DEF 14A of Alphabet Inc.
Filed Apr 28, 2017 · FY20160001308179-17-000170
Director Nominees
Director Nominees The following table provides summary information about each director nominee as of April 19, 2017.
Director Nominees
| | | Director | | Experience/ | | Membership on Standing Committees | | | | | Name | Age | Since | Occupation | Qualification | Independent | AC | LDCC | NCGC | EC | | Larry Page | 44 | 1998 | Chief Executive Officer, Alphabet, Co-Founder and Director | Leadership, Technology | | | | | | | Sergey Brin | 43 | 1998 | President, Alphabet, Co-Founder and Director | Leadership, Technology | | | | | | | Eric E. Schmidt | 61 | 2001 | Executive Chairman of the Board of Directors of Alphabet | Leadership, Technology | | | | | | | L. John Doerr | 65 | 1999 | General Partner of Kleiner Perkins Caufield & Byers | Leadership, Technology, Finance, Global, Industry | | | | | | | Roger W. Ferguson, Jr. | 65 | 2016 | President and Chief Executive Officer of TIAA | Leadership, Finance, Global | | | | | | | Diane B. Greene | 61 | 2012 | Senior Vice President, Google, Former Chief Executive Officer and President of VMware | Leadership, Technology, Industry | | | | | | | John L. Hennessy | 64 | 2004 | Former President of Stanford University | Leadership, Education, Technology | | | | | | | Ann Mather | 57 | 2005 | Former Chief Financial Officer of Pixar | Leadership, Finance | | | | | | | Alan R. Mulally | 71 | 2014 | Former Chief Executive Officer and President of Ford | Leadership, Finance, Global, Industry | | | | | | | Paul S. Otellini | 66 | 2004 | Former Chief Executive Officer and President of Intel | Leadership, Technology, Global, Industry | | | | | | | K. Ram Shriram | 60 | 1998 | Managing Partner of Sherpalo Ventures | Leadership, Technology, Global, Industry | | | | | | | Shirley M. Tilghman | 70 | 2005 | Former President of Princeton University | Leadership, Education | | | | | |
Director Nominees
| AC | Audit Committee | | Committee Chairperson | | LDCC | Leadership Development and Compensation Committee | | Audit Committee Financial Expert | | NCGC | Nominating and Corporate Governance Committee | | Lead Independent Director | | EC | Executive Committee | | |
Director Nominees
Each director nominee serves as a current director and attended at least 75% of all meetings of the Board of Directors and each committee on which she or he sat during 2016. Roger W. Ferguson, Jr. was appointed to our Board of Directors and the Audit Committee effective June 24, 2016.
Directors and Executive Officers
Directors and Executive Officers The names of our directors and executive officers and their ages, positions, and biographies as of April 19, 2017 are set forth below. Our executive officers are appointed by, and serve at the discretion of, our Board of Directors. There are no family relationships among any of our directors or executive officers.
Directors and Executive Officers
| Name | Age | Position | | Larry Page | 44 | Chief Executive Officer, Alphabet, Co-Founder and Director | | Sergey Brin | 43 | President, Alphabet, Co-Founder and Director | | Eric E. Schmidt | 61 | Executive Chairman of the Board of Directors of Alphabet | | L. John Doerr | 65 | Director | | Roger W. Ferguson, Jr. | 65 | Director | | Diane B. Greene | 61 | Senior Vice President, Google, and Director | | John L. Hennessy | 64 | Lead Independent Director | | Ann Mather | 57 | Director | | Alan R. Mulally | 71 | Director | | Paul S. Otellini | 66 | Director | | K. Ram Shriram | 60 | Director | | Shirley M. Tilghman | 70 | Director | | David C. Drummond | 54 | Senior Vice President, Corporate Development, Chief Legal Officer, and Secretary, Alphabet | | Sundar Pichai | 44 | Chief Executive Officer, Google | | Ruth M. Porat | 59 | Senior Vice President and Chief Financial Officer, Alphabet and Google |
Larry Page
Larry Page
Director Since 1998
Director Since 1998 Larry Page, the Chief Executive Officer of Alphabet, was one of Google’s founders and has served as a member of our Board of Directors since its inception in September 1998, and as Google’s Chief Executive Officer from April 2011 to October 2015 (when he became the Chief Executive Officer of Alphabet). From July 2001 to April 2011, Larry served as Google’s President, Products. In addition, from September 1998 to July 2001, Larry served as Google’s Chief Executive Officer, and from September 1998 to July 2002, as Google’s Chief Financial Officer. Larry holds a Master of Science degree in computer science from Stanford University and a Bachelor of Science degree in engineering, with a concentration in computer engineering, from the University of Michigan.
Sergey Brin
Sergey Brin
Director Since 1998
Director Since 1998 Sergey Brin, President of Alphabet, was one of Google’s founders and has served as a member of our Board of Directors since its inception in September 1998. Previously, Sergey served as Google’s President, Technology and Co-Founder. In addition, from September 1998 to July 2001, Sergey served as Google’s President and Chairman of Google’s Board of Directors. Sergey holds a Master of Science degree in computer science from Stanford University and a Bachelor of Science degree with high honors in mathematics and computer science from the University of Maryland at College Park.
