DEF 14A of Alphabet Inc.
Filed Apr 27, 2018 · FY20170001308179-18-000222
Director Nominees
Director Nominees The following table provides summary information about each director nominee as of April 18, 2018.
Director Nominees
| Name | Age | Director Since | Occupation | Experience/ Qualification | | Membership on Standing Committees | | | | | | | | | | Independent | AC | LDCC | NCGC | EC | | Larry Page | 45 | 1998 | Chief Executive Officer, Alphabet, and Co-Founder | Leadership, Technology | | | | | | | Sergey Brin | 44 | 1998 | President, Alphabet, and Co-Founder | Leadership, Technology | | | | | | | Eric E. Schmidt | 62 | 2001 | Technical Advisor, Former Executive Chairman, Alphabet | Leadership, Technology | | | | | | | L. John Doerr | 66 | 1999 | General Partner of Kleiner Perkins Caufield & Byers | Leadership, Technology, Finance, Global, Industry | | | | | | | Roger W. Ferguson, Jr. | 66 | 2016 | President and Chief Executive Officer of TIAA | Leadership, Finance, Global | | | | | | | Diane B. Greene | 62 | 2012 | Senior Vice President, Chief Executive Officer, Google Cloud, Former Chief Executive Officer and President of VMware | Leadership, Technology, Industry | | | | | | | John L. Hennessy | 65 | 2004 | Former President of Stanford University | Leadership, Education, Technology | | | | | | | Ann Mather | 58 | 2005 | Former Chief Financial Officer of Pixar | Leadership, Finance | | | | | | | Alan R. Mulally | 72 | 2014 | Former Chief Executive Officer and President of Ford Motor Company | Leadership, Finance, Global, Industry | | | | | | | Sundar Pichai | 45 | 2017 | Chief Executive Officer, Google | Leadership, Technology | | | | | | | K. Ram Shriram | 61 | 1998 | Managing Partner of Sherpalo Ventures | Leadership, Technology, Global, Industry | | | | | |
Director Nominees
| AC | Audit Committee | | Committee Chairperson | | LDCC | Leadership Development and Compensation Committee | | Audit Committee Financial Expert | | NCGC | Nominating and Corporate Governance Committee | | Chairman of the Board of Directors | | 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 2017.
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 18, 2018 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 | 45 | Chief Executive Officer, Alphabet, Co-Founder and Director | | Sergey Brin | 44 | President, Alphabet, Co-Founder and Director | | Eric E. Schmidt | 62 | Technical Advisor, Alphabet, and Director | | L. John Doerr | 66 | Director | | Roger W. Ferguson, Jr. | 66 | Director | | Diane B. Greene | 62 | Senior Vice President, Chief Executive Officer, Google Cloud, and Director | | John L. Hennessy | 65 | Chairman of the Board | | Ann Mather | 58 | Director | | Alan R. Mulally | 72 | Director | | Sundar Pichai | 45 | Chief Executive Officer, Google, and Director | | K. Ram Shriram | 61 | Director | | David C. Drummond | 55 | Senior Vice President, Corporate Development, and Chief Legal Officer, Alphabet | | Ruth M. Porat | 60 | Senior Vice President, and Chief Financial Officer, Alphabet and Google |
Larry Page
Larry Page
Director Since 1998
Director Since 1998 Larry Page, 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 Eric E. Schmidt, Technical Advisor of Alphabet, has served as a member of our Board of Directors since March 2001, and as Executive Chairman of our Board of Directors from April 2011 to January 2018. 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 is a visiting innovation fellow at the Massachusetts Institute of Technology. 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 as chair of its nominating and governance committee and as a member of its leadership development and compensation committee. John was previously a director of Zynga, Inc., a provider of social game services, from April 2013 to May 2017. 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 as chair of its finance committee, and as a member of its corporate governance committee; and a member of the board of directors of 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, The Group of Thirty, and 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, Chief Executive Officer, Google Cloud, 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 was previously a director of Intuit Inc., a provider of business and financial management solutions, from August 2006 to January 2018. 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 John L. Hennessy has served as a member of our Board of Directors since April 2004 and as Chairman of the Board of Directors since January 2018. John previously served as our Lead Independent Director from April 2007 to January 2018. 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 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 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.
