Technology giant Google has increased CEO Sundar Pichai’s total potential compensation to $692 million ( ₹6,361 crore) over the next three years, making him one of the highest-paid chief executives in the world.
A major portion of Pichai’s package comes in performance stock units (PSUs) with a target value of $126 million, divided evenly into two tranches, Google told Financial Times on Friday. These stock awards are performance-linked, meaning their final value depends on how well Alphabet performs for shareholders.
How will the PSUs be valued?
The PSUs are measured by comparing parent company Alphabet’s total shareholder return with other companies in the S&P 100.
If Alphabet significantly outperforms its peers, the PSUs could pay up to twice the target amount, or $252 million. But if the company lags behind, the payout could even fall to zero.
The Indian-origin chief executive will also receive $84 million in restricted stock over the next three years, vesting roughly on a monthly basis as long as he remains at the company. In addition, he will continue to draw an annual salary of $2 million, according to FT.
Stock incentives linked to Waymo and Wing’s growth
As part of the pay package, Google has added two new stock incentives worth as much as $350 million, which is linked to the growth of its self-driving taxi arm Waymo and drone delivery start-up Wing.
Pichai will receive shares in Waymo with a target value of $130 million, and $45 million in Wing Aviation stock based on their “fair value” in the next three years. Again, both can pay out up to 200% of the target value if the performance goals tied to the businesses are met or exceeded.
In that case, the CEO can receive as much as $692 million, with a baseline amount of $391mn in stock and salary.
Pichai took over the as the chief executive of Google in August 2015. Since then, the company’s market capitalisation has increased nearly sevenfold from $535 billion to $3.6 trillion, briefly crossing $4 trillion in January.
This sharp increase in the company’s valuation has also boosted Pichai’s personal wealth, making the 53-year-old former McKinsey consultant a billionaire. His current net worth stands at $1.5 billion, according to data available on Forbes.
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