Eric E. Schmidt
Eric E. Schmidt
Director Since 2001
Director Since 2001 Eric E. Schmidt, Executive Chairman of the Board of Directors of Alphabet, has served as the Executive Chairman of our Board of Directors since April 2011 and as a member of our Board of Directors since March 2001. From July 2001 to April 2011, Eric served as Google’s Chief Executive Officer. He was the chairman of Google’s Board of Directors from March 2001 to April 2004, and again from April 2007 to April 2011. Prior to joining Google, from April 1997 to November 2001, Eric served as chairman of the Board of Directors of Novell, Inc., a computer networking company, and, from April 1997 to July 2001, as the Chief Executive Officer of Novell. From 1983 until March 1997, Eric held various positions at Sun Microsystems, Inc., a supplier of network computing solutions, including Chief Technology Officer from February 1994 to March 1997, and President of Sun Technology Enterprises from February 1991 until February 1994. Eric holds a Doctoral degree and a Master of Science degree in computer science from the University of California, Berkeley, and a Bachelor of Science degree in electrical engineering from Princeton University.
L. John Doerr
L. John Doerr L. John Doerr has served as a member of our Board of Directors since May 1999. John has been a General Partner of Kleiner Perkins Caufield & Byers, a venture capital firm, since August 1980. John has also been a member of the board of directors of Amyris, Inc., a renewable products company, since May 2006, and serves on its nominating and governance committee; and Zynga, Inc., a provider of social game services, since April 2013. John holds a Master of Business Administration degree from Harvard Business School, and a Master of Science degree in electrical engineering and computer science, and a Bachelor of Science degree in electrical engineering from Rice University. Roger W. Ferguson, Jr.
Director Since 2016
Director Since 2016 Roger W. Ferguson, Jr. has served as a member of our Board of Directors since June 2016. Roger has served as the President and Chief Executive Officer of TIAA, a major financial services company, since April 2008. He joined TIAA after his tenure at Swiss Re, a global reinsurance company, where he served as Chairman of the firm’s America Holding Corporation, Head of Financial Services, and a member of the Executive Committee from 2006 to 2008. Prior to that, Roger joined the Board of Governors of the U.S. Federal Reserve System in 1997 and served as its Vice Chairman from 1999 to 2006, and was a consultant at McKinsey & Company from 1984 to 1997. Roger has been a member of the board of directors of General Mills, Inc., a manufacturer and marketer of branded consumer foods, since December 2015, and serves on its corporate governance committee and finance committee; and International Flavors & Fragrances, Inc., a creator of flavors and fragrances, since April 2010, and serves as chair of its compensation committee. He is currently Chairman of the Conference Board and serves on the board of trustees of the Institute for Advanced Study and the board of trustees of the Memorial Sloan Kettering Cancer Center. Roger holds a Bachelor of Arts degree in economics, a Doctoral degree in economics, and a Juris Doctor degree, all from Harvard University.
Diane B. Greene
Diane B. Greene
Director Since 2012
Director Since 2012 Diane B. Greene has served as a member of our Board of Directors since January 2012 and as a Senior Vice President of Google since December 2015. Diane founded bebop Technologies, Inc. (bebop) and served as Chief Executive Officer and a member of its board of directors from December 2012 to December 2015 when bebop was acquired by Google. Diane has also been a member of the board of directors of Intuit Inc., a provider of business and financial management solutions, since August 2006 and serves on its compensation committee and as chair of its nominating and corporate governance committee. Diane co-founded VMware, Inc., a virtualization software company, in 1998 and took the company public in 2007. She served as Chief Executive Officer and President of VMware from 1998 to 2008, as a member of the board of directors of VMware from 2007 to 2008, and as an Executive Vice President of EMC Corporation, a provider of information infrastructure and virtual infrastructure technologies, solutions and services, from 2005 to 2008. Prior to VMware, Diane held technical leadership positions at Silicon Graphics Inc., a provider of technical computing, storage and data center solutions, Tandem Computers, Inc., a manufacturer of computer systems, and Sybase Inc., an enterprise software and services company, and was Chief Executive Officer of VXtreme, Inc., a developer of streaming media solutions. Diane is also a lifetime member of The MIT Corporation, the governing body of the Massachusetts Institute of Technology. Diane holds a Master of Science degree in computer science from the University of California, Berkeley, a Master of Science degree in naval architecture from the Massachusetts Institute of Technology, and a Bachelor of Arts degree in mechanical engineering from the University of Vermont.
John L. Hennessy
John L. Hennessy
Director Since 2004
Director Since 2004 John L. Hennessy has served as a member of our Board of Directors since April 2004, and as Lead Independent Director since April 2007. John served as the President of Stanford University from September 2000 to August 2016. John has also been a member of the board of directors of Cisco Systems, Inc., a networking equipment company, since January 2002, and serves on its nominating and governance committee and acquisition committee. He also serves as a trustee of the Gordon and Betty Moore Foundation and as a director of the Chan Zuckerberg Biohub. From 1994 to August 2000, John held various positions at Stanford, including Dean of the Stanford University School of Engineering and Chair of the Stanford University Department of Computer Science. John holds a Doctoral degree and a Master of Science degree in computer science from the State University of New York, Stony Brook, and a Bachelor of Science degree in electrical engineering from Villanova University.
