Chief Executive Officer of Google and Alphabet, Sundar Pichai's salary has just been increased to $2 million per year, however, he is out to make at least $240 million more provided he sticks and the company hits its targets. This is according to a report contained in a December 17 Securities and Exchange Commission filing as reported by CNBC's Steve Kopack.
Sundar Pichai's new salary is expected to take effect from the first quarter of next year, precisely Jan1, 2020.
He is going to unlock at least $150 million more as long as he sticks around and certain company performance targets are met. The reason for this is that in addition to the increased salary, the CEO presently has a compensation package which includes stock awards that are worth far more than $2 million, of which some these packages are tied to the company's performance and his staying in the role.
Pichai has been Google's CEO since 2015, and he recently got promoted to become the CEO of the parent company, Alphabet, when the cofounders, Larry Page and Sergey Brin stepped down earlier this month.
According to Alphabet, Pichai would be eligible for the first portion of stock awards based on how the company performs against the S&P 100 index between the period of 2020 to 2021. He would also get the second block depending on how it does against the same metric over the period of 2020 to 2022.
It is important to note that while Alphabet said the "target value" of each portion of stock was $45 million, going by the contents of the filing and depending on performance, he could get paid out 0% of those awards or as much as 200%. This means that his actual payday could be quite a bit higher provide that Alphabet in particular outperformed. With respect to available data, this seems to be the first time Alphabet has included performance-based stock to executive payouts. This practice, however, is common in other major tech companies, like Uber, Microsoft, and Apple.
Pichai will also get another $120 million in restricted stock units that will become permanent over time, along with another $30 million "transitional award" in stock that will also become permanent in 2020. These particular earnings are not tied to Alphabet's performance, so Pichai will get them as long as he remains at the company.
Even though the salary has increased, Pichai still would not make the list of highest-paid tech CEOs in the United State. In 2019, the list was topped by Oracle's Mark Hurd, who died earlier this year, at $108.3 million. Microsoft CEO Satya Nadella made a base salary of $2.3 million, slightly higher than Pichai's, but that was only a small part of his total 2019 compensation of $42.9 million. He was paid another $10.8 million in cash, plus $29.6 million in stock awards based on Microsoft's performance under his lead.
According to a report by Bloomberg, when Pichai was CEO of Google, he made an annual base salary of $650,000 and previously shirked additional shares of the company.