DEF 14A of Alphabet Inc.
Filed Apr 21, 2023 · FY20220001308179-23-000736
Our Director Nominees
Our Director Nominees The following table provides summary information about each director nominee as of April 4, 2023.
Our Director Nominees
| | | Director Since | | Membership on Standing Committees | | | | Other Public Boards(1) | | Name | Age | | Independent | ACC | LDICC | NCGC | EC | | | Larry Page Co-Founder | 50 | 1998 | | | | | | 0 | | Sergey Brin Co-Founder | 49 | 1998 | | | | | | 0 | | Sundar Pichai Chief Executive Officer, Alphabet and Google | 50 | 2017 | | | | | | 0 | | John L. Hennessy (Chair) Former President of Stanford University | 70 | 2004 | | | | | | 0 | | Frances H. Arnold Linus Pauling Professor of Chemical Engineering, Bioengineering and Biochemistry at California Institute of Technology | 66 | 2019 | | | | | | 1 | | R. Martin “Marty” Chávez Partner and Vice Chairman of Sixth Street Partners | 59 | 2022 | | | | | | 1 | | L. John Doerr General Partner and Chairman of Kleiner Perkins | 71 | 1999 | | | | | | 2 | | Roger W. Ferguson Jr. Former President and Chief Executive Officer of TIAA | 71 | 2016 | | | | | | 2 | | Ann Mather Former Executive Vice President and Chief Financial Officer of Pixar | 62 | 2005 | | | | | | 3 | | K. Ram Shriram Managing Partner of Sherpalo Ventures | 66 | 1998 | | | | | | 0 | | Robin L. Washington Former Executive Vice President and Chief Financial Officer of Gilead Sciences | 60 | 2019 | | | | | | 3 |
Our Director Nominees
| ACC | Audit and Compliance Committee | | LDICC | Leadership Development, Inclusion and Compensation Committee | | NCGC | Nominating and Corporate Governance Committee | | EC | Executive Committee | | | Committee Chair | | | Audit Committee Financial Expert | | (1) | Alphabet’s Corporate Governance Guidelines provide that the maximum number of public company boards our directors can serve on is four, including membership on the Alphabet Board. All nominees are in compliance with this policy. |
— DIRECTORS AND EXECUTIVE OFFICERS
— DIRECTORS AND EXECUTIVE OFFICERS Our Board of Directors (our Board) is composed of highly experienced and diverse directors who have led, advised, and established leading global organizations and institutions. Our Board has taken a thoughtful approach to board composition to ensure that our directors have backgrounds that collectively add significant value to the strategic decisions made by the company and that enable them to provide oversight of management to ensure accountability to our stockholders. Our Board has endeavored to strike the right balance between long-term understanding of our business and fresh external perspectives, adding five new directors in the past seven years, as well as ensuring the diversity of backgrounds and perspectives within the boardroom. Our directors have extensive backgrounds as entrepreneurs, technologists, operational and financial experts, academics, scientists, investors, advisors, nonprofit board members, and government leaders — all of which provide skills and expertise directly relevant to our strategic and oversight priorities. Many of the current directors have senior leadership experience at major domestic and international companies. In these positions, they have also gained experience in core management skills, such as strategic and financial planning, public company financial reporting, compliance, risk management, leadership development, and international business experience. Most of our directors also have experience serving on boards of directors and board committees of other public companies, and have an understanding of corporate governance practices and trends, different business processes, challenges, and strategies. Other directors have experience as presidents or trustees of significant academic, research, and philanthropic institutions, which brings unique perspectives in relevant disciplines and institutional leadership to our Board. Further, our directors also have other experience that makes them valuable members, such as entrepreneurial experience and experience developing technology or managing technology companies, which provides insight into strategic and operational issues we face. The demographic information presented below for our directors is based on voluntary self-identification by each director. Additional biographical information of our directors and executive officers as of April 4, 2023 is set forth starting on page 23.
