The drop followed a rally that accelerated after a 10-for-1 stock split that took effect on June 10. Nvidia’s breathtaking rise and its position as the dominant provider of chips to support artificial intelligence applications have made it emblematic of this year’s tech-driven boom in U.S. stocks.

Nvidia’s stock surge

“The bounce today is a normal technical bounce after a 15% drop in three days; you’re not going to go straight down every single day,” said Tom Hayes, chairman at Great Hill Capital in New York. “It’s a great company, it’s a great CEO, and you have insiders selling three-quarters of a billion worth of stock just as retail investors were getting involved with the split,” Hayes added.

Stock of Nvidia, which last week briefly became the world’s most valuable company, has seen a surge of 154% this year. Nvidia has accounted for nearly 30% of the S&P 500’s year-to-date return as of Monday’s close, according to S&P Dow Jones Indices. The index is up 14.6% this year.

Nvidia’s valuation

The recent selloff of stock has helped ease some worries about Nvidia’s valuation, which now stands at about $3.1 trillion from a high of about $3.3 trillion earlier this month.

“It’s a normal correction for a company that has made a run and gotten a lot of publicity,” said Tom Plumb, chief executive and portfolio manager at Plumb Funds, which has Nvidia as one of its largest holdings. “Until there’s a confirmation that the actual business would justify the slowing of the momentum, I don’t think you’ve reached the all-time peak.”

Options market bullish on Nvidia

Bullishness on Nvidia was evident in the options market, though the stock’s recent share price slide appears to have made traders more cautious.

Nvidia call options, typically used to bet on a rising stock price, outnumbered puts by 1.4-to-1 over the last three sessions, Trade Alert data showed. That compared to a call-to-put ratio of 1.6-to-1 for the prior 10 sessions.

At the same time, Nvidia short sellers, who bet on declines in the stock, have gained $4.97 billion in the past three sessions combined, according to data analytics firm Ortex Technologies.

Meanwhile, retail investors have likely been buyers of the stock on the recent dip, said Mario Iachini, senior vice president of Vanda Research, which tracks the behavior of individual investors.

Nvidia’s shareholder meeting

On Wednesday, at the shareholder meeting Nvidia’s CEO, Jensen Huang said that the company’s advantage in AI chips was due to a bet it made more than 10 years ago. Huang’s comments came following a more than 200% surge in the stock over the past year. Wall Street has been enamored by the company’s dominant position in the AI chip market.

Nvidia recently split its stock 10-for-1, passed a $3 trillion valuation and briefly reached the status of most valuable public company.

The stockholders also voted to re-elect 12 existing directors to the company’s board and ratified PwC as the company’s independent registered public accounting firm for fiscal 2025.

Nvidia’s CEO pay package

Nvidia shareholders were pleased with the company’s performance and approved a nonbinding vote on executive compensation called “say on pay.” Nvidia executives are paid in a combination of salary and various kinds of restricted stock units.

Huang the CEO’s pay package was worth about $34 million during the company’s 2024 fiscal year, a 60% increase since 2023, according to the company’s annual filing.

What makes Nvidia stock so attractive?

Nvidia’s stock story is its resilience and the investor sentiment surrounding its volatility. Despite a significant drop from its highs, Nvidia’s bounce back indicates ongoing confidence in its long-term prospects, particularly in AI and tech innovation. The company’s ability to recover after such fluctuations highlights its strategic importance and the broader market’s perception of its leadership in AI chip technology.

The post Nvidia’s Recovery from $430B Valuation Drop with 7% Stock Surge appeared first on Industry Leaders Magazine.

The Wall Street Journal reported that executive pay in the US reached record highs as the pandemic waned. In 2021, CEOs made 254 times more than the average worker, up from nearly 7% in comparison to the year before. Median executive compensation reached $20 million, as a result of stock options and bonuses, in 2021. Nine CEOs had pay packages worth $50 million or more. For the top 25% of CEOs, nearly 78% of their compensation was linked to equity.

Meanwhile, executive pay packages decreased by a meager 1.6% between 2019 and 2020, due to pay cuts brought on by the pandemic.

The widening pay gap is a testament to the fact that benefits of corporate profits are enjoyed by those at the top. Benefits rarely, if ever, trickle down to those at the bottom. In such cases, pay transparency helps close pay gaps and reduce bias.

Pay transparency is extremely beneficial for companies as it motivates employees to work harder and they often see more candidates from within the company competing for the top spots. It is also a great solution to bridge the gender wage gap. Encouraging salary discussions and keeping it transparent forces people to question their inherent beliefs and indirectly holds them accountable.

A survey conducted by a software firm in 2021 found that over 51% of employees surveyed admitted that they will switch companies for better pay transparency.

Intel Shareholders and Executive Pay

In a regulatory filing, it was revealed that Intel shareholders rejected the recent Intel executive compensation packages. The filing shows that “stockholders did not approve, on an advisory basis, Intel’s executive compensation of its listed officers.”

The California-based tech company’s package for top executives included a nearly $178.6 million payout for Chief Executive Officer Pat Gelsinger. Around 1.78 billion votes were cast against the Intel executive compensation plan, although the votes are non-binding. Nearly 921.2 million votes were cast in favor of the executive compensation.

In a statement, the chipmaker mentioned that it takes investor feedback very seriously. The company revealed, “we have already taken specific steps to address investor questions regarding compensation, including making our overall compensation approach easier to understand, clarifying our annual performance bonus goals, clearly linking pay to performance, and increasing our disclosures and transparency.”

As per a regulatory filing, the CEO pay package at Intel was roughly 1,700 times more than that of the average employee. The vote shows that investors are carefully following Gelsinger’s promise to turn Intel around.

Gelsinger took charge as Intel’s CEO in February 2021. He was granted an executive pay package of nearly $178 million later that year. The Intel executive pay package includes a salary, bonuses, stock awards, and option awards.  In the debate over Intel executive pay, the technology company stated that it believed “having 73% of the CEO’s new-hire equity awards contingent on achieving ambitious stock price growth was in the best interest of Intel and its stockholders.”

People’s rejection of the Intel compensation package shows rising awareness about corporate profits. In early May, shareholders vetoed the proposed $230 million pay package for General Motors CEO Larry Culp. As per the results, nearly 57.7 % of shareholders rejected the executive pay packages. This result is in line with last year’s trend, where a record number of shareholders rejected CEO pay packages, which they felt were unfair amidst layoffs and low revenues.

The post Shareholders Reject Intel’s Executive Pay Package appeared first on Industry Leaders Magazine.