Alphabet Inc. (NASDAQ:GOOG) CEO turns down large stock bonuses
Sundar Pichai was, for years, one of the world’s highest-paid corporate executives. Now he’s facing the opposite reality: No big paychecks at all.
The Google chief executive officer hasn’t received an equity award in more than two years. A key reason is that Pichai turned down a big new grant of restricted stock in 2018 because he felt he was already paid generously, according to a person familiar with the decision.
It’s unclear how much he passed up. But another giant payday — on top of hundreds of millions of dollars in previous awards — could have sparked a new round of controversy for the mild-mannered executive.
Technology companies are being increasingly blamed for all sorts of societal ills — including rising income inequality. Since getting the top job in 2015 for his engineering prowess, Pichai has had to address these concerns, while juggling a host of other politically charged issues.
“He may have looked at these numbers and said: ‘I’ve had enough’ — or he might just be trying to manage the optics of his pay,” said David Larcker, a professor who researches corporate governance at Stanford Graduate School of Business.
The board of Google parent Alphabet Inc. is scheduled to revisit the CEO’s pay later this year, said the person, who asked not to be identified discussing private matters. By then, almost all Pichai’s previous stock awards will have vested. That makes him an anomaly among U.S. corporate leaders, and is even raising questions about what’s next for the 46-year-old.
“Clearly there’s very little retentive effect left for Pichai,” said Fabrizio Ferri, an associate professor at the University of Miami who studies executive pay.
A Google spokeswoman declined to comment, and said the Alphabet board won’t comment either. The company and its directors have said nothing publicly about the CEO leaving any time soon. Pichai has never mentioned moving on either.
Google is known for its willingness to pay lavishly to attract and keep talented employees in the executive suite and beyond. Top bosses receive almost all of their compensation in the form of restricted shares, usually granted in even-numbered years. Pichai had been among the main beneficiaries.
In 2014, shortly before Pichai was promoted to take over many of Google co-founder Larry Page’s responsibilities, he received restricted stock worth about $250 million. The following year, when he became Google CEO, he got $100 million of stock. And in 2016, Pichai received another grant worth almost $200 million.
That was the year the Google CEO job began to morph from a technical leadership role into a political minefield. Employees marched in protest of President Donald Trump’s immigration plan in early 2016. Less than a year later, a memo from Google engineer James Damore claiming the company was biased against conservatives exploded into a national scandal.
In 2018, Google workers revolted over a military contract and a proposed censored search engine in China. In the fall of that year, thousands of staff walked out of their offices after discovering the company had given big bonuses to executives accused of sexual harassment.
At a staff meeting earlier this year, one Google worker asked why Pichai was paid hundreds of millions of dollars, while some employees struggle to afford to live in Silicon Valley, people familiar with the situation said at the time.
The criticism has been just as loud from outside the company. Google is facing multiple antitrust investigations around the world, and rising scrutiny in the U.S. over its size, power and access to personal data. Co-founders Page and Sergey Brin, have stepped away from day-to-day management, and former CEO Eric Schmidt, who used to handle politics, is leaving the board.
On Dec. 11, just over three years after taking the CEO job, a noticeably grayer Pichai sat before Congress being questioned about the political slants of his staff and algorithms, Chinese censorship and surveillance, and even a conspiracy theory about Hillary Clinton that spread on Google’s YouTube video service.
“Sundar is aging quickly,” said Matt McGowan, a former Google executive who left in 2016. “When you have a billion customers around the world, there’s always going to be hundreds of people who disagree with your decisions. And they’re loud.”
People who have worked with Pichai describe him as a consensus-builder who shies away from conflict. Key parts of the CEO job nowadays, like testifying before Congress and policing internal rancor, are not his favorite.
“He’s not a well-seasoned CEO who has been through these types of crises before. But he appears to be learning quickly,” McGowan said.
Pichai has revived revenue growth at Google, helping shares of Alphabet rise more than 50% since he took over the internet giant. However, the company missed Wall Street estimates last quarter and the CEO frustrated analysts on a recent conference call.
Reputation Institute, a management consultant, ranked Pichai first among major CEOs last year. In this year’s ranking, Pichai fell out of the top 10. “Maybe there are a few elements of doubt around his leadership credentials,” said Stephen Hahn-Griffiths, an executive at Reputation Institute.
Since that big 2016 stock award, Pichai has collected a $650,000 annual salary and typical CEO perks such as the cost of personal security. As of Tuesday’s close, he had 51,249 unvested Google shares, worth about $58.1 million, left to earn. They will vest in June, September and December, regulatory filings show.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 1,177.37.
The projected upper bound is: 1,175.40.
The projected lower bound is: 1,057.26.
The projected closing price is: 1,116.33.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 18.6200. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 10 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 36.84. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 21 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -127.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 6 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 21 period(s) ago.
Rex Takasugi – TD Profile
ALPHABET INC C closed up 1.490 at 1,117.950. Volume was 34% below average (neutral) and Bollinger Bands were 18% narrower than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1,142.40 1,190.35 1,132.59
Volatility: 20 31 34
Volume: 1,233,521 1,438,058 1,620,318
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
ALPHABET INC C is currently 1.3% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of GOOG.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on GOOG.O and have had this outlook for the last 19 periods.