Google CEO Shunned a Large Stock Award After Lavish Payouts

(Bloomberg) — 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.”