Alphabet, the parent company of Google, has announced a new three-year compensation package for its CEO, Sundar Pichai, potentially reaching up to $692 million. This arrangement could position Pichai as one of the highest-paid executives globally if certain performance metrics are achieved. The majority of the package consists of long-term stock incentives, including grants associated with Waymo, Alphabet’s self-driving car division, and Wing, its drone delivery segment.
According to a filing with the US Securities and Exchange Commission, Pichai’s annual salary will stay at $2 million without an annual bonus. Instead, the compensation structure includes triennial equity awards, comprising two sets of performance stock units valued at $63 million each, $84 million in restricted stock units, and separate “bet performance units” related to Waymo and Wing with target values of approximately $130 million and $45 million, respectively. The vesting of these performance awards can range from 0% to 200% based on performance outcomes.
Alphabet stated that the compensation package is designed to recognize Pichai’s contributions and enhance his focus on expanding the company’s more established “Other Bets” ventures. The company emphasized the significant progress made by Waymo and Wing under Pichai’s leadership, highlighting the alignment of incentives to drive further development in these areas for the benefit of shareholders.
This new compensation plan underscores the substantial growth in Alphabet’s value during Pichai’s tenure. Reportedly, the company’s market capitalization surged from around $535 billion when Pichai assumed the role of Google CEO in 2015 to $3.6 trillion, briefly exceeding $4 trillion in January.
The announcement coincides with notable real estate transactions by Google’s co-founders, Larry Page and Sergey Brin, in Miami. Page purchased two properties in Coconut Grove for $173.4 million, while Brin was linked to a $51 million waterfront mansion in Miami Beach. These acquisitions come amid discussions about a proposed California ballot measure that could impose a one-time tax of up to 5% on certain individuals and trusts with assets exceeding $1 billion.
Despite Alphabet’s soaring stock price making Pichai extremely affluent, he has maintained a relatively lower public profile compared to the company’s founders. Reports indicate that Pichai became a billionaire last year, with a stake in Alphabet valued at around $440 million and over $650 million worth of Alphabet stock sold since assuming the CEO position.