Google CEO Sundar Pichai just said ‘NO’ to his stock award
- Sundar Pichai, the CEO of tech giant, just passed up cashing in his stock award for this financial year a person familiar with the matter told Bloomberg.
- By the time Alphabet, Google's parent company, revises Pichai's salary later this year -- his
stock optionsworth $58.1 billion will no longer be unvested.
- The decision has sparked rumours around Pichai's departure from Google.
The man running one of the largest tech companies in the world hasn’t received an equity award in more than two years, according to Bloomberg.
He is following the footsteps of other American CEOs like Jeff Weiner of LinkedIn, and Plum Creek Timber Co.'s CEO, Rick Holley, who gave up stock awards of up to $2 million.
This latest act might bring back some of Pichai’s lost glory. He went from being the world’s ‘most reputable CEO’ in 2018 to vanishing from the list’s top 10 this year.
Here’s why it’s a big deal
The last stock award Pichai collected was back in 2016. Since then, his annual salary has been $650,000 along with perks like personal security. His portfolio currently has 51,249 unvested Google shares worth $58.1 million (₹4 billion). Not accepting any more new grants of restricted stock keeps that value from increasing.
Bloomberg’s speculated that this could mean that the
Unvested stock is that which is yet to be invested in the market, which is when they turn liquid.
It is common for top executives of companies to be paid in stocks, as they would be literally and figuratively invested in the success of the company. As the executive enhances the value of the company, their own coffers will build too.
Indian CEOs aren’t shy
In India however CEOs are not shy of taking home hefty packages. Last financial year, CP Gurnani — the MD and CEO of Tech Mahindra — took home ₹1.5 billion but ₹1.47 billion came exclusively from cashing in his stock options.
Anil Naik, Larsen and Toubro’s non-executive chairman took home millions just by cashing in all of his unused sick leaves worth ₹210 million, in 2018.
There have been cases where incarcerated CEOs like Chanda Kocchar of ICICI who is embroiled in giving away illegal loans to Videocon. She has been asked by the board of directors to give back bonuses that she accrued during her tenure, the exact amount of which has not been disclosed. According to latest reports, she is yet to pay the amount back.
(The story was updated to clarify that Pichai said 'NO' to the stock award in 2018 and $58.1 million is only the value of the vested shares, not the stock award.)