Shortly before DoorDash went public in December, the meal-delivery company awarded co-founder and CEO

Tony Xu

restricted shares that were initially valued at more than $400 million, according to securities filings.

Both awards far exceed the pay packages received by CEOs of S&P 500 companies in 2020. The median pay for S&P 500 CEOs in 2020 was $13.4 million, according to a Wall Street Journal analysis, and the biggest compensation package was valued at about $211 million.

Neither Palantir nor DoorDash is in the S&P 500 index. Both companies are unprofitable. In their filings, the companies describe the awards as tools to keep their CEOs on the job and motivated to increase the company’s value over a number of years.

“DoorDash is a relatively young company with an ambitious vision,” the company told the Journal. “The board has structured Tony’s compensation to maximize the incentive towards those long-term goals.”

Palantir declined to comment.

Mr. Xu’s equity award consists of 10.4 million restricted shares—roughly 3.5% of Class A shares outstanding as of the end of April. They will only vest, or become fully his, if the company’s share price rises sharply from current levels, between 25% and more than threefold. He can’t start earning them until June next year.

Mr. Karp doesn’t need Palantir’s share price to hit certain levels to receive his award. The company’s successful stock listing, which Palantir completed less than two months after he received the equity grant, unlocked the award. Starting in August, 2.5% of the options and restricted stock will vest each quarter that he is CEO, over 10 years.

Both men are already significant shareholders in their respective companies and have outsize control through supervoting shares that they own. Mr. Xu holds about 5% of DoorDash’s shares outstanding but 71% of its voting power. Mr. Karp holds about 5.1% of Palantir’s voting power and has voting agreements with his co-founders.

Mr. Xu, 36 years old, started DoorDash with Stanford University classmates in 2013. The company has enjoyed a boom in restaurant-delivery orders during the Covid-19 pandemic. It had $2.9 billion in revenue last year and reported a loss of $461 million.

Mr. Karp, 53 years old, helped found Palantir when it was started in 2003 with financial backing from

PayPal Holdings Inc.

co-founder

Peter Thiel.

Palantir develops data-mining software used by governments and corporations. It had $1.1 billion in revenue last year and reported a net loss of $1.2 billion.

DoorDash’s stock would need to surge for Mr. Xu to receive the full award, and the value of the grant will fluctuate with the company’s share price. For him to receive 100% of the award, the stock price would need to average at least $501 for six months before late November 2027. At that price, the full award would be worth about $5.2 billion.

“Our board of directors believed these stock-price goals, if achieved, would result in a return to our stockholders well in excess of market norms for comparable technology companies,” the company said in its proxy.

DoorDash shares closed at $149.83 on Wednesday.

Today—taking into account DoorDash’s stock price, volatility and the chances that its stock-price targets will be met—the full award could be worth about $1 billion, said Andy Restaino, the founder of Technical Compensation Advisors Inc., a Bellmore, N.Y., consulting firm.

Mr. Karp’s award of Palantir options and restricted stock is worth about $3.9 billion today using standard equity-valuation techniques, Mr. Restaino said. Another valuation firm’s estimate of Mr. Karp’s options was similar.

More companies are crafting such pay packages for their CEOs in the wake of a landmark stock-option grant made by

Tesla Inc.

to

Elon Musk

in 2018, according to executive-pay consultants. That award was valued at $2.28 billion at the time, but it has grown in value as Tesla’s share price has risen nearly 10-fold. Earlier this year Mr. Musk received full title to a tranche of options worth about $32 billion.

Ambitious, all-or-nothing equity packages are intended to keep and motivate leaders but pose several risks for companies, according to Terry Adamson, a managing director at Technical Compensation Advisors. “They’re so levered and so high-risk,” he said. “They either create massive awards or they create nothing.”

Write to Theo Francis at theo.francis@wsj.com