— DIRECTORS AND EXECUTIVE OFFICERS
| | Page | Brin | Pichai | Hennessy | Arnold | Chávez | Doerr | Ferguson | Mather | Shriram | Washington | | Gender Identity | | | | | | | | | | | | | Male | | | | | | | | | | | | | Female | | | | | | | | | | | | | Race/Ethnicity | | | | | | | | | | | | | African American or Black | | | | | | | | | | | | | Asian | | | | | | | | | | | | | Hispanic | | | | | | | | | | | | | White | | | | | | | | | | | | | LGBTQ+ | | | | | | | | | | | |
— DIRECTORS AND EXECUTIVE OFFICERS
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
Directors
Directors
Directors
| LARRY PAGE Co-Founder Director since 1998 | Executive Committee (Chair) | | | Selected Membership: ● The Carl Victor Page Memorial Foundation | Larry Page, 50, one of Google’s Co-Founders, previously served as Google’s Chief Executive Officer from April 2011 to October 2015, and as Alphabet’s Chief Executive Officer from October 2015 to December 2019. 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 Bachelor of Science degree in engineering, with a concentration in computer engineering, from the University of Michigan and a Master of Science degree in computer science from Stanford University. Select Leadership Skills and Additional Experiences: ● Business leadership, operational experience, and experience developing technology as Co-Founder of Google and former Chief Executive Officer of Alphabet. ● In-depth knowledge of the technology sector and experience in developing transformative business models. | | SERGEY BRIN Co-Founder Director since 1998 | Executive Committee | | | Selected Membership: ● The Sergey Brin Family Foundation | Sergey Brin, 49, one of Google’s Co-Founders, previously served as Google’s President from May 2011 to October 2015, and as Alphabet’s President from October 2015 to December 2019. From July 2001 to April 2011, 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 Bachelor of Science degree with high honors in mathematics and computer science from the University of Maryland at College Park and a Master of Science degree in computer science from Stanford University. Select Leadership Skills and Additional Experiences: ● Business leadership, operational experience, and experience developing technology as Co-Founder of Google and former President of Alphabet. ● In-depth knowledge of the technology sector and experience in developing transformative business models. | | SUNDAR PICHAI Chief Executive Officer, Alphabet and Google Director since 2017 | Executive Committee | | | Selected Membership: ● The Pichai Family Foundation | Sundar Pichai, 50, has been the Chief Executive Officer of Alphabet since December 2019 and of Google since October 2015. Since joining Google in 2004, Sundar has led product and engineering for Google’s products and platforms, including Search, Chrome, Maps, Android, Gmail, and Google Apps (now Google Workspace). Sundar served as Google’s Senior Vice President of Products from October 2014 to October 2015, and as Google’s Senior Vice President of Android, Chrome and Apps from March 2013 to October 2014. As CEO, he has shifted the company’s strategy to focus on AI, which is now powering advances in the company’s founding product, Search, as well as other helpful products for people around the world. Sundar holds a Bachelor of Technology degree from the Indian Institute of Technology Kharagpur, a Master of Science degree from Stanford University, and a Master of Business Administration degree from The Wharton School of the University of Pennsylvania. Select Leadership Skills and Additional Experiences: ● Business leadership, operational experience, and experience developing technology as Chief Executive Officer of Alphabet and Google. ● In-depth knowledge of the technology sector, and experience in developing Alphabet and Google’s products and services and leading the company’s strategic vision, management, and operations. |
Directors
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
Directors
| JOHN L. HENNESSY Chair of the Board Independent Director since 2004 | Nominating and Corporate Governance Committee (Chair) | | | Selected Memberships and Private Directorships: ● Board of Trustees, Gordon and Betty Moore Foundation ● Board of Directors, Chan Zuckerberg Biohub ● Trustee, Queen Elizabeth Prize for Engineering Foundation Former Public Company Directorship in the Past Five Years: ● Cisco Systems, Inc | John L. Hennessy, 70, has served as Chair of our Board since January 2018. John previously served as our Lead Independent Director from April 2007 to January 2018. John is the James F. and Mary Lynn Gibbons Professor of Computer Science and Electrical Engineering in the Stanford School of Engineering, and the Shriram Family Director of Stanford’s Knight-Hennessy Scholars, a graduate-level scholarship program. John served as the President of Stanford University from September 2000 to August 2016. 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 Bachelor of Science degree in electrical engineering from Villanova University and a Master of Science degree and a Doctoral degree in computer science from the State University of New York, Stony Brook. Select Leadership Skills and Additional Experiences: ● Leadership and management experience as a former president of a world-renowned university. ● Experience developing technology businesses as founder of MIPS Technologies, Inc. and chief architect of Silicon Graphics Computer Systems, Inc. ● Global business perspective from his service on other boards. | | FRANCES H. ARNOLD Independent Director since 2019 | Nominating and Corporate Governance Committee | | | Other Public Company Directorship: ● Illumina, Inc. Selected Memberships: ● Co-Chair, President’s Council of Advisors on Science and Technology ● Member, U.S. National Academies of Science, Medicine, and Engineering ● Member, The American Academy of Arts and Sciences | Frances H. Arnold, 66, manages a research group, is the Linus Pauling Professor of Chemical Engineering, Bioengineering and Biochemistry, and is the Director of the Donna and Benjamin M. Rosen Bioengineering Center, all at the California Institute of Technology. She joined the California Institute of Technology in 1986 and has served as a Visiting Associate, Assistant Professor, Professor, and Director. Frances’s laboratory focuses on protein engineering by directed evolution, with applications in alternative energy, chemicals, and medicine. Frances is the recipient of numerous honors, including the Nobel Prize in Chemistry, the Millennium Technology Prize, induction into the National Inventors Hall of Fame, Fellow of the National Academy of Inventors, the ENI Prize in Renewable and Nonconventional Energy, the U.S. National Medal of Technology and Innovation, and the Charles Stark Draper Prize of the U.S. National Academy of Engineering. Frances holds a Bachelor of Science degree in mechanical and aerospace engineering from Princeton University and a Doctoral degree in chemical engineering from the University of California, Berkeley. Select Leadership Skills and Additional Experiences: ● Leadership and management experience managing a research group at the California Institute of Technology and co-chair of the President’s Council of Advisors on Science and Technology. ● Recipient of the 2018 Nobel Prize for Chemistry for her work on directed evolution of enzymes. ● Global business perspective from her service on other boards. | | R. MARTIN “MARTY” CHÁVEZ Independent Director since 2022 | Audit and Compliance Committee | | | Other Public Company Directorship: ● Recursion Pharmaceuticals, Inc. Selected Memberships: ● Board of Fellows, Stanford Medicine Board ● Board of Directors, The Broad Institute of MIT Former Public Company Directorship in the Past Five Years: ● Banco Santander, S.A. | R. Martin “Marty” Chávez, 59, has been a Partner and Vice Chairman of Sixth Street, a global asset manager, since May 2021. From January 2005 to December 2019, he served in a number of executive positions at Goldman Sachs, including Chief Information Officer, Chief Financial Officer, and global co-head of the firm’s Securities Division, and was a partner and a member of Goldman Sachs’ management committee. Previously, Marty was a Chief Executive Officer and co-founder of Kiodex, which was acquired by Sungard in 2004, and Chief Technology Officer and co-founder of Quorum Software Systems. Marty holds a Bachelor of Arts degree in biochemical sciences and a Master of Science degree in computer science from Harvard University, and a Doctoral degree in medical information sciences from Stanford University. Select Leadership Skills and Additional Experiences: ● Extensive financial and management expertise and global business leadership as Partner and Vice Chairman of Sixth Street and former Chief Financial Officer of Goldman Sachs. ● In-depth knowledge of the technology sector. ● Global business perspective from his service on other boards. |
