Google CEO Sundar Pichai could earn as much as $692 million over the next three years after parent company Alphabet Inc. approved a new compensation package linked largely to company performance.
The pay package places Pichai among the highest-paid executives in the global technology industry. However, most of the amount is not a fixed salary. Instead, it comes in the form of stock awards that depend on how well the company performs in the coming years.
Pichai’s base salary will remain $2 million per year, which is relatively modest compared to the overall compensation. The bulk of the package will come through performance-based shares that could increase in value if Alphabet continues to grow.
Reports say the deal includes performance stock units worth around $126 million, which could rise to about $252 million if the company significantly outperforms other large firms in the S&P 100 index. In addition, he will receive restricted stock worth about $84 million, which will be granted gradually over three years as long as he remains with the company.
The company has also linked part of the incentives to the growth of some of its future-focused businesses. These include self-driving car project Waymo and drone delivery service Wing. If these businesses perform well, Pichai could receive additional stock rewards.
Alphabet’s board said the compensation structure is meant to reward long-term leadership and align the CEO’s pay with the company’s success. In other words, Pichai will benefit the most only if the company performs strongly in the coming years.
Pichai has led Google since 2015 and became CEO of Alphabet in 2019. Under his leadership, the company has expanded rapidly in areas such as cloud computing, artificial intelligence, hardware and digital services.
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