Alphabet CEO Sundar Pichai saw his total pay last year rise to $226mn, thanks to a giant stock award that is likely to have made him one of America’s best-paid business leaders for the year.
News of the stock award, which Google’s parent company makes to its CEO once every three years and which was worth $218mn, follows the company’s move earlier this year to cut jobs across the board in the face of a sharp advertising slowdown. Pichai was reported at the time to have told workers that senior executives would receive lower bonuses as part of the cost-cutting.
Alphabet’s latest executive pay arrangements, which were finalised in December, before the job cuts, show little impact from the downturn. In the only direct impact on pay, Alphabet said it had halved the value of a special class of executive bonuses linked to ESG (environmental, social and governance) targets due to “macroeconomic conditions”. The cuts left the company’s most senior executives with $775,000 less in pay for 2022.
Many US companies have yet to disclose how much their leaders were paid last year, but in 2021 only eight public company CEOs received a package worth more than $226mn, according to an analysis by the AFL-CIO, a federation of US labour unions.
Pichai’s previous stock award, made in 2019, was valued at the time it was granted at $277mn. However, the company said that the target value it had established for its CEO’s latest stock compensation was the same as his 2019 award. The valuation reported in its official filings depends on a range of factors designed to estimate the ultimate value, such as the volatility in its share price.
The Alphabet boss’s 2022 pay package could ultimately be worth far more than the figure cited in the latest filing. The number of shares that will vest over the three-year period of the stock grant will depend partly on Alphabet’s performance, which the company said now plays a bigger factor in its CEO’s pay.
The value will also depend heavily on swings in Alphabet’s share price. Under a new rule adopted by the Securities and Exchange Commission last year, American companies are required for the first time to reveal how much earlier stock awards were actually worth once they vested and the executives received the benefits.
The new disclosures showed that Pichai’s 2019 stock package netted him $504mn in the following three years, much more than the value the company placed on it when it was first awarded.
Apart from the triennial stock award, the Google CEO receives an annual salary of $2mn and payments to cover his personal security, which in 2022 amounted to $5mn. In recent years, when he has not received a stock award, Pichai’s security costs have amounted to more than two-thirds of his annual compensation.