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.
Consideration of Director Nominees
Consideration of Director Nominees
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Director Compensation for 2017
Director Compensation for 2017 The following table summarizes compensation earned by our directors other than Larry, Sergey, Eric, and Sundar during 2017.
Director Compensation for 2017
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | | L. John Doerr(2) | 75,000 | 355,567 | – | 430,567 | | Roger W. Ferguson, Jr.(3) | 71,552 | 339,156 | – | 410,708 | | Diane B. Greene(4) | – | – | 674,177 | 674,177 | | John L. Hennessy(2) | 75,000 | 355,567 | – | 430,567 | | Ann Mather(2) | 100,000 | 355,567 | – | 455,567 | | Alan R. Mulally(5) | 75,000 | 355,567 | – | 430,567 | | Paul S. Otellini(6) | 75,000 | 355,567 | – | 430,567 | | K. Ram Shriram(2) | 75,000 | 355,567 | – | 430,567 | | Shirley M. Tilghman(2) | 75,000 | 355,567 | – | 430,567 |
Director Compensation for 2017
| The amounts in the Stock Awards column reflect the aggregate grant date fair value of GSUs granted to directors in 2017 calculated in accordance with FASB ASC Topic 718. The grant date fair value of GSUs granted to the non-employee directors on July 5, 2017 (GSU grant following the 2017 Annual Meeting of Stockholders) was $911.71 per share.(1) |
Director Compensation for 2017
| On December 31, 2017, there were 978 Class C GSUs outstanding.(2) |
Director Compensation for 2017
| On December 31, 2017, there were 1,256 Class C GSUs outstanding.(3) |
Director Compensation for 2017
| As a Google employee, Diane does not receive compensation for her service as a member of our Board of Directors. Diane’s “All Other Compensation” represents her 2017 Google employee total compensation: $650,000 in base salary; $15,048 in life insurance premiums; and $9,129 in other benefits and perquisites. On December 31, 2017, there were 20,105 Class C GSUs outstanding.(4) |
Director Compensation for 2017
| On December 31, 2017, there were 1,173 Class C GSUs outstanding.(5) |
Director Compensation for 2017
| On December 31, 2017, there were 1,116 Class C GSUs outstanding. On February 27, 2018, the Leadership Development and Compensation Committee approved the vesting of one year of Paul’s outstanding equity (totaling 499 Class C GSUs), beginning from the date of his passing on October 2, 2017.(6) |
Section 2—Elements of Pay
Section 2—Elements of Pay In 2017, 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. |
Equity Awards
| ● | Minimum stock ownership requirements—In January 2018, the Leadership Development and Compensation Committee and the Nominating and Corporate Governance Committee jointly recommended, and our Board of Directors approved, increasing our executive minimum stock ownership requirements as follows: (i) the Founders of Google, the Chief Executive Officer of Alphabet, and the Chief Executive Officer of Google shall each own shares of Alphabet stock equal in value to at least $30 million; and (ii) senior vice presidents of Alphabet or Google shall each own shares of Alphabet stock equal in value to at least $6 million. |
Equity Awards
We grant biennial equity awards to named executive officers in even years. In 2017, we did not grant equity awards to any named executive officers. 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 Ruth and David, company performance is defined as Alphabet’s financial and operational performance and progress against Alphabet’s strategic goals. For 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 2017, we determined our peer group by evaluating potential companies against the following criteria:
Section 3—Determining Competitive Levels of Pay
Overall, we retained the same peer group in 2017 as in 2016. 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. We granted regular biennial equity awards to our named executive officers (other than Larry, Sergey, and Eric) in 2016; therefore, no value for equity compensation is reflected in their 2017 pay mix. The table below shows 2017 pay mix details, including salaries and the fair value of equity awards made in 2017. 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 be reduced to $1 each per year. Since 2005, the Leadership Development and Compensation Committee has annually assessed peer company practices and offered Larry and Sergey market-competitive salaries. For 2017, Larry and Sergey once again declined our salary offers and therefore received salaries of $1 each. In 2017, the Leadership Development and Compensation Committee decided to maintain salaries for our named executive officers (other than Larry, Sergey, and Eric) at $650,000. Eric’s salary is set at a higher level than our other named executive officers based on market benchmarks for the Executive Chairman role. In 2017, Eric received a salary of $1.25 million.
