BENGALURU: Google’s parent company Alphabet has approved a new pay structure for CEO Sundar Pichai that links a larger chunk of his salary to performance. The committee of the board of directors of Alphabet has approved a new equity award for Pichai.
It has increased the proportion of performance stock units (PSUs) to 60 per cent from 43 per cent, and also increased the performance requirement for on-target PSU payout to the 55th percentile from the 50th percentile of total shareholder return.
Pichai’s last equity award was granted in December 2019. The Leadership Development and Compensation Committee of the Board increased Pichai’s salary to USD 2,000,000 effective January 1, 2020. It also provided equity awards in the form of performance stock units and restricted stock units.
The committee currently follows a triennial grant cycle for CEO equity awards.
“As with the 2019 award, the award consists of both performance-based and time-based equity. The vesting of a significant portion of the award will depend on Alphabet’s total shareholder return, and this performance-based equity may not vest at all,” Alphabet said in an SEC filing.
The committee has recognised Pichai’s strong performance as CEO, and it said that the on-target value of the award is unchanged from the 2019 award. Pichai was granted two tranches of PSUs with a target value of USD 63 million each.
The triennial award included a grant of USD 84 million in the form of Alphabet-restricted stock units. Pichai became Google’s CEO in 2015. In Q3 2022, the company’s revenues were USD 69.1 billion, up 6 per cent compared to last year.