Directors
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
Directors
| L. JOHN DOERR Independent Director since 1999 | Leadership Development, Inclusion and Compensation Committee | | | Other Public Company Directorships: ● Amyris, Inc. ● DoorDash, Inc. Selected Memberships: ● Board of Trustees, The Aspen Institute ● Board of Directors, Climate Imperative Former Public Company Directorships in the Past Five Years: ● Bloom Energy Corporation ● Coursera, Inc. ● Quantumscape Corporation ● Zynga, Inc. | L. John Doerr, 71, has been a General Partner of Kleiner Perkins, a venture capital firm, since August 1980. John holds a Bachelor of Science degree in electrical engineering and a Master of Science degree in electrical engineering from Rice University, and a Master of Business Administration degree from Harvard Business School. Select Leadership Skills and Additional Experiences: ● Global business leadership and extensive financial and investment expertise as a venture capitalist. ● In-depth knowledge of the technology sector and visionary in the industry. ● Global business perspective from his service on other boards. | | ROGER W. FERGUSON JR. Independent Director since 2016 | Audit and Compliance Committee | | | Other Public Company Directorships: ● Corning ● International Flavors & Fragrances, Inc. Selected Memberships: ● Board of Regents, The Smithsonian Institution ● Member and Co-Chair of the Commission on the Future of Undergraduate Education, American Academy of Arts and Sciences ● Board of Trustees: The Conference Board; The Group of Thirty; The National September 11th Museum and Memorial Former Public Company Directorships in the Past Five Years: ● Blend Labs, Inc. ● General Mills, Inc. | Roger W. Ferguson Jr., 71, has been the Chief Investment Officer of Red Cell Partners LLC, a venture capital firm, since August 2022. He is also the Steven A. Tananbaum distinguished fellow at the Council on Foreign Relations. Roger has served as the President and Chief Executive Officer of TIAA, a major financial services company, from April 2008 to May 2021. 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 holds a Bachelor of Arts degree in economics, a Doctoral degree in economics, and a Juris Doctor degree, all from Harvard University. Select Leadership Skills and Additional Experiences: ● Global business leadership and extensive financial, capital markets, and management expertise as former President and Chief Executive Officer of TIAA. ● Extensive experience in management consulting and various policy-making roles. ● Global business perspective from his service on other boards. |
Directors
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
Directors
| ANN MATHER Independent Director since 2005 | Audit and Compliance Committee (Chair) | | | Other Public Company Directorships: ● Blend Labs, Inc. ● Bumble Inc. ● Netflix, Inc. Selected Memberships: ● Board of Trustees, Dodge & Cox Funds Former Public Company Directorships in the Past Five Years: ● Airbnb, Inc. ● Arista Networks, Inc. ● Glu Mobile, Inc. ● Planet Labs Inc. ● Shutterfly, Inc. | Ann Mather, 62, was Executive Vice President and Chief Financial Officer of Pixar, a computer animation film studio, from 1999 to 2004. 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. Select Leadership Skills and Additional Experiences: ● Deemed an “audit committee financial expert” with over 20 years of experience in finance and operations of technology companies, particularly publicly traded companies with knowledge of complex global financial and business matters. ● Global business leadership and extensive financial experience as a former chief financial officer and senior finance executive of major corporations. ● Global business perspective from her service on other boards. | | K. RAM SHRIRAM Independent Director since 1998 | Leadership Development, Inclusion and Compensation Committee | | | Selected Memberships: ● Member, Council on Foreign Relations ● Board of Trustees, Stanford Health Care ● Charter Member, Indiaspora | K. Ram Shriram, 66, 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 internet retail 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 holds a Bachelor of Science degree in mathematics from the University of Madras, India. Select Leadership Skills and Additional Experiences: ● Global business leadership as former Vice President of Business Development at Amazon.com, Inc., President of Junglee Corporation, and a member of the executive team of Netscape Communications Corporation. ● Extensive financial and investment expertise as a venture capitalist. ● Outside board experience as a director of several private companies. | | ROBIN L. WASHINGTON Independent Director since 2019 | Leadership Development, Inclusion and Compensation Committee (Chair) | | | Other Public Company Directorships: ● Honeywell International, Inc. ● Salesforce, Inc. ● Vertiv Holdings Co. Selected Memberships and Private Directorships: ● President’s Council & Ross Business School Advisory Board, University of Michigan ● Board of Trustees, UCSF Benioff Children’s Hospital Oakland ● Board of Directors, Mastercard Foundation | Robin L. Washington, 60, served as the Executive Vice President and Chief Financial Officer of Gilead Sciences, Inc., a biopharmaceutical company, from May 2008 to November 2019 where she oversaw Global Finance, Facilities and Operations, Investor Relations, and the Information Technology organizations. Robin remained with Gilead in an advisory capacity from November 2019 until March 2020. 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, including as Senior Vice President and Corporate Controller along with several other senior financial roles from 1996 to 2005. Prior to PeopleSoft, Robin was Director of Finance for Tandem Computers, an Accounting Analyst for the Federal Reserve Bank of Chicago, and a Senior Auditor for Deloitte. Robin holds a Bachelor of Business Administration degree from the University of Michigan and a Master of Business Administration degree from Pepperdine University. Select Leadership Skills and Additional Experiences: ● Extensive financial and management expertise and global business leadership as former Executive Vice President and Chief Financial Officer of Gilead Sciences, Inc., Hyperion Solutions Corporation, and former executive of PeopleSoft, Inc. ● In-depth knowledge of the technology sector. ● Global business perspective from her service on other boards. |
Directors
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
Consideration of Director Nominees
Consideration of Director Nominees
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
— DIRECTOR COMPENSATION FOR 2022
— DIRECTOR COMPENSATION FOR 2022 The following table summarizes compensation earned by our directors other than Sundar during 2022.