Equity
Equity Our current practice is to grant GSUs as equity awards to Google employees. We intend to grant regular biennial equity awards to our named executive officers (other than Larry, Sergey, and Eric) that vest quarterly over a four-year period. We last granted biennial equity awards to named executive officers in 2016, and no named executive officers received equity grants in 2017.
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 risk taking 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
| ● | The majority of compensation provided to our named executive officers is delivered in restricted stock units, which is a variable pay element based on long-term company performance. As compensation of our named executive officers is tied to long-term performance, their interests are closely aligned with stockholders and they are motivated to carefully assess risks to the company to protect their compensation. |
Risk Considerations
| ● | Given that equity compensation comprises a high percentage of our named executive officers’ overall pay: |
Risk Considerations
| – | Our equity awards are subject to vesting conditions that encourage focus on long-term interests rather than only short-term results. |
Risk Considerations
| – | 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. |
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, 2017 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, 2017 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, 2017, which were $1,053.40 per share and $1,046.40 per share, respectively.
Post-Employment and Change in Control Payments
| Name | Number of Unvested GSUs at December 31, 2017 (#) | Estimated Benefit of Unvested GSUs at December 31, 2017 ($) | | Larry Page | – | – | | Sergey Brin | – | – | | Eric E. Schmidt | 54,914 | 57,654,209 | | Sundar Pichai | 531,029 | 555,810,237 | | Ruth M. Porat | 26,352 | 27,574,733 | | David C. Drummond | 70,788 | 74,072,563 |
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, 2017.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | Total ($) | | Larry Page(6) | 2017 | 1 | – | – | – | – | – | – | 1 | | Chief Executive Officer, | 2016 | 1 | – | – | – | – | – | – | 1 | | Alphabet, Co-Founder | 2015 | 1 | – | – | – | – | – | – | 1 | | Sergey Brin(6) | 2017 | 1 | – | – | – | – | – | – | 1 | | President, Alphabet, | 2016 | 1 | – | – | – | – | – | – | 1 | | and Co-Founder | 2015 | 1 | – | – | – | – | – | – | 1 | | Eric E. Schmidt | 2017 | 1,250,000 | – | – | – | – | 2,798,606 | 677,986(7) | 4,726,592 | | Technical Advisor, | 2016 | 1,250,000 | – | – | – | – | 2,430,685 | 629,106 | 4,309,791 | | Former Executive Chairman, Alphabet | 2015 | 1,254,808 | 6,000,000 | – | – | – | – | 783,370 | 8,038,178 | | Sundar Pichai | 2017 | 650,000 | – | – | – | – | – | 683,557(8) | 1,333,557 | | Chief Executive Officer, | 2016 | 650,000 | – | 198,695,790 | – | – | – | 372,410 | 199,718,200 | | Google | 2015 | 652,500 | – | 99,829,142 | – | – | – | 150,460 | 100,632,102 | | Ruth M. Porat | 2017 | 650,000 | – | – | – | – | – | 38,638(9) | 688,638 | | Senior Vice President, | 2016 | 650,000 | – | 38,313,173 | – | – | – | 110,956 | 39,074,129 | | Chief Financial Officer, Alphabet and Google | 2015 | 395,000 | 5,000,000 | 25,052,554 | – | – | – | 603,932 | 31,051,486 | | David C. Drummond | 2017 | 650,000 | – | – | – | – | – | 14,252 | 664,252 | | Senior Vice President, | 2016 | 650,000 | – | – | – | – | – | 14,387 | 664,387 | | Corporate Development, Chief Legal Officer, Alphabet | 2015 | 652,500 | – | – | – | – | – | 20,323 | 672,823 |
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) |
Summary Compensation Table
| 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, the amount also includes amounts deferred pursuant to our nonqualified deferred compensation plan in 2015. Beginning in 2016, executive officers no longer receive cash bonuses and instead receive all variable pay through equity awards.(2) |
Summary Compensation Table
| 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) |