Ann Mather
Ann Mather
Director Since 2005
Director Since 2005 Ann Mather has served as a member of our Board of Directors since November 2005. Ann has also been a member of the board of directors of: Arista Networks, Inc., a computer networking company, since June 2013, and serves as chair of its audit committee; Glu Mobile Inc., a publisher of mobile games, since September 2005, and serves on its nominating and corporate governance committee; Netflix, Inc., a streaming media company, since July 2010, and serves as chair of its audit committee; and Shutterfly, Inc., an internet-based image publishing company, since May 2013 and serves on its audit committee. Ann has also been an independent trustee to the Dodge & Cox Funds board of trustees since May 2011. Ann was previously a director of MoneyGram International, Inc., a global payment services company, from May 2010 to May 2013, and Solazyme, Inc., a biotechnology company, from April 2011 to November 2014. From 1999 to 2004, Ann was Executive Vice President and Chief Financial Officer of Pixar, a computer animation film studio. Prior to her service at Pixar, Ann was Executive Vice President and Chief Financial Officer of Village Roadshow Pictures, the film production division of Village Roadshow Limited. Ann holds a Master of Arts degree from Cambridge University in England, is an honorary fellow of Sidney Sussex College, Cambridge, and is a chartered accountant.
Alan R. Mulally
Alan R. Mulally
Director Since 2014
Director Since 2014 Alan R. Mulally has served as a member of our Board of Directors since July 2014. Alan served as President and Chief Executive Officer of Ford Motor Company, a global automotive company, from September 2006 through June 2014. Alan was previously a member of the board of directors of Ford and served on its finance committee from September 2006 through June 2014. From March 2001 to September 2006, Alan served as Executive Vice President of the Boeing Company and President and Chief Executive Officer of Boeing Commercial Airplanes, Inc. He also was a member of the Boeing Executive Council. Prior to that time, he served as President of Boeing’s space and defense business. Alan served as co-chair of the Washington Competitiveness Council and sat on the advisory boards of NASA, the University of Washington, the University of Kansas, the Massachusetts Institute of Technology, and the U.S. Air Force Scientific Advisory Board. He is a member of the U.S. National Academy of Engineering and a fellow of England’s Royal Academy of Engineering. Alan holds a Bachelor of Science and Master of Science degrees in aeronautical and astronautical engineering from the University of Kansas, and a Master’s degree in Management from the Massachusetts Institute of Technology as a 1982 Alfred P. Sloan fellow.
Paul S. Otellini
Paul S. Otellini
Director Since 2004
Director Since 2004 Paul S. Otellini has served as a member of our Board of Directors since April 2004. Paul served as the Chief Executive Officer and President of Intel Corporation, a semiconductor manufacturing company, from May 2005 to May 2013, and as a member of its board of directors from 2002 to May 2013. He also served as Intel’s Chief Operating Officer from 2002 to May 2005. From 1974 to 2002, Paul held various positions at Intel, including Executive Vice President and General Manager, Intel Architecture Group, and Executive Vice President and General Manager, Sales and Marketing Group. Paul holds a Master of Business Administration degree from the University of California, Berkeley, and a Bachelor of Arts degree in economics from the University of San Francisco.
K. Ram Shriram
K. Ram Shriram
Director Since 1998
Director Since 1998 K. Ram Shriram has served as a member of our Board of Directors since September 1998. Ram has been a managing partner of Sherpalo Ventures, LLC, an angel venture investment company, since January 2000. From August 1998 to September 1999, Ram served as Vice President of Business Development at Amazon.com, Inc., an ecommerce company. Prior to that, Ram served as President at Junglee Corporation, a provider of database technology, which was acquired by Amazon.com in 1998. Ram was an early member of the executive team at Netscape Communications Corporation. Ram is also on the Stanford University Board of Trustees. Ram holds a Bachelor of Science degree in mathematics from the University of Madras, India.
Shirley M. Tilghman
Shirley M. Tilghman
Director Since 2005
Director Since 2005 Shirley M. Tilghman has served as a member of our Board of Directors since October 2005. Shirley served as the President of Princeton University from June 2001 to June 2013. Shirley serves as a trustee of the Institute for Advanced Study, Amherst College, the Advantage Testing Foundation, and the King Abdullah University of Science and Technology, as a fellow for Harvard College, as a director of the Broad Institute, and as a member of the Science Advisory Board of the Chan Zuckerberg Initiative. From August 1986 to June 2001, she served as a Professor at Princeton University, and from August 1988 to June 2001, as an Investigator at Howard Hughes Medical Institute. In 1998, she took the role as founding director of Princeton’s multi-disciplinary Lewis-Sigler Institute for Integrative Genomics. Shirley holds a Doctoral degree in biochemistry from Temple University, and a Bachelor of Science degree with honors in chemistry from Queen’s University.
Consideration of Director Nominees
Consideration of Director Nominees
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Director Compensation for 2016
Director Compensation for 2016 The following table summarizes compensation earned by our directors other than Larry, Sergey, and Eric during 2016.
