But it's also important to note that only $300K of that is in cash. The other $600K is in profit participation, which could take years (maybe even a decade!) to be realized. It could also be worth $6M a year when it's realized.
But ultimately it's an investment of your time. Or to think of it another way, you're getting paid $900K a year but you're also investing $600K a year in OpenAI, which may end up being an amazing return or nothing at all, just like any startup investment.
Although with Sam at the helm, my guess is it will probably be worth more than $600K a year.
Are they just extremely rare cases or am I just not aware of the valley and their customs?
Not aware. That's not unusual compensation for key contributors. Especially in AI or other niche fields. Even outside the valley.
We acquired something a while back in Montreal, Canada and it sure wasn't cheap. Salaries were in the same ballpark as our positions in the valley. We actually got most of the team to relocate to California on O-1s but still have some guys over there.