Summary Compensation Table
| Represents the portion of earnings under our deferred compensation plan that is considered to be “above-market” earnings under applicable SEC rules. In 2017, we updated our calculation methodology to better align with SEC guidance.(4) |
Summary Compensation Table
| All other compensation generally consists of our 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) |
Summary Compensation Table
| Larry and Sergey each receive $1 in base salary and do not participate in our cash bonus program or our equity programs.(6) |
Summary Compensation Table
| Includes $296,353 for personal security and $353,229 for personal use of aircraft chartered by the company.(7) |
Summary Compensation Table
| Includes $637,538 for personal security and $33,599 for personal use of aircraft chartered by the company.(8) |
Summary Compensation Table
| Includes $12,085 for personal security and $505 for personal use of aircraft chartered by the company.(9) |
Grants of Plan-Based Awards in 2017
Grants of Plan-Based Awards in 2017 We last granted biennial equity awards to our named executive officers in 2016, and no plan-based awards were granted to named executive officers in fiscal year 2017.
Outstanding Equity Awards at 2017 Fiscal Year-End
Outstanding Equity Awards at 2017 Fiscal Year-End The following table provides information on the current holdings of stock options and unvested GSUs by our named executive officers at December 31, 2017.
Outstanding Equity Awards at 2017 Fiscal Year-End
| | | Option Awards | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Option Exercise Price(2) ($) | 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) | – | – | – | 27,457 | 28,923,204 | | | 2/5/2014(4) | – | – | – | 27,457 | 28,731,005 | | | 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) | – | – | – | 136,664 | 143,005,210 | | | 8/6/2014(6) | – | – | – | 353,939 | 370,361,770 | | | 5/1/2013(7) | – | – | – | 20,213 | 21,292,374 | | | 5/1/2013(7) | – | – | – | 20,213 | 21,150,883 | | | 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) | – | – | – | 26,352 | 27,574,733 | | David C. Drummond | 8/6/2014(6) | – | – | – | 70,788 | 74,072,563 | | | 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 2017 Fiscal Year-End
| All outstanding options are fully vested and exercisable.(1) |
Outstanding Equity Awards at 2017 Fiscal Year-End
| The option exercise prices have been retroactively adjusted to reflect the April 2, 2014 stock split.(2) |
Outstanding Equity Awards at 2017 Fiscal Year-End
| 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, 2017, which was $1,053.40 per share and $1,046.40 per share, respectively.(3) |
Outstanding Equity Awards at 2017 Fiscal Year-End
| This award vests as follows: 1/16(th) of GSUs vested on May 25, 2015 and an additional 1/16(th) will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.(4) |
Outstanding Equity Awards at 2017 Fiscal Year-End
| This award vests as follows: 1/16(th) of GSUs vested on March 25, 2016 and an additional 1/16(th) will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.(5) |
Outstanding Equity Awards at 2017 Fiscal Year-End
| This award vests as follows: 100% of GSUs will vest on April 25, 2018, subject to continued employment on such vesting date.(6) |
Outstanding Equity Awards at 2017 Fiscal Year-End
| This award vests as follows: 1/72 of GSUs vested on May 25, 2013 and an additional 1/72 will vest monthly thereafter until the units are fully vested, subject to continued employment on such vesting dates.(7) |
Option Exercises and Stock Vested in Fiscal 2017
Option Exercises and Stock Vested in Fiscal 2017 The following table provides information for the named executive officers on stock option exercises during the year ended December 31, 2017, including the number of shares acquired upon exercise and the value realized, before payment of any applicable withholding tax and broker commissions, and GSUs that vested during the same period.