Director Compensation for 2016
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | | L. John Doerr(2) | 75,000 | 351,676 | — | 426,676 | | Roger W. Ferguson, Jr.(3) | — | 1,004,789 | — | 1,004,789 | | Diane B. Greene(4) | 39,825 | 187,002 | 43,455,532 | 43,682,359 | | John L. Hennessy(5) | 75,000 | 351,676 | — | 426,676 | | Ann Mather(5) | 100,000 | 351,676 | — | 451,676 | | Alan R. Mulally(6) | 75,000 | 351,676 | — | 426,676 | | Paul S. Otellini(5) | 75,000 | 351,676 | — | 426,676 | | K. Ram Shriram(5) | 75,000 | 351,676 | — | 426,676 | | Shirley M. Tilghman(5) | 75,000 | 351,676 | — | 426,676 |
Director Compensation for 2016
| The amounts in the Stock Awards column reflect the aggregate grant date fair value of GSUs granted to directors in 2016 calculated in accordance with FASB ASC Topic 718. The grant date fair value of GSUs granted to the non-employee directors on July 6, 2016 (GSU grant following the 2016 Annual Meeting of Stockholders) was $697.77 per share.(1) | | On December 31, 2016, 50 Class A and 1,141 Class C GSUs were outstanding.(2) | | Roger was appointed to serve as a member of our Board of Directors and the Audit Committee effective June 24, 2016. In connection with his appointment, he received our standard initial compensation for new non-employee directors consisting of a $1.0 million GSU grant made July 6, 2016 (the first Wednesday of the month following his appointment). These GSUs vest at the rate of 1/4(th) on the 25(th)day of the month in which the grant’s first anniversary occurs, and an additional 1/48(th) will vest on the 25(th) day of each month thereafter, subject to continued service on our Board of Directors through the applicable vesting dates. On December 31, 2016, 1,440 Class C GSUs were outstanding.(3) | | In July 2016, Diane received a pro-rated annual cash retainer fee and GSU grant for her service as a non-employee director from July 2015 to December 2015. After becoming a Google employee in December 2015, Diane no longer receives compensation for her service as a member of our Board of Directors. Diane’s “All Other Compensation” represents her total compensation in 2016 as a Google employee: $650,000 in base salary; an aggregate of $42,781,734 in two non-director SVP equity awards (one GSU award vested 1/8(th) on March 25, 2016, with an additional 1/8(th) vesting quarterly thereafter, the other GSU award vested 1/16(th) on March 25, 2016, with an additional 1/16(th) vesting quarterly thereafter, subject to continued employment on such vesting dates); $14,469 in life insurance premiums; and $9,329 in other benefits and perquisites. On December 31, 2016, 50 Class A and 40,169 Class C GSUs were outstanding.(4) | | On December 31, 2016, 50 Class A and 1,141 Class C GSUs were outstanding.(5) | | On December 31, 2016, 1,544 Class C GSUs were outstanding.(6) |
Section 2—Elements of Pay
Section 2—Elements of Pay In 2016, we offered base salary and equity awards to our named executive officers. Beginning in 2016, all executive officers receive variable pay solely through equity awards. See “Equity” under Section 4 of the CD&A for additional details.
Equity Awards
Equity Awards We reinforce management’s focus on long-term stockholder value and commitment to the company through biennial equity awards and minimum stock ownership requirements:
Equity Awards
| • | Biennial equity awards—We make regular biennial equity awards to our named executive officers (other than Larry, Sergey, and Eric) in even-numbered years. Biennial equity grants encourage executives to take a longer-term view of our business and allow us to incorporate longer performance periods into our pay decisions. | | • | Minimum stock ownership requirements—We require minimum stock ownership as follows: (i) the Founders of Google Inc., the Chief Executive Officer of Alphabet, our Executive Chairman, and the Chief Executive Officer of Google Inc. shall each own shares of Alphabet stock equal in value to at least $14.0 million; (ii) senior vice presidents of Alphabet or Google Inc. shall each own shares of Alphabet stock equal in value to at least $4.0 million. |
Equity Awards
In 2016, we granted regular biennial equity awards to Sundar and Ruth. See “Equity” under Section 4 of the CD&A for additional details.
Role of Company and Individual Performance
Role of Company and Individual Performance The Leadership Development and Compensation Committee uses overall company performance, defined below, as an input in determining each named executive officer’s equity award. For Alphabet-level named executive officers (Larry, Sergey, Eric, Ruth, and David), company performance is defined as Alphabet’s financial and operational performance and progress against Alphabet’s strategic goals. For Google’s Chief Executive Officer (Sundar), company performance is defined as Google’s financial and operational performance and progress against Google’s strategic goals. The Leadership Development and Compensation Committee also considers individual performance in determining each named executive officer’s equity awards. Larry assesses each named executive officer’s performance and accomplishments, and discusses these appraisals with the Leadership Development and Compensation Committee. The Leadership Development and Compensation Committee then makes a final decision on each named executive officer’s equity compensation based on overall Alphabet or Google performance and his or her individual performance.
Section 3—Determining Competitive Levels of Pay
Section 3—Determining Competitive Levels of Pay Our executive compensation decisions are informed by market data in addition to reviews of individual roles and performance. We use peer group data to obtain compensation benchmarks for our named executive officers. For 2016, we considered peers to be companies that met at least three of the following criteria:
Section 3—Determining Competitive Levels of Pay
Overall, we retained the same peer group in 2016 as in 2015. When appropriate, we supplement publicly available peer group data with comparable opportunities at other S&P 500 companies and startup organizations. The Leadership Development and Compensation Committee does not utilize the services of an outside compensation consultant to assess pay levels.