— DIRECTOR COMPENSATION FOR 2022
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | | Frances H. Arnold(2) | 75,000 | 359,455 | — | 434,455 | | R. Martin “Marty” Chávez(3) | — | 1,048,115 | — | 1,048,115 | | Sergey Brin(4) | — | — | 1 | 1 | | L. John Doerr(5) | 75,000 | 359,455 | — | 434,455 | | Roger W. Ferguson Jr.(5) | 75,000 | 359,455 | — | 434,455 | | John L. Hennessy(6) | 100,000 | 511,532 | — | 611,532 | | Ann Mather(5) | 100,000 | 359,455 | — | 459,455 | | Alan R. Mulally(7) | 75,000 | — | — | 75,000 | | Larry Page(4) | — | — | 1 | 1 | | K. Ram Shriram(5) | 75,000 | 359,455 | — | 434,455 | | Robin L. Washington(8) | 75,000 | 359,455 | — | 434,455 |
— DIRECTOR COMPENSATION FOR 2022
| (1) The amounts reported in the Stock Awards column reflect the aggregate grant date fair value of GSUs granted to our non-employee directors in 2022 calculated in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 (Compensation – Stock Compensation). The grant date fair value of each GSU award is measured based on the closing price of Alphabet’s Class C capital stock on the date of grant. The grant date fair value of GSUs granted to the non-employee directors on July 6, 2022 (the GSU grant following the 2022 Annual Meeting of Stockholders) was $115.21 per share. The grant date fair value of GSUs granted to Marty on August 3, 2022 was $118.78 per share. | | (2) On December 31, 2022, there were 9,340 Class C GSUs outstanding for Frances. | | (3) On December 31, 2022, there were 8,824 Class C GSUs outstanding for Marty. | | (4) Co-Founders Larry and Sergey serve as employee directors and do not receive any compensation for their services as members of our Board. Their “All Other Compensation” reflects an annual employee salary of $1. | | (5) On December 31, 2022, there were 7,140 Class C GSUs outstanding for John Doerr, Roger, Ann, and Ram. | | (6) On December 31, 2022, there were 10,180 Class C GSUs outstanding for John Hennessy. | | (7) Alan’s term as a member of our Board and the Audit Committee ended on June 2, 2022. | | (8) On December 31, 2022, there were 8,220 Class C GSUs outstanding for Robin. |
— DIRECTOR COMPENSATION FOR 2022
| | EXECUTIVE COMPENSATION TABLE OF CONTENTS |
— DIRECTOR COMPENSATION FOR 2022
| THE CD&A IS ORGANIZED INTO FOUR SECTIONS: | | | SECTION 1—EXECUTIVE SUMMARY | 46 | | SECTION 2—DETERMINING COMPETITIVE LEVELS OF PAY | 47 | | SECTION 3—ELEMENTS OF PAY AND FISCAL YEAR 2022 PAY DECISIONS | 47 | | SECTION 4—OTHER COMPENSATION INFORMATION | 51 |
Section 2—Determining Competitive Levels of Pay
Section 2—Determining Competitive Levels of Pay Our executive compensation decisions are informed by competitive 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. Each year, we review our peer group and our evaluation criteria. For 2022, we determined our peer group by evaluating potential peer companies against the following criteria:
Section 2—Determining Competitive Levels of Pay
Committee selected the following peer companies for 2022 (which were the same peer companies our Compensation Committee used for 2021):
Compensation Consultants
Compensation Consultants The Compensation Committee directly engaged both Compensia Inc. and Semler Brossy Consulting Group LLC as independent compensation consultants in 2022. The consulting firms provide input, analysis, and guidance on Alphabet and Google’s executive compensation, peer groups, compensation design, equity usage and allocation, risk assessment, and human capital management. Both firms report directly to the Compensation Committee rather than to management, and the firms provided no services to Alphabet other than those in support of the Compensation Committee. The Compensation Committee has evaluated the independence of both consultants and concluded that their work does not raise any conflicts of interest.
