DEF 14A of Alphabet Inc.
Filed Apr 30, 2019 · FY20180001308179-19-000205
Director Nominees
Director Nominees The following table provides summary information about each director nominee as of April 25, 2019.
Director Nominees
| | | Director | | Experience/ | | Membership on Standing Committees | | | | | Name | Age | Since | Occupation | Qualification | Independent | AC | LDCC | NCGC | EC | | Larry Page | 46 | 1998 | Chief Executive Officer, Alphabet, and Co-Founder | Leadership, Technology | | | | | | | Sergey Brin | 45 | 1998 | President, Alphabet, and Co-Founder | Leadership, Technology | | | | | | | John L. Hennessy | 66 | 2004 | Former President of Stanford University | Leadership, Education, Technology | | | | | | | L. John Doerr | 67 | 1999 | General Partner of Kleiner Perkins Caufield & Byers | Leadership, Technology, Finance, Global, Industry | | | | | | | Roger W. Ferguson, Jr. | 67 | 2016 | President and Chief Executive Officer of TIAA | Leadership, Finance, Global | | | | | | | Ann Mather | 59 | 2005 | Former Chief Financial Officer of Pixar | Leadership, Finance | | | | | | | Alan R. Mulally | 73 | 2014 | Former Chief Executive Officer and President of Ford Motor Company | Leadership, Finance, Global, Industry | | | | | | | Sundar Pichai | 46 | 2017 | Chief Executive Officer, Google | Leadership, Technology | | | | | | | K. Ram Shriram | 62 | 1998 | Managing Partner of Sherpalo Ventures | Leadership, Technology, Global, Industry | | | | | | | Robin L. Washington | 56 | 2019 | Executive Vice President and Chief Financial Officer of Gilead Sciences, Inc. | Leadership, Technology, Finance, Global, Industry | | | | | |
Director Nominees
| AC | Audit Committee | | LDCC | Leadership Development and Compensation Committee | | NCGC | Nominating and Corporate Governance Committee | | EC | Executive Committee | | | Committee Chairperson | | | Audit Committee Financial Expert | | | Chairman of the Board of Directors |
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 2018.
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 25, 2019 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 | 46 | Chief Executive Officer, Alphabet, Co-Founder and Director | | Sergey Brin | 45 | President, Alphabet, Co-Founder and Director | | John L. Hennessy | 66 | Chairman of the Board | | L. John Doerr | 67 | Director | | Roger W. Ferguson, Jr. | 67 | Director | | Diane B. Greene | 63 | Director and Former Senior Vice President, Google, Chief Executive Officer for Google Cloud | | Ann Mather | 59 | Director | | Alan R. Mulally | 73 | Director | | Sundar Pichai | 46 | Chief Executive Officer, Google, and Director | | Eric E. Schmidt | 64 | Technical Advisor, Alphabet, and Director | | K. Ram Shriram | 62 | Director | | Robin L. Washington | 56 | Director | | David C. Drummond | 56 | Senior Vice President, Corporate Development, and Chief Legal Officer, Alphabet | | Ruth M. Porat | 61 | 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.
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 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 was previously a director and a member of the nominating and governance committee and acquisition committee of Cisco Systems, Inc., a networking equipment company, from January 2002 to December 2018. 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.
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 Bloom Energy Corporation, a clean energy company, since May 2002, and serves as its lead independent director and a member of the compensation and organization development 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. From 1984 to 1997, he was an associate and partner at McKinsey & Company. 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. Roger is also a member of the Smithsonian Institution’s Board of Regents and serves on the New York State Insurance Advisory Board. He is a fellow of the American Academy of Arts & Sciences and co-chairs its Commission on the Future of Undergraduate Education. He is currently Chairman of the Conference Board and serves on the boards of the American Council of Life Insurers, the Institute for Advanced Study, and the Memorial Sloan Kettering Cancer Center. He is a fellow of the American Philosophical Society and a member of the Economic Club of New York, the Council on Foreign Relations, and the Group of Thirty. 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 served as a Senior Vice President, Google, Chief Executive Officer for Google Cloud, from December 2015 to January 2019. 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 has been a member of the Supervisory Board of SAP SE, an enterprise application software company, since March 2018. Diane is also a lifetime member of The MIT Corporation, the governing body of the Massachusetts Institute of Technology. She is also a member of the National Academy of Engineering. 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 and an honorary doctorate from the University of Vermont.