Pay Mix
Pay Mix Our named executive officers receive the vast majority of their pay from equity compensation, consistent with market benchmarks. Sundar and Ruth received regular biennial equity awards in 2016 (see “Equity” section below for further details). Larry and Sergey declined to receive performance-based compensation. In addition, Eric and David did not receive grants in 2016, therefore no value for equity compensation is reflected in their 2016 pay mix. The table below shows 2016 pay mix details, including salaries and the fair value of equity awards made in 2016. The table does not include any other compensation disclosed in the “All Other Compensation” column of our Summary Compensation Table.
Base Salary
Base Salary We set salaries for our named executive officers based on their responsibilities and trends we observe in the market (see Section 3 of this CD&A, “Determining Competitive Levels of Pay” for further details). In 2004, Larry and Sergey asked that their salaries each be reduced to $1 per year. Since 2005, the Leadership Development and Compensation Committee has offered them market-competitive salaries annually. For 2016, Larry and Sergey once again declined our salary offers and therefore receive salaries of $1 each. In 2016, Larry reviewed the market benchmarks for our other named executive officers and recommended that we hold salaries constant at 2015 levels. Based on this assessment, the Leadership Development and Compensation Committee decided to maintain salaries for our named executive officers (other than Larry, Sergey, and Eric) at $650,000. We set Eric’s salary at a higher level than our other named executive officers based on market benchmarks for the Executive Chairman role. Since transitioning to his current role as Executive Chairman in 2011, Eric has received a salary of $1.25 million, which we maintained in 2016. Beginning in 2016, Eric will no longer receive cash bonuses.
Equity
Equity Our current practice is to grant GSUs as equity awards to Google employees. We intend to grant biennial equity awards to our named executive officers (other than Larry, Sergey, and Eric) that vest quarterly over a four-year period. Larry, Sergey, and Eric did not receive equity grants in 2016; however, the Leadership Development and Compensation Committee will continue to review their compensation on an ongoing basis. In January 2016, the Leadership Development and Compensation Committee granted biennial equity awards of $209.0 million and $40.3 million to Sundar and Ruth, respectively. In determining the value of Sundar’s biennial equity award, Larry and the Leadership Development and Compensation Committee considered Sundar’s leadership of all of Google’s product areas and numerous successful product launches. Additionally, Larry and the Leadership Development and Compensation Committee considered Sundar’s promotion to CEO, Google in October 2015 and his leadership potential as CEO. In determining the value of Ruth’s biennial equity award, Larry and the Leadership Development and Compensation Committee considered the responsibilities of the CFO role, including leadership of Business Operations, People Operations, and Real Estate and Workplace Services. Additionally, they considered Ruth’s performance, including her leadership of financial operations and allocation of capital across Alphabet. Following the Alphabet reorganization in October 2015, David has provided oversight and guidance to the Other Bets. We are currently exploring alternative compensation structures for David that reflect his contributions. As a result, David did not receive a biennial equity award in 2016.
Risk Considerations
Risk Considerations The Leadership Development and Compensation Committee reviewed our compensation programs for employees and concluded that these programs do not create risks that are reasonably likely to have a material adverse effect on the company. The Leadership Development and Compensation Committee believes that the design of our annual and long-term incentives focuses performance on long-term value creation and discourages short-term risks at the expense of long-term results. A substantial portion of employees’ compensation is delivered in the form of equity awards, further aligning their interests with those of stockholders. The Leadership Development and Compensation Committee believes that the following risk oversight and compensation design features safeguard against excessive risk-taking:
Risk Considerations
| – | Our equity awards are subject to vesting conditions that encourage focus on long-term interests rather than only short-term results. | | – | Equity awards typically vest over a four-year period to ensure our named executive officers have significant value tied to long-term stock price performance. | | – | Our named executive officers are subject to minimum stock ownership requirements. This ensures that each named executive officer will hold a significant amount of our equity to further align his or her interests with those of our stockholders over the long term. | | – | We prohibit all speculative and hedging transactions involving our securities. As a result, our named executive officers cannot insulate themselves from the effects of poor stock price performance. | | – | We have internal controls over financial reporting, the measurement and calculation of performance relative to goals, and other financial, operational, and compliance policies and practices designed to protect our compensation programs from manipulation by any employee. |
Timing of Equity Award Grants
Timing of Equity Award Grants The effective grant date for all equity awards to employees, members of our Board of Directors, and non-employee advisors is the first Wednesday of the month following the date on which the equity award is approved by the Leadership Development and Compensation Committee, unless otherwise specified by our Board of Directors or the Leadership Development and Compensation Committee. The Leadership Development and Compensation Committee does not grant equity compensation awards in anticipation of the release of material nonpublic information. Similarly, we do not time the release of material nonpublic information based on equity award grant dates.