Environmental, Social, and Governance Bonus
Environmental, Social, and Governance Bonus In January 2022, we adopted an Environmental, Social, and Governance Bonus (ESG Bonus) for members of Alphabet’s senior executive team, including our named executive officers Ruth, Prabhakar, Philipp, and Kent (ESG Participants). The ESG Bonus provides individual participants with a maximum $2.0 million annual cash bonus opportunity, based on contributions to the company’s performance against environmental and social goals. The ESG Bonus consists of two components – Environmental and Social – each with a maximum potential payout of $1.0 million. The Compensation Committee is responsible for determining payout of the ESG Bonus for each ESG Participant, in conjunction with the CEO’s review of company-wide performance and individual contributions made by each ESG Participant. For the Environmental component, key accomplishments include progress toward advancing carbon-free energy across our global operations – as of 2022, we achieved five consecutive years of 100% renewable energy annual matching(1). We also took steps to drive net-positive impact through user engagement with Google technologies, platforms, products, and services. For the Social component in 2022, key accomplishments include progress toward our DEI goals, including our 2020 Racial Equity Commitments. We also took concrete steps to foster a culture of belonging, which helps us better design and build products with everyone in mind. For more information on how we are progressing toward our Environmental and Social goals, please see our most recent Environmental Report and Diversity Annual Report. To acknowledge the central role each ESG Participant played, both as individuals and as a group, in advancing progress toward Alphabet’s Environmental and Social goals as outlined above, the Compensation Committee decided to align the amounts of the 2022 ESG Bonus payouts for all four individuals. Based on the strong Google and individual performance against ESG goals in 2022, the Compensation Committee initially proposed a bonus amount of $1.55 million for each ESG Participant. However, in light of macroeconomic conditions, the Compensation Committee decided to reduce ESG Bonus payouts for the ESG Participants by 50%. As a result, each individual’s 2022 ESG Bonus payout is $775,000. While both the Compensation Committee and the ESG Participants recognize each ESG Participant’s strong individual performance against ESG goals in 2022, each ESG Participant also encouraged the Compensation Committee’s decision, in its sole discretion, to adjust ESG bonuses downward in order to reflect macroeconomic conditions.
Equity Awards
Equity Awards We grant equity awards to our named executive officers to reinforce management’s focus on long-term stockholder value and commitment to the company. The Compensation Committee regularly evaluates the structure of these equity awards to ensure the right balance of time- and performance-based equity that supports the objectives of our compensation philosophy, aligns with our business priorities, and considers the perspectives of our stockholders. The Compensation Committee utilizes a combination of GSUs and performance stock units (PSUs) to award our named executive officers. To determine individual grant values and the proportion of GSUs and PSUs, the Compensation Committee considers the following elements:
Equity Awards
| ● | Market compensation values and practices for performance-based equity awards, including peers and S&P 100 companies. | | ● | Alphabet’s overall business performance, and the scope of role, impact, and performance of each recipient. | | ● | Each recipient’s outstanding and unvested equity awards, and the vesting schedules of those awards. | | ● | The resulting compensation at target and maximum performance values for each recipient. |
Equity Awards
| 1 | Alphabet’s renewable energy methodology is a custom calculation and is based on a global approach. The numerator includes all renewable energy procured, regardless of the market in which the renewable energy was consumed. Additional details on Alphabet’s criteria and methodology can be found in the Achieving Our 100% Renewable Energy Purchasing Goal and Going Beyond disclosure. |
Equity Awards
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
Equity Awards
Based on the above criteria, in 2022, the Compensation Committee determined to grant the following equity awards for each of our named executive officers. See the sections below and the “Grants of Plan-Based Awards in 2022” table on page 54 for further details on the awards’ performance criteria and vesting.
Equity Awards
| Named Executive | Number of GSUs Granted | Target GSU Award Value ($) | Number of PSUs Granted(1) | Target PSU Award Value ($) | Aggregate Target Award Value ($) | Grant Cadence | | Sundar Pichai | 892,573(1) | 84,000,000 | 1,338,859 | 126,000,000 | 210,000,000 | Triennial | | Ruth M. Porat | 123,600(2) | 18,000,000 | 34,340 | 5,000,000 | 23,000,000 | Annual | | Prabhakar Raghavan | 157,920(2) | 23,000,000 | 82,400 | 12,000,000 | 35,000,000 | Annual | | Philipp Schindler | 157,920(2) | 23,000,000 | 82,400 | 12,000,000 | 35,000,000 | Annual | | Kent Walker | 123,600(2) | 18,000,000 | 34,340 | 5,000,000 | 23,000,000 | Annual |
Equity Awards
| (1) The exact number of GSUs and PSUs comprising the equity awards was calculated by dividing the target dollar value of the award by the average closing price of Alphabet’s Class C capital stock during the month of November 2022 ($94.11 per share), rounded up to the nearest whole share. | | (2) The exact number of GSUs and PSUs comprising the equity awards was calculated by dividing the target dollar value of the award by the average closing price of Alphabet’s Class C capital stock during the month of December 2021 ($145.65 per share), rounded up to the nearest whole share. |
2022 CEO Equity Award for Sundar
2022 CEO Equity Award for Sundar The Compensation Committee currently follows a triennial grant cadence for CEO equity awards. Sundar’s last equity award was granted in December 2019, and fully vested at the end of December 2022. In December 2022, the Compensation Committee granted a new equity award to Sundar to recognize his strong performance as our CEO. As with the 2019 award, the 2022 award consisted of both GSUs and PSUs. The on-target value of the award was unchanged from the 2019 award. However, relative to the 2019 award, the Compensation Committee made two design changes such that more of the award’s vesting is dependent on performance: (1) increased the proportion of PSUs to 60% of the total award from 43%; and (2) increased the performance requirement for on-target PSU payout to the 55th percentile from the 50th percentile of Alphabet’s relative total shareholder return (TSR). These changes further align Sundar’s compensation to long-term shareholder value creation and Alphabet’s stock performance relative to the S&P 100 over the applicable performance periods. The GSU portion of the award vests quarterly over three years in 12 equal installments beginning March 25, 2023. The PSU portion of the award includes two tranches. The PSUs will vest, if at all, based on Alphabet’s TSR performance relative to the companies comprising the S&P 100 over a 2023-2024 performance period for the first tranche (2022 Tranche A) and over a 2023-2025 performance period for the second tranche (2022 Tranche B), subject to continued employment on each applicable vesting date. The number of PSUs vesting will be determined after the end of each performance period based on the payout curve illustrated below. Depending upon performance, the number of PSUs that vest will range from 0%-200% of the target number of PSUs. Upon vesting, each PSU and GSU will entitle Sundar to receive one share of Alphabet’s Class C capital stock.