Option Exercises and Stock Vested in Fiscal 2017
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Larry Page | – | – | | Sergey Brin | – | – | | Eric E. Schmidt | 43,932 | 41,539,455 | | Sundar Pichai | 142,895 | 131,000,288 | | Ruth M. Porat | 31,723 | 29,888,508 | | David C. Drummond | – | – |
Option Exercises and Stock Vested in Fiscal 2017
| 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.(1) |
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 2017. We do not provide matching contributions to the deferred compensation plan.
Non-Qualified Deferred Compensation
| Name | Executive Contributions in 2017 ($) | Aggregate Earnings in 2017 ($)(1) | Aggregate Withdrawals/ Distributions in 2017 ($)(2) | Aggregate Balance at December 31, 2017 ($)(3) | | Larry Page | – | – | – | – | | Sergey Brin | – | – | – | – | | Eric E. Schmidt | – | 3,625,563 | 3,618,179 | 29,643,886 | | Sundar Pichai | – | 52,779 | – | 4,425,884 | | Ruth M. Porat | N/A | N/A | N/A | N/A | | David C. Drummond | – | – | – | – |
Non-Qualified Deferred Compensation
| The amount reported under Aggregate Earnings in 2017 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, $2,798,606 of the Aggregate Earnings in 2017 represents “above-market” earnings, and is included in the Summary Compensation Table. For Sundar, none of the Aggregate Earnings in 2017 represents “above-market” earnings, and therefore is not included in the Summary Compensation Table.(1) |
Non-Qualified Deferred Compensation
| The amount reported under Aggregate Withdrawals/Distributions in 2017 shows the net amount debited from each officer’s account as a result of scheduled distributions. The distributions and deferral periods were elected by participants before the amounts were deferred, in accordance with plan rules. These amounts are not included in the Summary Compensation Table because these are payouts of prior years’ earnings and contributions.(2) |
Non-Qualified Deferred Compensation
| The amount reported under Aggregate Balance at December 31, 2017 shows the amount of the non-qualified deferred compensation account balance at the end of 2017. For Eric, $29,636,502 of this balance represents the amount previously reported as Aggregate Balance at December 31, 2016 in the 2017 proxy statement. For Sundar, $4,373,105 of this balance represents the amount previously reported as Aggregate Balance at December 31, 2016 in the 2017 proxy statement.(3) |
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 Chief Financial Officer, 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 2017, 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 41 of this proxy statement.
ALPHABET CEO PAY RATIO
ALPHABET CEO PAY RATIO The following table sets forth the ratio of Alphabet Chief Executive Officer Larry Page’s total compensation to that of Alphabet’s median employee for the year ended December 31, 2017.
ALPHABET CEO PAY RATIO
| Chief Executive Officer total annual compensation | $1 | | Median Employee total annual compensation | $197,274 | | Ratio of Chief Executive Officer to Median Employee total annual compensation | 1:197,274 or 0.000005 |
ALPHABET CEO PAY RATIO
To determine the median employee compensation, we analyzed all of Alphabet’s employees, excluding Alphabet’s Chief Executive Officer, as of December 31, 2017. We annualized wages and salaries for employees that were not employed for the full year. We used base salary and actual bonus as the consistently applied compensation metric to determine the median employee. If this resulted in more than one individual at the median level, we assessed the grant date fair value of standard equity awards for these individuals and selected the employee with the median award value. After identifying the median employee, we calculated annual total compensation for the median employee according to the methodology used to report the annual compensation of our named executive officers in the Summary Compensation Table on page 43.