Post-Employment and Change in Control Payments
Post-Employment and Change in Control Payments We have no agreements with our named executive officers that provide for additional or accelerated compensation upon termination of the executive’s employment or a change in control of Alphabet, except as set forth below. Upon a change in control of Alphabet and, unless our Board of Directors or Leadership Development and Compensation Committee determines otherwise, if the successor corporation does not assume or substitute the equity awards held by our employees, including our named executive officers, all unvested stock options and unvested GSUs will fully vest. The table below shows our estimates of the value each of our named executive officers would have received if their unvested GSUs as of December 31, 2016 had become fully vested as a result of a change in control. All stock options held by our named executive officers as of December 31, 2016 are fully vested. The estimated benefit amount of unvested GSUs was calculated by multiplying the number of unvested GSUs by the closing price of our Class A common stock or Class C capital stock on December 31, 2016, which were $792.45 per share and $771.82 per share, respectively.
Post-Employment and Change in Control Payments
| Name | Number of Unvested GSUs at December 31, 2016 (#) | Estimated Benefit of Unvested GSUs at December 31, 2016 ($) | | Larry Page | — | — | | Sergey Brin | — | — | | Eric E. Schmidt | 98,846 | 77,310,916 | | Sundar Pichai | 673,924 | 520,877,767 | | Ruth M. Porat | 58,075 | 44,823,447 | | David C. Drummond | 70,788 | 54,635,594 |
Summary Compensation Table
Summary Compensation Table The following table sets forth information regarding the compensation paid to, or earned by, our named executive officers for the fiscal year ended December 31, 2016.
Summary Compensation Table
| Name and | | Salary | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Non-Qualified Deferred Compensation Earnings | All Other Compensation | Total | | Principal Position | Year | ($)(1) | ($)(2) | ($)(3) | ($) | ($) | ($)(4) | ($)(5) | ($) | | Larry Page(6) | 2016 | 1 | — | — | — | — | — | — | 1 | | CEO, | 2015 | 1 | — | — | — | — | — | — | 1 | | Alphabet, and Co-Founder | 2014 | 1 | — | — | — | — | — | — | 1 | | Sergey Brin(6) | 2016 | 1 | — | — | — | — | — | — | 1 | | President, Alphabet, | 2015 | 1 | — | — | — | — | — | — | 1 | | and Co-Founder | 2014 | 1 | — | — | — | — | — | — | 1 | | Eric E. Schmidt | 2016 | 1,250,000 | — | — | — | — | 2,430,685 | 629,106(7) | 4,309,791 | | Executive Chairman, | 2015 | 1,254,808 | 6,000,000 | — | — | — | — | 783,370 | 8,038,178 | | Alphabet | 2014 | 1,250,000 | 6,000,000 | 100,443,838 | — | — | — | 996,934 | 108,690,772 | | Sundar Pichai | 2016 | 650,000 | — | 198,695,790 | — | — | — | 372,410(8) | 199,718,200 | | Chief Executive Officer, Google | 2015 | 652,500 | — | 99,829,142 | — | — | — | 150,460 | 100,632,102 | | Ruth M. Porat | 2016 | 650,000 | — | 38,313,173 | — | — | — | 110,956(9) | 39,074,129 | | Senior Vice President and Chief Financial Officer, Alphabet and Google | 2015 | 395,000 | 5,000,000 | 25,052,554 | — | — | — | 603,932 | 31,051,486 | | David C. Drummond | 2016 | 650,000 | — | — | — | — | — | 14,387(10) | 664,387 | | Senior Vice President, | 2015 | 652,500 | — | — | — | — | — | 20,323 | 672,823 | | Corporate Development, Chief Legal Officer, and Secretary, Alphabet | 2014 | 650,000 | 3,500,000 | 40,092,200 | — | — | — | 16,688 | 44,258,888 |
Summary Compensation Table
| Salaries reflect amounts earned by the named executive officers in the relevant fiscal year. Includes amounts deferred pursuant to Section 401(k) of the Code.(1) | | The amounts in the Bonus column consist of the annual cash bonuses paid to named executive officers for performance in the relevant fiscal year. Includes amounts deferred pursuant to Section 401(k) of the Code. For Eric, also includes amounts deferred pursuant to our nonqualified deferred compensation plan in 2014 and 2015.(2) | | Amounts reflect the aggregate grant date fair value of GSUs computed in accordance with FASB ASC Topic 718 and are not necessarily an indication of which named executive officers received the most gains from previously granted equity awards. The grant date fair value of each GSU award is measured based on the closing price of our Class A common stock or Class C capital stock, as applicable, on the date of grant.(3) | | Represents the portion of earnings under our deferred compensation plan that is considered to be “above-market” earnings under applicable SEC rules.(4) | | All other compensation generally consists of the Company’s 401(k) company match of up to $9,000, life insurance premiums paid by the Company for the benefit of the named executive officer, personal use of company aircraft, and the market value of a holiday gift given to each employee, net of tax withholding, unless otherwise noted. The aggregate incremental cost of personal use of the company aircraft is calculated based on a cost-per-flight-hour charge developed by a nationally recognized and independent service. The charge reflects the direct operating cost of the aircraft, including fuel, additives and lubricants, an allocable allowance for airframe, engine and APU maintenance and restoration, crew travel expenses, on board catering, and trip-related landing/hangar/ramp fees and parking costs. This charge does not include any fixed costs that do not change based on usage, such as pilots’ and other employees’ salaries, home hanger expenses, and general taxes and insurance.(5) | | Larry and Sergey each receive $1 in base salary and do not participate in our cash bonus program or our equity programs.(6) | | Includes $330,107 for personal security and $270,595 for personal use of aircraft provided by Google.(7) | | Includes $322,241 for personal security and $38,561 for personal use of aircraft provided by Google.(8) | | Includes $89,811 for personal security and $413 for personal use of aircraft provided by Google.(9) | | Includes $143 for personal use of aircraft provided by Google.(10) |
Grants of Plan-Based Awards in 2016
Grants of Plan-Based Awards in 2016 The following table provides information regarding the amount of equity awards granted in 2016 for each of the named executive officers.
