Google co-founders Larry Page and Sergey Brin have just received a $2bn retirement “gift” from investors. Page and Brin announced Tuesday that they will step down from day-to-day management at Alphabet, Google’s parent company. Alphabet’s shares jumped nearly 2 percent after the news, adding about $1 billion to both men’s net worth. They each own about 6% of Alphabet and still control the internet giant through shares that have special voting rights.
Alphabet’s share price rose after investors welcomed Sundar Pichai’s promotion to the role of Alphabet’s CEO, who will replace Mr Page. That means none of America’s three biggest tech companies have had their founders at the helm. Like Apple CEO Tim Cook and Microsoft CEO Satya Nadella, Mr Pichai’s position spree, which has been a long-time deputy, has steadily risen. He will replace Page as CEO after more than 15 years at the Mountain View-based internet giant. Mr Brin will also step down as president, which would make Mr Pichai the company’s undisputed leader.
The shift shows that Google, as a company, has entered the “middle-aged” era. In 1998, Brin and Page founded the company in a garage in California; by 2018, it had $137 billion in revenue and now has a market capitalization of $893 billion, second only to Apple and Microsoft in the S.P. 500.
Founders take a back seat
In addition to Apple, Microsoft and Google, the founders of other Silicon Valley giants have also taken a back seat. Larry Ellison, for example, founded Oracle and the current CEO is Safra Catz, but Ellison remains chairman. Meanwhile, Uber, the ride-hailing giant, and We Co, a shared office space company, are among the majors. Turn to outside people in the company for help in a volatile situation.
However, there are some exceptions worth noting. Jeff Bezos and Mark Zuckerberg each founded e-commerce giant Amazon and social networking giant Facebook, the fourth- and fifth-largest U.S. companies by market capitalisation. Bezos and Zuckerberg are still CEOs of the two companies.
This leadership transition has proved to be a good thing for both Apple and Microsoft. Since Mr. Cook became Apple’s CEO in August 2011, the company’s share price has risen more than 400 per cent;
Mr Pichai has been CEO of Google, Alphabet’s largest unit, since 2015. Alphabet’s share price has doubled during his tenure. However, the company is struggling to cope with increasing scrutiny from regulators and lawmakers.
Richest U.S. Company Executive
The success of Apple, Microsoft and Google has put Cook, Nadella and Pichai among the richest executives in the United States. All three are worth hundreds of millions of dollars as a result of the equity awards.
As an executive, Pichai, 47, is in a different situation than Cook and Nadella. Unlike Cook and Nadella, which rankfourth and sixth on Bloomberg’s executive compensation list, almost all of Pichai’s equity awards have been awarded, the documents show. By contrast, Cook, 59, still owns as many as 1.8 million restricted Apple stock units worth about $500 m, which will be awarded by August 2021, according to a recently disclosed filing. Nadella, 52, has access to up to 1.8 million shares of Microsoft shares through a long-term performance-based equity incentive scheme, worth about $275 million at current Microsoft prices.
Alphabet’s board may take action to change the discrepancy, but whatever the company decides to compensate Pichai, his fortune will still lag far behind That of Brin and Page. The two men have a combined net worth of about $125bn, according to the Bloomberg Billionaires Index.