Google’s parent company, Alphabet, recently filed documents stating that CEO Sundar Pichai’s compensation for fiscal 2022 would be $226 million, making him one of the highest-paid executives in the world.
The compensation package was boosted by stock grants every three years, which amounted to $218 million in 2022. Pichai received no grants in 2021, and his salary has remained at $2 million for the past three years.
Despite Pichai’s hefty compensation package, Google faces a rapidly changing environment. The rise of AI products like ChatGPT could threaten Google‘s dominance in search. Additionally, the broader economic recession of 2022 hit the company hard, causing its stock to decline by 39%. However, the company’s fortunes are expected to pick up in 2023, with its stock predicted to rise by 19%.
Pichai’s stock award is on a three-year schedule, and he received a similar size package in 2019 when he was awarded $281 million. CEO compensation is a particularly sensitive topic in the tech industry, and Pichai’s package could come under fire, especially after a wave of massive layoffs at Alphabet and other big companies. Apple CEO Tim Cook, for example, recently cut his 2023 pay after coming under fire for making $100 million each in the last two years.
In 2022, Pichai’s compensation package was well ahead of other Alphabet executives. Prabhakar Raghavan, Google’s senior vice president of knowledge and information, and Philipp Schindler, the chief business officer of Google, both made about $37 million. In comparison, Chief Financial Officer Ruth Porat was paid $24.5 million. Their stock grants are made on an annual basis.
Alphabet began cutting about 12,000 jobs, or 6% of its global workforce, in January 2022, following months of other measures to cut spending and set new priorities. According to filings, the median total compensation for Alphabet employees in 2022 was $279,802, which makes Pichai’s pay 808 times that amount.
As part of the compensation package, Alphabet spent $5.94 million on Pichai’s security, according to filings. The high cost of security is not uncommon for high-profile executives, but it underscores the level of scrutiny and potential risks faced by leaders of major tech companies.
Pichai’s compensation package is undoubtedly substantial, reflecting his leadership of one of the world’s most influential companies. However, as Google faces new challenges and changing market conditions, it remains to be seen whether such high levels of executive compensation will continue to be deemed acceptable by the wider public and the tech industry.