Google Gave Sunder Pichai $692M Pay Package
Synopsis
Alphabet gave Google’s chief executive, Sundar Pichai, one of the highest pay packages ever seen in corporate history: a three-year contract valued at as much as $692 million. The majority of the package is performance-based, with new stock compensation linked to Alphabet units Waymo and Wing. Pichai already has about $500 million worth of stock, and another $650 million has reportedly been sold. While he calmly remains ensconced in California, Google founders Larry Page and Sergey Brin are splurging hundreds of millions on Miami mansions, apparently to avoid a proposed billionaire wealth tax here.
Alphabet has ratified a new three-year pay package for Google CEO Sundar Pichai worth up to $692 million, predominantly linked to performance goals including stock tied to that of Waymo and Wing. Pichai already has nearly $500 million in shares. Then there are Google’s billionaires Larry Page and Sergey Brin, buying up the priciest real estate in Miami to escape California’s potential billionaires’ tax.
Key Highlights
- Google’s parent Alphabet awarded its chief executive a pay package potentially worth up to $692 million.
- The deal is for three years and largely depends on the company’s performance.
- They are new stock incentives tied to Alphabet’s moonshot gambles, Waymo and Wing, its drone delivery arm.
- Pichai and his wife already own shares worth nearly $500 million and have sold an estimated $650 million more.
The Pay Package, What Alphabet Just Approved
Alphabet has struck a three-year deal for its chief executive, Sundar Pichai, that could transform him into one of the most-paid corporate executives on earth. The potential value of the package could total $692 million, a figure that quickly turned heads in investor and business circles.
The transaction was disclosed in a regulatory filing. Though the headline number is staggering, it’s worth understanding that Pichai doesn’t just get to pocket this amount, most of the money only goes to him if Google meets certain performance targets specified by the company’s board.
Most of It Rides on Performance
Much of the pay package is performance-based, with new stock incentives tied to Waymo and Wing, Alphabet’s drone delivery venture. That means that Pichai’s true payout from the deal will depend heavily on whether those businesses grow and produce results.
It’s a structure increasingly seen among top executives at large tech companies. Boards want to make sure that huge pay packages reward real outcomes, not just longevity. If Waymo or Wing don’t meet targets, it could be a far cry from Pichai’s total take-home from this deal being more than the headline figure of $692 million.
How Much Is Pichai Worth Already?
Pichai and his wife currently own shares worth about $500 million, while another estimated $650 million has been sold since last summer. The stock he has accumulated in the years since then is stunningly valuable, thanks to almost a sevenfold increase in Google’s market cap since he took over in 2015.
Even though Pichai is one of the most powerful technology executives in the world, he has maintained a lower profile than Google’s billionaire founders. He still resides in Los Altos, Calif., and attracts far less tabloid scrutiny than many other luminaries of Silicon Valley.
How Google’s Founders Are Spending Their Money
Larry Page and Sergey Brin, the world’s second- and fourth-richest people, have been making media waves lately, for purchasing former lavish Miami properties, a move interpreted by many as an evasion of California’s proposed Billionaire Tax Act. This ballot measure would impose a one-time 5% surcharge on net worth over $1 billion on the nearly 200 billionaires in the state.
Page is said to have dropped more than $173 million on two mansions in Coconut Grove, Florida, and Brin was attached to a $51 million megamansion, not counting two previous purchases totalling $92 million. Pichai, in contrast, made no similar moves and is seemingly staying put in California, opting for a quieter path than his billionaire bosses.
FAQs
- What is Sundar Pichai’s new pay package?
The pay package the Alphabet board signed off on for Pichai could be worth as much as $692 million over three years.
- Is the $692 million guaranteed?
No. Much of it is tied to performance, so Pichai only gets paid if Google and its businesses reach their goals.
- What is Waymo?
Waymo is the self-driving car company spun off from Google. Waymo’s performance is tied to Pichai’s new pay, which includes stock incentives.
- How long has Sundar Pichai served as Google’s C.E.O.?
Pichai has served as Google’s chief executive since 2015, a time when the company’s market value increased nearly sevenfold.
- Why are Larry Page and Sergey Brin purchasing real estate in Miami?
The two founders have also been buying up costly Miami properties, which many believe to be a bid to escape a proposed one-time tax on billionaires in California.
Follow Inspirepreneur Magazine for the business news.
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