Grants of Plan-Based Awards in 2016
| | | | Equity Grants(1) | | | Name | Grant Date | Date of Approval of Equity Awards by Committee | All Other Stock Awards: Number of Stock Shares or Units (#) | Grant Date Fair Value of Stock Awards ($) | | Larry Page | — | — | — | — | | Sergey Brin | — | — | — | — | | Eric E. Schmidt | — | — | — | — | | Sundar Pichai | 2/3/2016 | 2/3/2016 | 273,328(2) | 198,695,790 | | Ruth M. Porat | 2/3/2016 | 2/3/2016 | 52,704(2) | 38,313,173 | | David C. Drummond | — | — | — | — |
Grants of Plan-Based Awards in 2016
| Stock awards (GSUs) are shown at their aggregate grant date fair value in accordance with FASB ASC Topic 718. The fair value of each GSU award is measured based on the closing price of our Class C capital stock on the date of grant.(1) | | The exact number of GSUs comprising the equity award was calculated by dividing the target GSU grant value by the closing price of our Class C capital stock on February 2, 2016, rounding to the nearest whole share number.(2) |
Outstanding Equity Awards at 2016 Fiscal Year-End
Outstanding Equity Awards at 2016 Fiscal Year-End The following table provides information on the current holdings of stock options and unvested GSUs by our named executive officers at December 31, 2016.
Outstanding Equity Awards at 2016 Fiscal Year-End
| | | Option Awards | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Option Exercise Price(2) ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested(3) ($) | | Larry Page | — | — | — | — | — | — | | Sergey Brin | — | — | — | — | — | — | | Eric E. Schmidt | 2/5/2014(4) | — | — | — | 49,423 | 39,165,256 | | | 2/5/2014(4) | — | — | — | 49,423 | 38,145,660 | | | 2/2/2011 | 181,840 | 306.61 | 2/2/2021 | — | — | | | 2/2/2011 | 181,840 | 305.39 | 2/2/2021 | — | — | | Sundar Pichai | 2/3/2016(5) | — | — | — | 204,996 | 158,220,013 | | | 8/6/2014(6) | — | — | — | 353,939 | 273,177,199 | | | 8/6/2014(7) | — | — | — | 44,243 | 34,147,632 | | | 5/1/2013(8) | — | — | — | 35,373 | 28,031,334 | | | 5/1/2013(8) | — | — | — | 35,373 | 27,301,589 | | | 4/4/2012 | 8,646 | 318.21 | 4/4/2022 | — | — | | | 4/4/2012 | 8,646 | 316.94 | 4/4/2022 | — | — | | | 8/4/2010 | 1,459 | 253.67 | 8/4/2020 | — | — | | | 8/4/2010 | 1,459 | 252.65 | 8/4/2020 | — | — | | | 7/29/2009 | 2,436 | 218.56 | 7/29/2019 | — | — | | | 7/29/2009 | 2,436 | 217.68 | 7/29/2019 | — | — | | Ruth M. Porat | 2/3/2016(5) | — | — | — | 39,528 | 30,508,501 | | | 6/3/2015(9) | — | — | — | 18,547 | 14,314,946 | | David C. Drummond | 8/6/2014(6) | — | — | — | 70,788 | 54,635,594 | | | 4/4/2012 | 44,955 | 318.21 | 4/4/2022 | — | — | | | 4/4/2012 | 44,955 | 316.94 | 4/4/2022 | — | — | | | 4/4/2012 | 8,646 | 318.21 | 4/4/2022 | — | — | | | 4/4/2012 | 8,646 | 316.94 | 4/4/2022 | — | — | | | 4/6/2011 | 29,288 | 287.66 | 4/6/2021 | — | — | | | 4/6/2011 | 29,288 | 286.52 | 4/6/2021 | — | — | | | 12/1/2010 | 9,998 | 282.74 | 12/1/2020 | — | — | | | 12/1/2010 | 9,998 | 281.61 | 12/1/2020 | — | — | | | 3/4/2009 | 34,138 | 159.78 | 3/4/2019 | — | — | | | 3/4/2009 | 34,138 | 159.14 | 3/4/2019 | — | — |
Outstanding Equity Awards at 2016 Fiscal Year-End
| All outstanding options are fully vested and exercisable.(1) | | The option exercise prices have been retroactively adjusted to reflect the April 2, 2014 stock split.(2) | | The market value of unvested GSUs is calculated by multiplying the number of unvested GSUs held by the applicable named executive officer by the closing price of our Class A common stock and Class C capital stock, as applicable, on December 31, 2016, which was $792.45 per share and $771.82 per share, respectively.(3) | | This award vests as follows: 1/16(th) of GSUs shall vest on May 25, 2015 and an additional 1/16(th) will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.(4) | | This award vests as follows: 1/16(th) of GSUs shall vest on March 25, 2016 and an additional 1/16(th) will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.(5) | | This award vests as follows: 100% of GSUs shall vest on April 25, 2018, subject to continued employment on such vesting date.(6) | | This award vests as follows: 50% of GSUs shall vest on April 25, 2016 and the remaining 50% will vest on April 25, 2017, subject to continued employment on such vesting dates.(7) | | This award vests as follows: 1/72 of GSUs shall vest on May 25, 2013 and an additional 1/72 will vest monthly thereafter until the units are fully vested, subject to continued employment on such vesting dates.(8) | | This award vests as follows: 1/5(th) of GSUs shall vest on December 25, 2016 and an additional 1/10(th) will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.(9) |
Option Exercises and Stock Vested in Fiscal 2016
Option Exercises and Stock Vested in Fiscal 2016 The following table provides information for the named executive officers on stock option exercises during the year ended December 31, 2016, including the number of shares acquired upon exercise and the value realized, before payment of any applicable withholding tax and broker commissions, and GSUs that vested during the same period.