2022 CEO Equity Award for Sundar
| (1) The number of PSUs vesting will be determined by linear interpolation for relative TSR ranks between the 25th and 55th percentile and between the 55th and 75th percentile. |
2022 CEO Equity Award for Sundar
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
2019 Tranche B PSU Award Vest for Sundar
2019 Tranche B PSU Award Vest for Sundar The performance period for the second tranche (2019 Tranche B) of the PSUs awarded to Sundar in December 2019 ended on December 31, 2022. Sundar’s 2019 Tranche B award provided that if the TSR performance of Alphabet relative to companies comprising the S&P 100 was between the 50th percentile (for 100% payout) and the 75th percentile (for the maximum 200% payout) for the three-year performance period ending December 31, 2022, the PSU payout would be determined by linear interpolation. Alphabet’s TSR for the three-year performance period was 47.53%, which ranked Alphabet’s TSR at the 73.20th percentile. On January 5, 2023, Sundar earned 192.78% of his target PSU award (for a total of 1,330,260 shares of Class C capital stock) upon the certification by the Compensation Committee based on the satisfaction of the performance criteria underlying the award.
2022 Equity Awards for Ruth, Prabhakar, Philipp, and Kent
2022 Equity Awards for Ruth, Prabhakar, Philipp, and Kent In January 2022, the Compensation Committee granted a combination of GSUs and PSUs to our named executive officers, Ruth, Prabhakar, Philipp, and Kent, as part of our annual equity award structure. The 2022 equity awards are the conclusion of a multi-year transition from the previous compensation structure of biennial GSU awards that vested over a four-year period to our current structure of annual awards divided into GSUs and PSUs that each vest over a three-year period. The GSU awards vest quarterly over three years in equal installments beginning March 25, 2022. The PSU awards will vest, if at all, on December 31, 2024, based on Alphabet’s TSR performance relative to the companies comprising the S&P 100 over a 2022-2024 performance period, subject to continued employment on the vesting date. The payout structure and time period of these PSUs mirror the structure of the three-year performance period PSUs granted to Sundar in 2019. The number of PSUs vesting will be determined after the end of the performance period based on the payout curve illustrated below. Depending upon performance, the number of PSUs that vest will range from 0%-200% of the target number of PSUs. Upon vesting, each PSU and GSU will entitle the recipient to receive one share of Alphabet’s Class C capital stock.
2022 Equity Awards for Ruth, Prabhakar, Philipp, and Kent
| (1) The number of PSUs vesting will be determined by linear interpolation for relative TSR ranks between the 25th and 50th percentile and between the 50th and 75th percentile. |
2023 Equity Awards for Ruth, Prabhakar, Philipp, and Kent
2023 Equity Awards for Ruth, Prabhakar, Philipp, and Kent In April 2023, the Compensation Committee approved annual equity awards (GSUs and PSUs) to our named executive officers Ruth, Prabhakar, Philipp, and Kent. The awards will be granted on May 3, 2023. The GSUs vest quarterly from May 2023 through December 2025. The PSUs will vest, if at all, based on the TSR performance of Alphabet relative to the companies comprising the S&P 100 over a 2023-2025 performance period, subject to continued employment on the vesting date. Depending upon performance, the number of PSUs that vest will range from 0%-200% of target. Upon vesting, each GSU and PSU will entitle the grantee to receive one share of Alphabet’s Class C capital stock.
2023 Equity Awards for Ruth, Prabhakar, Philipp, and Kent
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
Risk Considerations
Risk Considerations The Compensation Committee reviews our compensation programs continuously throughout the year to assess and mitigate against material risks. In addition, in January 2023, the Compensation Committee reviewed a comprehensive evaluation conducted by Alphabet management of all our 2022 compensation programs and concluded that these programs do not create risks that are reasonably likely to have a material adverse effect on the company. The 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 Compensation Committee believes that the following risk oversight and compensation design features safeguard against excessive risk-taking:
Risk Considerations
| ● | Our Board as a whole has responsibility for risk oversight and regularly reviews reports on the deliberations of its committees. In addition, our Board reviews the strategic, financial, and execution risks and exposures associated with the financial, operational, and capital decisions that serve as inputs to our compensation programs. | | ● | Through discussions with management, the Compensation Committee gains insight into a reasonable range of future company performance expectations. This information is incorporated into decisions regarding the compensation of our named executive officers. | | ● | The majority of compensation provided to our named executive officers is delivered through equity awards, with payout based on long-term company performance. Our GSUs awards vest over a long-term period, and our PSUs awards are earned based on company performance. As the compensation of our named executive officers is tied to long-term performance, their interests are closely aligned with our stockholders’ interests and they are motivated to carefully assess risks to the company to protect their compensation. | | ● | 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 and performance goals that promote focus on long-term interests rather than only short-term results and create compelling incentives for executive retention. | | ● | Our named executive officers are subject to, and are in compliance with, Alphabet’s minimum stock ownership requirements (detailed in the Minimum Stock Ownership Requirements section below). This ensures that each named executive officer will hold a certain 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, short-term 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 equity awards to employees, members of our Board, and non-employee advisors is typically the first non-holiday Wednesday of the month following the date on which the equity award is approved by the Compensation Committee, unless otherwise specified by our Board or the Compensation Committee. The Compensation Committee does not grant equity 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.