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 more than 20 years of experience serving as a finance executive in a number of technology companies, particularly public companies, overseeing and assessing company performance. 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. Ann has also been an independent trustee to the Dodge & Cox Funds board of trustees since May 2011. 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 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 2001
Director Since 2001 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.
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 a Vice Chair of the Stanford University Board of Trustees, as well as a member of the Council on Foreign Relations. Ram holds a Bachelor of Science degree in mathematics from the University of Madras, India.
Robin L. Washington
Robin L. Washington
Director Since 2019
Director Since 2019 Robin L. Washington has served as a member of our Board of Directors since April 2019. Robin has been the Executive Vice President and Chief Financial Officer of Gilead Sciences, Inc., a biopharmaceutical company, since February 2014. She joined Gilead as Senior Vice President and Chief Financial Officer in May 2008. From January 2006 to June 2007, Robin served as Chief Financial Officer of Hyperion Solutions Corporation, an enterprise software company. Prior to Hyperion, Robin served in a number of executive positions with PeopleSoft, Inc., a provider of enterprise application software. Robin currently serves as a director of Honeywell International, Inc., a diversified technology and manufacturing company, since April 2013, and salesforce.com, inc., a provider of customer relationship management technology, since September 2013 where she currently chairs the audit committee. Robin also serves on the Board of Visitors, Graziadio School of Business and Management, Pepperdine University; the Presidents Council & Ross Business School Advisory Board, University of Michigan; and the UCSF Benioff Children’s Hospital Oakland Board of Directors. Robin holds a Master of Business Administration degree from Pepperdine University, a Bachelor of Arts degree in Business Administration from the University of Michigan, and is a certified public accountant.
Consideration of Director Nominees
Consideration of Director Nominees
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Director Compensation for 2018
Director Compensation for 2018 The following table summarizes compensation earned by our directors other than Larry, Sergey, Eric, and Sundar during 2018.
Director Compensation for 2018
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | | L. John Doerr(2) | 75,000 | 350,786 | — | 425,786 | | Roger W. Ferguson, Jr.(3) | 75,000 | 350,786 | — | 425,786 | | Diane B. Greene(4) | — | — | 47,502,388 | 47,502,388 | | John L. Hennessy(5) | 83,717 | 402,711 | — | 486,428 | | Ann Mather(2) | 100,000 | 350,786 | — | 450,786 | | Alan R. Mulally(6) | 75,000 | 350,786 | — | 425,786 | | K. Ram Shriram(2) | 75,000 | 350,786 | — | 425,786 | | Shirley M. Tilghman(7) | 51,725 | — | 100,000 | 151,725 |
Director Compensation for 2018
| The amounts in the Stock Awards column reflect the aggregate grant date fair value of GSUs granted to directors in 2018 calculated in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 (Compensation – Stock Compensation). The grant date fair value of GSUs granted to the non-employee directors on July 11, 2018 (GSU grant following the 2018 Annual Meeting of Stockholders) was $1,153.90 per share.(1) | | On December 31, 2018, there were 786 Class C GSUs outstanding.(2) | | On December 31, 2018, there were 1,070 Class C GSUs outstanding.(3) | | As a Google employee during 2018, Diane did not receive compensation for her service as a member of our Board of Directors. Diane’s “All Other Compensation” represents her 2018 Google employee total compensation: $650,000 in base salary; $46,612,647 in employee equity awards, the vesting of such equity awards subject to continued employment through the applicable vesting dates; $15,048 in life insurance premiums; $9,250 in 401(k) company match; $1,023 for personal use of aircraft chartered by the company; and $214,420 for personal security. On December 31, 2018, there were 41,501 Class C GSUs outstanding.(4) | | On January 31, 2018, our Board of Directors appointed John to serve as non-executive Chairman of the Board of Directors. In April 2018, the Leadership Development and Compensation Committee approved an additional $25,000 annual cash retainer and an additional $150,000 annual GSU grant for John given his additional duties. John’s compensation in 2018 was prorated for his period of service as a non-employee director (June 7, 2017 to January 30, 2018) and for his period of service as non-executive Chairman of the Board of Directors (January 31, 2018 to June 6, 2018). On December 31, 2018, there were 825 Class C GSUs outstanding.