded Smith primarily through a performance-linked stock award, marking a significant divergence from traditional CEO compensation plans. His pay exceeded that of many leaders in tech giants and multinational conglomerates including Apple, JPMorgan Chase, Meta, and Blackstone.

Record-Breaking Compensation for a Law Enforcement Tech CEO

While one might expect this level of pay at firms like Apple or Amazon, Smith’s massive payout stands out precisely because Axon is significantly smaller in size and scale. Yet, Axon’s booming market performance and aggressive stock growth made the deal lucrative.

Smith was the only CEO in the S&P 500 to cross the $100 million mark in 2024. His $165 million compensation was almost entirely derived from a stock award granted in May 2024, tied to Axon’s long-term operational and financial milestones. Notably, this incentive structure isn’t exclusive to Smith — Axon offers the same package to all employees, giving them an opportunity to triple their earnings if performance goals are achieved.

“I feel better about making a lot if I can also make zero,” Smith said, referring to the plan’s high-risk, high-reward nature.

CEO Pay Sees Widespread Rise Across S&P 500

The broader context shows that CEO compensation is rising across the board. In 2024, the median CEO pay in the S&P 500 rose to $17.1 million, up from $15.8 million in 2023, indicating a growing divergence between top executive earnings and median employee salaries.

Other prominent CEOs earned the following:

• Jamie Dimon (JPMorgan Chase): $37.7 million

• Stephen Schwarzman (Blackstone): $119.8 million

• Tim Cook (Apple): $63.2 million

• Mark Zuckerberg (Meta): $27 million

• Elon Musk (Tesla): $0 due to legal wrangling over his previous award

Despite his high earnings, Smith’s compensation was entirely performance-driven, unlike some CEOs who receive a combination of salary, bonus, and equity.

Stock-Based Incentives Drive Smith’s Package

Smith’s stock award is structured to vest over seven years if Axon hits a set of ambitious targets. As of March 2024, two out of seven benchmarks had already been met. Since the package was issued, Axon’s stock price has jumped more than 160%, increasing the company’s market capitalisation beyond $50 billion.

This meteoric rise has dramatically increased the potential value of Smith’s shares, now approaching $500 million if all goals are hit. The design is similar to that of Elon Musk’s infamous Tesla package, which also tied CEO rewards to extraordinary company growth.

A Rare High Earner Beyond Big Tech

Smith’s success story is unusual in that he does not helm a Big Tech firm. Axon, while influential in the law enforcement and public safety tech space, is not a household name like Apple or Meta. Still, this is not Smith’s first experience with massive compensation. In 2019, when Axon was outside the S&P 500, he received $246 million under a similar plan.

Over the years, Smith and his brother Thomas Smith, co-founders of the company, have evolved Axon into a leading global provider of law enforcement tools, including digital evidence platforms, body cameras, and non-lethal weapons.

How Shareholders Reacted

Despite the package’s performance clause, Smith’s pay plan was narrowly approved by shareholders. The vote reflects growing scrutiny on executive compensation, especially in light of rising income inequality and sluggish wage growth for average workers.

However, Axon’s solid business performance and market confidence have made Smith’s case more defensible. If the company continues to grow at its current pace, investors may view the package as justified.

CEO Compensation Under the Spotlight

As executive pay continues to soar, there’s an intensifying debate among corporate governance experts on the fairness, sustainability, and implications of such packages. Smith’s deal may well become a blueprint or a cautionary tale in the coming years. If Axon delivers on all fronts, the structure may inspire other firms to adopt similar high-stakes incentives. If it falls short, it could invite even more shareholder activism and regulatory pressure.

Few CEOs Crossed Nine-Figure Mark in 2024

Interestingly, 2024 saw fewer CEOs cross the $100 million threshold than in any year since 2016. Aside from Rick Smith, the few to join the list included:

• Peter Gassner (Veeva Systems): $172 million

• Tobias Lütke (Shopify): $150 million

This suggests that high executive pay is now being more rigorously assessed, and companies may be more cautious about offering large upfront stock packages.

Axon’s Role in Law Enforcement and Safety Tech

Axon Enterprise’s tools are widely adopted by police departments across the US and abroad. Their products — including Tasers, body cameras, and the Evidence.com cloud platform — are vital in today’s digitised policing environment. As demand for law enforcement accountability and public safety tools rises, Axon continues to benefit.

Its stock growth is reflective of these industry trends, making Smith’s performance-based award structure a double-edged sword — high risk if the company falters, but high reward if momentum sustains.

Conclusion: The Future of CEO Compensation

Rick Smith’s 2024 payday is a symbol of evolving corporate compensation — favouring long-term performance over short-term guarantees. It sends a message to both investors and employees that leadership is willing to bet on future results rather than rely on base salary or cash bonuses.

Whether this becomes the standard for modern executive compensation, or remains an exceptional case, will depend on how Axon performs in the years ahead. For now, Smith is not only the highest-paid CEO of 2024 but also the face of a new era of corporate leadership compensation.

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