— 2022 SUMMARY COMPENSATION TABLE
— 2022 SUMMARY COMPENSATION TABLE The following table sets forth information regarding the compensation paid to, or earned or received by, our named executive officers for the fiscal years ended December 31, 2022, 2021, and 2020.
— 2022 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation ($)(4) | Total ($) | | Sundar Pichai Chief Executive Officer, Alphabet and Google, and Director | 2022 | 2,000,000 | 218,037,684(5) | — | 5,947,461(10) | 225,985,145 | | | 2021 | 2,000,000 | — | — | 4,322,599 | 6,322,599 | | | 2020 | 2,000,000 | — | — | 5,410,162 | 7,410,162 | | Ruth M. Porat Senior Vice President, Chief Financial Officer, Alphabet and Google | 2022 | 1,000,000 | 22,663,723(6) | 775,000 | 15,046 | 24,453,769 | | | 2021 | 650,000 | 13,995,065(7) | — | 17,411 | 14,662,476 | | | 2020 | 650,000 | 50,217,913 | — | 17,770 | 50,885,683 | | Prabhakar Raghavan Senior Vice President, Knowledge and Information, Google | 2022 | 1,000,000 | 35,295,496(8) | 775,000 | 10,329 | 37,080,824 | | | 2021 | 650,000 | 27,984,366(9) | — | 13,643 | 28,648,009 | | | 2020 | 650,000 | 54,585,860 | — | 9,750 | 55,245,610 | | Philipp Schindler Senior Vice President, Chief Business Officer, Google | 2022 | 1,000,000 | 35,295,496(8) | 775,000 | 10,814 | 37,081,309 | | | 2021 | 650,000 | 27,984,366(9) | — | 27,617 | 28,661,983 | | | 2020 | 650,000 | 65,501,684 | — | 226,816 | 66,378,500 | | Kent Walker President, Global Affairs, Chief Legal Officer, and Secretary, Alphabet and Google | 2022 | 1,000,000 | 22,663,723(6) | 775,000 | 12,541 | 24,451,264 | | | 2021 | 650,000 | 13,995,065(7) | — | 12,697 | 14,657,762 | | | 2020 | 650,000 | 50,217,913 | — | 9,750 | 50,877,663 |
— 2022 SUMMARY COMPENSATION TABLE
| (1) Salaries reflect each named executive officer’s stated annual salary for the relevant fiscal year. Salaries include amounts deferred pursuant to Section 401(k) of the Internal Revenue Code. | | (2) Amounts reflect the aggregate grant date fair value of GSUs and PSUs computed in accordance with FASB ASC Topic 718 and are not necessarily an indication of the value that will be realized if and when vesting occurs. The grant date fair value of each GSU award is measured based on the closing price of Alphabet’s Class C capital stock on the date of grant. The grant date fair value of each PSU award is measured using a Monte Carlo simulation model as PSUs contain a market condition at the time of grant (as calculated in accordance with FASB ASC Topic 718 and SEC Staff Accounting Bulletin Topic 14). The Monte Carlo simulation model for the PSUs assumes that the stock prices of Alphabet and the peer firms follow a correlated geometric Brownian motion. Under this model, the daily stock prices for Alphabet and peer firms were simulated over the remaining performance period using volatilities and correlations calculated from daily stock returns over a lookback term from the grant date. The valuation was done under a risk-neutral framework using the term-matched zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the grant date. | | (3) As described under the “Environmental, Social, and Governance Bonus” section, these amounts reflect ESG bonus awards paid out on March 10, 2023 for performance in 2022. | | (4) Generally consists of our 401(k) plan or Roth plan company match of up to $10,250 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) The grant date fair value of the GSU award, $79,572,883, is measured based on the closing price of Alphabet’s Class C capital stock on the date of grant. The grant date fair value of the PSU award, $138,464,801, is measured using a Monte Carlo simulation model as PSUs contain a market condition at the time of grant. Assuming the maximum achievement of the TSR performance goals, the aggregate market value of the PSUs on the date of grant would be $238,718,560. See “Equity Awards” under Section 3 of the CD&A and the “Grants of Plan-Based Awards in 2022” table for details on the GSUs and PSUs awarded. | | (6) The grant date fair value of the GSU award, $17,013,540, is measured based on the closing price of Alphabet’s Class C capital stock on the date of grant. The grant date fair value of the PSU award, $5,650,183, is measured using a Monte Carlo simulation model as PSUs contain a market condition at the time of grant. Assuming the maximum achievement of the TSR performance goals, the aggregate market value of the PSUs on the date of grant would be $9,453,802. See “Equity Awards” under Section 3 of the CD&A and the “Grants of Plan-Based Awards in 2022” table for details on the GSUs and PSUs awarded. | | (7) Assuming the maximum achievement of the TSR performance goals, the aggregate market value of the 2021 PSUs on the date of grant would be $10,924,058. | | (8) The grant date fair value of the GSU award, $21,737,688, is measured based on the closing price of Alphabet’s Class C capital stock on the date of grant. The grant date fair value of the PSU award, $13,557,808, is measured using a Monte Carlo simulation model as PSUs contain a market condition at the time of grant. Assuming the maximum achievement of the TSR performance goals, the aggregate market value of the PSUs on the date of grant would be $22,684,720. See “Equity Awards” under Section 3 of the CD&A and the “Grants of Plan-Based Awards in 2022” table for details on the GSUs and PSUs awarded. | | (9) Assuming the maximum achievement of the TSR performance goals, the aggregate market value of the 2021 PSUs on the date of grant would be $21,843,616. | | (10) Includes $5,935,084 for personal security. |
— 2022 SUMMARY COMPENSATION TABLE
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
— GRANTS OF PLAN-BASED AWARDS IN 2022
— GRANTS OF PLAN-BASED AWARDS IN 2022 The following table provides information regarding the equity awards granted in 2022 to our named executive officers.