(5) | | On December 31, 2018, there were 777 Class C GSUs outstanding.(6) | | Shirley retired from our Board of Directors, effective February 15, 2018, and her director compensation in 2018 was prorated for her period of service as a non-employee director. Shirley’s “All Other Compensation” represents advisory fees paid by Calico, a subsidiary of Alphabet, for her role as Chairperson of the Calico Scientific Advisory Board and other services to Calico following her retirement from our Board of Directors.(7) |
Equity Awards
Equity Awards We reinforce management’s focus on long-term stockholder value and commitment to the company through equity awards and minimum stock ownership requirements:
Equity Awards
| • | Equity awards—We make periodic equity awards to our named executive officers (other than Larry, Sergey, and Eric), which are intended to represent equity compensation for each officer over a multi-year period. These awards are granted on an individual basis as deemed appropriate by our Founders and the Leadership Development and Compensation Committee. Our equity awards typically vest over a four-year period, encouraging executives to take a longer term view of our business and allowing us to incorporate longer performance periods into our pay decisions. | | • | Minimum stock ownership requirements—In January 2018, we increased our 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 $30.0 million; and (ii) senior vice presidents of Alphabet or Google shall each own shares of Alphabet stock equal in value to at least $6.0 million. |
Equity Awards
In 2018, we granted equity awards to Ruth and David. See “Equity” under Section 4 of this 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 as an input in determining each named executive officer’s equity award. For Ruth’s and David’s equity awards, company performance is defined as Alphabet’s financial and operational performance and progress against Alphabet’s strategic goals. The Leadership Development and Compensation Committee also considers individual performance in determining each named executive officer’s equity awards. For Ruth and David, the Leadership Development and Compensation Committee considered Larry’s appraisals of their individual performance and accomplishments. The Leadership Development and Compensation Committee then makes a final decision on each named executive officer’s equity compensation based on overall Alphabet and/or Google performance and 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 the reviews of individual roles and performance. We use peer group data to obtain compensation benchmarks for our named executive officers. For 2018, we determined our peer group by evaluating potential companies against the following criteria:
Pay Mix
Pay Mix The table below shows 2018 pay mix details, including salaries and the fair value of equity awards made in 2018. In 2018, only Ruth and David received equity awards (see “Equity” section below for additional details). The table does not include any other compensation disclosed in the “All Other Compensation” column of our Summary Compensation Table.
Equity
Equity Our current practice is to grant equity to Google employees in the form of GSUs. Larry, Sergey, Eric, and Sundar did not receive equity awards in 2018; however, the Leadership Development and Compensation Committee will continue to review their compensation on an ongoing basis. In January 2018, the Leadership Development and Compensation Committee granted equity awards of $46.0 million that vest over a four-year period to each of Ruth and David. In determining the value of Ruth’s equity award, Larry, Sundar, and the Leadership Development and Compensation Committee considered the responsibilities of the Alphabet and Google Chief Financial Officer 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 and Google. In determining the value of David’s equity award, Larry and the Leadership Development and Compensation Committee considered David’s contributions as a primary advisor to Larry and Sergey on Other Bet strategy, which includes providing guidance on investments, operations, talent strategy, and governance. Additionally, they considered David’s performance in his role providing direct oversight over certain Other Bet companies, as well as his role advising Alphabet’s management and Board of Directors as Chief Legal Officer and Secretary.
