Sundar Pichai
226 million dollars: While Google puts 12,000 employees on the street, the boss gets a fat block of shares
Alphabet CEO Sundar Pichai at a Google presentation
© Josh Edelson / AFP
Google is also one of the companies that are making layoffs on a large scale. At the same time, boss Sundar Pichai’s salary was announced last year. And that should annoy many of those who have been laid off.
In Silicon Valley, cuts are being made on a large scale. Whether Facebook’s parent company Meta, Amazon or Microsoft: all tech giants except Apple have laid off tens of thousands of employees. Google’s parent company Alphabet also cut jobs to save costs. However, CEO Sundar Pichai was not affected by the savings: Despite the group’s generous salaries, he earned 800 times the average employee’s salary last year.
This emerges from documents available to the Reuters news agency. According to official financial documents filed by Alphabet, Pichai was paid a total of $226 million last year. The vast majority of that, $218 million, was paid to Pichai in the form of shares.
No surprise payment
In fact, this payout itself is neither unusual nor surprising. Pichai’s employment contract assures him of the share packages every three years. He was last granted such a package in 2019. At that time he had even earned 281 million dollars within a year. In recent years, his salary has even been quite moderate by international standards. In 2021, for example, he earned significantly less at $6.3 million. Here, too, the largest part of the annual salary was paid in the form of performance bonuses. Pichai’s regular salary is just under two million dollars.
This means that it is significantly less than the salary of an average employee, especially with regard to Google, than is usual for top managers. The median income for the group in 2021 was just under $273,500. So Pichai’s regular salary, excluding bonuses, is about eight times that of his employees.
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Strange signal
The fact that last year it was more than 800 times that is a rather questionable signal given the current situation of the group. Alphabet imposed strict austerity measures earlier this year. 12,000 jobs are to be cut, which corresponds to around six percent of the global workforce. It was announced over the weekend that the company had stopped building a new, state-of-the-art headquarters in Silicon Valley. The group also wants to save half a billion dollars this year through office costs alone.
The fact that Google is going on an austerity course after a boom during the pandemic is also due to the collapse in advertising business as a result of the Ukraine war. Although the company still made a profit of 60 billion dollars in 2021, the plus was almost 16 billion less than in the previous year. The austerity course is well received on the stock exchange. While Alphabet lost 39 percent in value last year, the company’s shares have gained almost 20 percent since the announcement of the savings plans since the beginning of the year.