In August 2015 the new holding company Alphabet was formed, which then housed Google and its vast array of subsidiaries. The move was made, partly, to remove Google’s moon-shot projects from the management of the world-renowned search company. Sundar Pichai became the Google CEO when founders Larry Page and Sergey Brin stepped down and was instated as the Alphabet CEO in 2019.
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While it’s no surprise that the Alphabet CEO would earn a large salary, in the past year Sundar Pichai was awarded $281 million in compensation, which mostly includes stock awards. At current exchange rates this equates to R5.3 billion. His annual salary was $650,000 in 2019 and will rise to $2 million in 2020.
Some of the stock awarded to Pichai will only be paid out depending on Alphabet’s stock returns relative to other companies on the S&P 100 stock index. In these uncertain times, most stock markets are down sharply as the world enters a bear market.
Pichai’s biggest challenge to date will no doubt be navigating Alphabet through the coronavirus and massive economic downturn. Google have always made the majority of their revenues from advertising and in a world where companies are cash strapped and less willing to spend on ads, we can expect Google to take a knock in the short term.
Compensation packages for senior executives are always linked to the performance of the company compared to a basket of competitors and other technology companies. Alphabet recently changed the companies it compares itself to when deciding on compensation packages. It added Netflix Inc, Comcast Corp and Salesforce.com Inc, while removing HP Inc and Qualcomm Inc. Other notable companies on the list include Apple, Facebook and Amazon Inc.
The Alphabet CEO has now received more than $1 billion in stock over the last six years as compensation.