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
| – | Our equity awards are subject to vesting conditions that encourage focus on long-term interests rather than only short-term results, and create meaningful incentives for executive retention. | | – | 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, and are in compliance with, Alphabet’s 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, short-sale, 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 non-holiday 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, 2018 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, 2018 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, 2018, which were $1,044.96 per share and $1,035.61 per share, respectively.
Post-Employment and Change in Control Payments
| Name | Number of Unvested GSUs at December 31, 2018 (#) | Estimated Benefit of Unvested GSUs at December 31, 2018 ($) | | Larry Page | — | — | | Sergey Brin | — | — | | Eric E. Schmidt | 10,984 | 11,426,490 | | Sundar Pichai | 78,440 | 81,280,503 | | Ruth M. Porat | 44,682 | 46,273,126 | | David C. Drummond | 31,506 | 32,627,929 |
Non-Qualified Deferred Compensation Plan
Non-Qualified Deferred Compensation Plan We maintain a non-qualified deferred compensation plan for most of our U.S.-based employees. The plan allows participants to defer up to 100% of their bonus for a period of three, four, or five years, subject to certain exceptions. The deferred compensation plan is unfunded and unsecured, and participation is voluntary. We do not provide any matching contributions to the deferred compensation plan. During 2018, no named executive officer received a bonus that would be eligible to be deferred under this plan.
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 years ended December 31, 2018, 2017, and 2016.
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) Chief Executive Officer, Alphabet, and Co-Founder | 2018 | 1 | — | — | — | — | — | — | 1 | | | 2017 | 1 | — | — | — | — | — | — | 1 | | | 2016 | 1 | — | — | — | — | — | — | 1 | | Sergey Brin(6) President, Alphabet, and Co-Founder | 2018 | 1 | — | — | — | — | — | — | 1 | | | 2017 | 1 | — | — | — | — | — | — | 1 | | | 2016 | 1 | — | — | — | — | — | — | 1 | | Eric E. Schmidt Technical Advisor, Former Executive Chairman, Alphabet | 2018 | 1,250,000 | — | — | — | — | — | 362,016(7) | 1,612,016 | | | 2017 | 1,250,000 | — | — | — | — | 2,798,606 | 677,986 | 4,726,592 | | | 2016 | 1,250,000 | — | — | — | — | 2,430,685 | 629,106 | 4,309,791 | | Sundar Pichai Chief Executive Officer, Google | 2018 | 650,000 | — | — | — | — | — | 1,231,066(8) | 1,881,066 | | | 2017 | 650,000 | — | — | — | — | — | 683,557 | 1,333,557 | | | 2016 | 650,000 | — | 198,695,790 | — | — | — | 372,410 | 199,718,200 | | Ruth M. Porat Senior Vice President, Chief Financial Officer, Alphabet and Google | 2018 | 650,000 | — | 46,612,647 | — | — | — | 29,357(9) | 47,292,004 | | | 2017 | 650,000 | — | — | — | — | — | 38,638 | 688,638 | | | 2016 | 650,000 | — | 38,313,173 | — | — | — | 110,956 | 39,074,129 | | David C. Drummond Senior Vice President, Corporate Development, Chief Legal Officer, Alphabet | 2018 | 650,000 | — | 46,612,647 | — | — | — | 19,585(10) | 47,282,232 | | | 2017 | 650,000 | — | — | — | — | — | 14,252 | 664,252 | | | 2016 | 650,000 | — | — | — | — | — | 14,387 | 664,387 |
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) | | Effective 2016, our named executive officers do not receive cash bonuses and receive all variable pay through equity awards.(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) | | Generally consists of our 401(k) company match of up to $9,250, life insurance premiums paid by the company for the benefit of the named executive officer, and personal use of company aircraft, 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 hangar expenses, and general taxes and insurance.(5) | | Larry and Sergey each receive $1 in base salary and do not participate in our equity programs.(6) | | Includes $332,770 for personal security and $592 for personal use of aircraft chartered by the company. Eric’s “All Other Compensation” in 2018 reflects an update in our aircraft procedures and classification methodology.(7) | | Includes $1,213,068 for personal security and $3,052 for personal use of aircraft chartered by the company. In July 2018, the Leadership Development and Compensation Committee approved an overall security program for Sundar, which was implemented in August 2018.(8) | | Includes $546 for personal use of aircraft chartered by the company.(9) | | Includes $531 for personal use of aircraft chartered by the company.(10) |
Grants of Plan-Based Awards in 2018
Grants of Plan-Based Awards in 2018 The following table provides information regarding the equity awards granted in 2018 to our named executive officers.