Option Exercises and Stock Vested in Fiscal 2016
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Larry Page | — | — | — | — | | Sergey Brin | — | — | — | — | | Eric E. Schmidt | — | — | 43,930 | 32,820,227 | | Sundar Pichai | — | — | 242,502 | 180,095,528 | | Ruth M. Porat | — | — | 31,723 | 23,691,839 | | David C. Drummond | 40,000 | 22,896,848 | 44,956 | 32,740,107 |
Option Exercises and Stock Vested in Fiscal 2016
| The value realized on exercise is calculated as the product of (a) the number of shares of our Class A common stock or Class C capital stock, as applicable, for which the stock options were exercised and (b) the excess of the closing price of our Class A common stock or Class C capital stock, as applicable, on the NASDAQ Global Select Market on the date of the exercise over the applicable exercise price per share of the stock options.(1) | | The value realized on vesting is calculated as the product of (a) the number of shares of our Class A common stock or Class C capital stock, as applicable, underlying the GSUs that vested and (b) the closing price of our Class A common stock or Class C capital stock, as applicable, on the NASDAQ Global Select Market on the day before vesting.(2) |
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation The following table provides information about contributions, earnings, and balances under our nonqualified deferred compensation plan in fiscal year 2016. We do not provide matching contributions to the deferred compensation plan, and in fiscal year 2016 there were no withdrawals by or distributions to our named executive officers.
Non-Qualified Deferred Compensation
| Name | Executive Contributions in 2016 ($) | Aggregate Earnings in 2016 ($)(1) | Aggregate Balance at December 31, 2016 ($)(2) | | Larry Page | — | — | — | | Sergey Brin | — | — | — | | Eric E. Schmidt | — | 2,879,024 | 29,636,502 | | Sundar Pichai | — | 60,724 | 4,373,105 | | Ruth M. Porat | N/A | N/A | N/A | | David C. Drummond | — | — | — |
Non-Qualified Deferred Compensation
| The amount reported under Aggregate Earnings in 2016 shows the net amount credited to each officer’s account as a result of the performance of the investment vehicle in which his or her account was deemed invested. For Eric, $2,430,685 of the Aggregate Earnings in 2016 represents “above-market” earnings, and is included in the Summary Compensation Table. For Sundar, none of the Aggregate Earnings in 2016 represents “above-market” earnings, and therefore is not included in the Summary Compensation Table.(1) | | The amount reported under Aggregate Balance at December 31, 2016 shows the amount of the non-qualified deferred compensation account balance at the end of 2016. For Eric, $26,757,478 of the Aggregate Balance at December 31, 2016 represents the amount previously reported as Aggregate Balance at December 31, 2015 in the 2016 proxy statement. For Sundar, $4,312,381 of the Aggregate Balance at December 31, 2016 represents the amount previously reported as Aggregate Balance at December 31, 2015 in the 2016 proxy statement.(2) |
Non-Qualified Deferred Compensation
Our deferred compensation plan is unfunded and unsecured, and participation is voluntary. Most U.S.-based employees are eligible to participate in the deferred compensation plan. As CFO, Ruth is ineligible to participate in the deferred compensation plan. The plan allows participants to defer a specified percentage (up to 100%) of their bonus for a period of three, four or five years, subject to certain exceptions. During the deferral period, the deferred amounts are hypothetically or “notionally” invested in one or more investments funds selected by the committee administering the deferred compensation plan. Each participant’s account is adjusted for gains or losses at least annually based on the rate of gain or loss on the assets in each notional investment fund. We do not guarantee any returns on participant contributions. If a participant’s employment terminates, distribution is made in the form of a lump sum following termination. During 2016, no named executive officer received a bonus that would be eligible to be deferred under this plan.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control We have no agreements with any of our named executive officers that provide for additional or accelerated compensation on the termination of the executive’s employment or a change in control of Alphabet, except as set forth under “Post-Employment and Change in Control Payments” on page 42 of this proxy statement.