You may have been under the impression that WPP boss (and sometime MT contributor) Sir Martin Sorrell was well paid. He did, after all, receive a cool £43m for his services back in 2014, twice as much as the next best-paid FTSE 100 CEO. But as usual, the Brits have nothing on the Yanks when it comes to excess. Google CEO Sundar Pichai received a stock grant of $199m (£137m) in February, as part of his 2016 pay package. That' s on top of the $100.5m he received early in 2015, even before he got the top job at the search engine.
The $199m in stock will vest over three years, which takes the edge off somewhat, but it’s still a colossal sum. Assuming the share price at least holds (a cautious assumption at best, given what it’s done over the last 12 years), Pichai will now own $650m worth of Alphabet stock. But what about fairness, you may ask? What of the trend for shaming CEOs into toning it down? What about Fat Cat Tuesday?
Somehow it seems unlikely that the tech giant’s workers will take up the red flag and storm the Googleplex at the injustice of it all. Its 60,000 employees aren’t exactly badly paid themselves – according to salary benchmarker Payscale, a software engineer there would typically take home $83-183,000 after bonuses. Besides, these are highly motivated and ambitious workers. High pay at the top could just as easily be seen as an encouragement to work harder and get promoted.
Google’s decision to award these generous grants every two years was not, of course, made primarily with the rank and file in mind. It’s paying Pichai so much because it wants to keep him (would you leave before that stock vested?) and because it wants to reassure shareholders that its senior managers care about precisely the same thing they do: the share price.
Besides, what else would Alphabet’s founders and all-round top dogs Larry Page and Sergiy Brin (who between them own around $70bn in company stock) spend the cash on? Driverless cars? Internet ballons? A dividend? Don’t be ridiculous.
Photo credit: Maurizio Pesce.