Grants of Plan-Based Awards in 2018
| | | | Equity Grants(1) | | | Name | Grant Date | Date of Approval of Equity Awards by Committee | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($) | | Larry Page | — | — | — | — | | Sergey Brin | — | — | — | — | | Eric E. Schmidt | — | — | — | — | | Sundar Pichai | — | — | — | — | | Ruth M. Porat | 3/7/2018 | 3/7/2018 | 42,007(2) | 46,612,647 | | David C. Drummond | 3/7/2018 | 3/7/2018 | 42,007(2) | 46,612,647 |
Grants of Plan-Based Awards in 2018
| 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 March 6, 2018 ($1,095.06), rounding to the nearest whole share number.(2) |
Outstanding Equity Awards at 2018 Fiscal Year-End
Outstanding Equity Awards at 2018 Fiscal Year-End The following table provides information on the current holdings of stock options and unvested GSUs by our named executive officers at December 31, 2018.
Outstanding Equity Awards at 2018 Fiscal Year-End
| | | Option Awards | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Option Exercise Price(2) ($) | 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) ($) | | Larry Page | — | — | — | — | — | — | | Sergey Brin | — | — | — | — | — | — | | Eric E. Schmidt | 2/5/2014(4) | — | — | — | 5,492 | 5,738,920 | | | 2/5/2014(4) | — | — | — | 5,492 | 5,687,570 | | | 2/2/2011 | 181,840 | 306.61 | 2/2/2021 | — | — | | | 2/2/2011 | 181,840 | 305.39 | 2/2/2021 | — | — | | Sundar Pichai | 2/3/2016(5) | — | — | — | 68,332 | 70,765,303 | | | 5/1/2013(6) | — | — | — | 5,054 | 5,281,228 | | | 5/1/2013(6) | — | — | — | 5,054 | 5,233,973 | | | 4/4/2012 | 8,646 | 318.21 | 4/4/2022 | — | — | | | 4/4/2012 | 8,646 | 316.94 | 4/4/2022 | — | — | | | 8/4/2010 | 1,459 | 253.67 | 8/4/2020 | — | — | | | 8/4/2010 | 1,459 | 252.65 | 8/4/2020 | — | — | | | 7/29/2009 | 2,436 | 218.56 | 7/29/2019 | — | — | | | 7/29/2009 | 2,436 | 217.68 | 7/29/2019 | — | — |
Outstanding Equity Awards at 2018 Fiscal Year-End
| | | Option Awards | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Option Exercise Price(2) ($) | 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) ($) | | Ruth M. Porat | 3/7/2018(7) | — | — | — | 31,506 | 32,627,929 | | | 2/3/2016(5) | — | — | — | 13,176 | 13,645,197 | | David C. Drummond | 3/7/2018(7) | — | — | — | 31,506 | 32,627,929 | | | 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 | 2,844 | 159.78 | 3/4/2019 | — | — | | | 3/4/2009 | 2,844 | 159.14 | 3/4/2019 | — | — |
Outstanding Equity Awards at 2018 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, 2018, which was $1,044.96 per share and $1,035.61 per share, respectively.(3) | | This award vests as follows: 1/16(th) of GSUs vested on May 25, 2015 and an additional 1/16(th)will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.(4) | | This award vests as follows: 1/16(th) of GSUs vested on March 25, 2016 and an additional 1/16(th)will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.(5) | | This award vests as follows: 1/72(nd) of GSUs vested on May 25, 2013 and an additional 1/72(nd)will vest monthly thereafter until the units are fully vested, subject to continued employment on such vesting dates.(6) | | This award vests as follows: 1/16(th) of GSUs vested on March 25, 2018 and an additional 1/16(th)will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.(7) |
Option Exercises and Stock Vested in Fiscal 2018
Option Exercises and Stock Vested in Fiscal 2018 The following table provides information for the named executive officers on stock option exercises during the year ended December 31, 2018, including the number of shares acquired upon exercise and the value realized, before payment of any applicable withholding tax and broker commissions, and GSUs that vested during the same period.
