The board of directors of Alphabet, Google’s parent company, announced Friday that sundar Pichai, Google’s new chief executive, will receive an annual salary of $2 million and an equity reward of up to hundreds of millions of dollars. Pichai has been Google’s CEO since 2015, and he was promoted to Alphabet CEO after the resignations of Google co-founders Larry Page and Sergey Brin this month. Prior to his departure, Page was ceo of Alphabet and Brin as president, and the latter position has now been abolished.
Mr. Pichai’s new shares do not have any additional voting rights, meaning Mr. Page and Mr. Brin will continue to control Alphabet’s board. Mr Pichai’s pay package as Alphabet’s new CEO will come into effect on January 1 next year, and he will be awarded equity based on time and performance. Of the $120 million based on time of service, 1/12 will be awarded on March 25, 2020, and then one-third each quarter thereafter, provided that he continues to be employed by the company.
Performance-based equity will be divided into two equal sections, each with a target value of $45 million. Alphabet could be awarded a stake of 0 to 200 per cent of each portion, based on alphabet’s total shareholder returns to companies with the Components of the S.P. 100 between 2020 and 2021 and between 2020 and 2022. The actual value of the equity grant will vary depending on the share price of Alphabet at the time.
Bloomberg reported in May that Mr. Pichai’s basic annual salary as Google’s CEO was $650,000, and said it had previously rejected an additional stake the company had granted him. A source close to the situation said Mr Pichai had turned down an additional restricted stake granted by Google in 2018 because he felt he had been paid generously, but it was not clear how much he had turned down the value.
After becoming Alphabet’s CEO, Pichai will represent the company’s public image, and the internet giant will continue to face challenges in the new year. Google is facing an antitrust investigation by 50 u.S. attorneys general from all states and territories, as well as reports that the U.S. Department of Justice is also investigating it. U.S. lawmakers have also said they will keep a close eye on Google and other technology companies facing scrutiny, focusing on privacy and data tracking policies.