Option Exercises and Stock Vested in Fiscal 2018
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Larry Page | — | — | — | — | | Sergey Brin | — | — | — | — | | Eric E. Schmidt | — | — | 43,930 | 49,042,304 | | Sundar Pichai | — | — | 452,589 | 468,537,431 | | Ruth M. Porat | — | — | 23,677 | 25,610,555 | | David C. Drummond | 62,588 | 60,167,027 | 81,289 | 83,560,946 |
Option Exercises and Stock Vested in Fiscal 2018
| The value realized on exercise is calculated as the product of (a) the number of shares of our Class A common stock or Class C capital stock, as applicable, for which the stock options were exercised and (b) the excess of the closing price of our Class A common stock or Class C capital stock, as applicable, on the NASDAQ Global Select Market on the date of the exercise over the applicable exercise price per share of the stock options.(1) | | The value realized on vesting is calculated as the product of (a) the number of shares of our Class A common stock or Class C capital stock, as applicable, underlying the GSUs that vested and (b) the closing price of our Class A common stock or Class C capital stock, as applicable, on the NASDAQ Global Select Market on the day before vesting.(2) |
Non-Qualified Deferred Compensation Plan
Non-Qualified Deferred Compensation Plan The following table provides information about contributions, earnings, and balances under our nonqualified deferred compensation plan in fiscal year 2018. We do not provide matching contributions to the deferred compensation plan.
Non-Qualified Deferred Compensation Plan
| Name | Executive Contributions in 2018 ($) | Aggregate Earnings in 2018 ($)(1) | Aggregate Withdrawals/ Distributions in 2018 ($)(2) | Aggregate Balance at December 31, 2018 ($)(3) | | Larry Page | — | — | — | — | | Sergey Brin | — | — | — | — | | Eric E. Schmidt | — | (592,700) | 7,554,211 | 21,496,974 | | Sundar Pichai | — | (3,832) | 4,422,051 | 0 | | Ruth M. Porat | N/A | N/A | N/A | N/A | | David C. Drummond | — | — | — | — |
Non-Qualified Deferred Compensation Plan
| The amount reported under Aggregate Earnings in 2018 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 and Sundar, none of the Aggregate Earnings in 2018 represent “above-market” earnings, and therefore are not included in the Summary Compensation Table.(1) | | The amount reported under Aggregate Withdrawals/Distributions in 2018 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) | | The amount reported under Aggregate Balance at December 31, 2018 shows the non-qualified deferred compensation account balance at the end of 2018. For reference, Eric’s previously reported Aggregate Balance at December 31, 2017 in the 2018 proxy statement was $29,643,886 and Sundar’s previously reported Aggregate Balance at December 31, 2017 in the 2018 proxy statement was $4,425,884.(3) |
Non-Qualified Deferred Compensation Plan
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 2018, 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 45 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’s total compensation to that of Alphabet’s median employee for the year ended December 31, 2018.
ALPHABET CEO PAY RATIO
| Chief Executive Officer total annual compensation | $1 | | Median Employee total annual compensation | $246,804 | | Ratio of Chief Executive Officer to Median Employee total annual compensation | 1:246,804 or 0.000004 |
ALPHABET CEO PAY RATIO
In 2017, we granted half-size transitional equity awards to align our equity compensation cycle to the calendar year. In 2018, we resumed granting full-size equity awards, resulting in a year-over-year increase in the median employee total annual compensation. To determine the median employee compensation, we analyzed all of Alphabet’s employees, excluding Alphabet’s Chief Executive Officer, as of December 31, 2018. 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 47.