— GRANTS OF PLAN-BASED AWARDS IN 2022
| | | | Estimated Future Payouts under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | Equity Grants | | | Name | Grant Date | Date of Approval of Equity Awards by Committee | Threshold | Target | Maximum | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(2) | | Sundar Pichai | 12/19/2022 | 12/19/2022 | | | | — | — | — | 892,573(3) | 79,572,883 | | Sundar Pichai | 12/19/2022 | 12/19/2022 | | | | 669,430 | 1,338,859(3) | 2,677,718 | | 138,464,801 | | Ruth M. Porat | N/A | N/A | — | 2,000,000 | 2,000,000 | | | | | | | Ruth M. Porat | 1/5/2022 | 12/28/2021 | | | | — | — | — | 123,600(4) | 17,013,540 | | Ruth M. Porat | 1/5/2022 | 12/28/2021 | | | | 17,170 | 34,340(4) | 68,680 | — | 5,650,183 | | Prabhakar Raghavan | N/A | N/A | — | 2,000,000 | 2,000,000 | | | | | | | Prabhakar Raghavan | 1/5/2022 | 12/28/2021 | | | | — | — | — | 157,920(4) | 21,737,688 | | Prabhakar Raghavan | 1/5/2022 | 12/28/2021 | | | | 41,200 | 82,400(4) | 164,800 | — | 13,557,808 | | Philipp Schindler | N/A | N/A | — | 2,000,000 | 2,000,000 | | | | | | | Philipp Schindler | 1/5/2022 | 12/28/2021 | | | | — | — | — | 157,920(4) | 21,737,688 | | Philipp Schindler | 1/5/2022 | 12/28/2021 | | | | 41,200 | 82,400(4) | 164,800 | — | 13,557,808 | | Kent Walker | N/A | N/A | — | 2,000,000 | 2,000,000 | | | | | | | Kent Walker | 1/5/2022 | 12/28/2021 | | | | — | — | — | 123,600(4) | 17,013,540 | | Kent Walker | 1/5/2022 | 12/28/2021 | | | | 17,170 | 34,340(4) | 68,680 | — | 5,650,183 |
— GRANTS OF PLAN-BASED AWARDS IN 2022
| (1) The company’s non-equity incentive plan award plan is determined based on the ESG bonus opportunity which consists only of a maximum of $2,000,000 and no threshold or target value. | | (2) GSUs and PSUs are shown at their aggregate grant date fair value in accordance with FASB ASC Topic 718. The fair value of GSUs is measured based on the closing price of Alphabet’s Class C capital stock on the date of grant, and the fair value of PSUs is measured using a Monte Carlo simulation model, as PSUs contain a market condition at the time of grant (as calculated in accordance with FASB ASC Topic 718 and SEC Staff Accounting Bulletin Topic 14). The Monte Carlo simulation model for the PSUs assumes that the stock prices of Alphabet and the peer firms follow a correlated geometric Brownian motion. Under this model, the daily stock prices for Alphabet and peer firms were simulated over the remaining performance period using volatilities and correlations calculated from daily stock returns over a lookback term from the grant date. The valuation was done under a risk-neutral framework using the term-matched zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the grant date. See “Equity Awards” under Section 3 of the CD&A for details on the GSUs and PSUs awarded. | | (3) The exact number of GSUs and PSUs comprising the equity award was calculated by dividing the target GSU and PSU grant values by the average closing price of Alphabet’s Class C capital stock during the month of November 2022 ($94.11 per share), rounded up to the nearest whole share number. | | (4) The exact number of GSUs and PSUs comprising the equity award was calculated by dividing the target GSU and PSU grant values by the average closing price of Alphabet’s Class C capital stock during the month of December 2021 ($145.65 per share), rounded up to the nearest whole share number. |
— OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR-END
— OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR-END The following table provides information on the current holdings of unvested GSUs and PSUs by our named executive officers as of December 31, 2022. There are no longer any stock options outstanding for any of our named executive officers.
— OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR-END
| | | Stock Awards | | | | | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Number of Unearned Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Unearned Shares or Units of Stock That Have Not Vested ($)(1) | | Sundar Pichai | 12/19/2022(3) | 892,573 | 79,198,002 | — | — | | | 12/19/2022(4) | — | — | 1,338,859 | 118,796,959 | | | 12/19/2019(5) | — | — | 1,330,260 | 118,033,970 | | Ruth M. Porat | 1/5/2022(6) | 82,400 | 7,311,352 | — | — | | | 1/5/2022(7) | — | — | 34,340 | 3,046,988 | | | 4/7/2021(8) | — | — | 48,560 | 4,308,729 | | | 5/6/2020(9) | 186,380 | 16,537,497 | — | — | | Prabhakar Raghavan | 1/5/2022(6) | 105,280 | 9,341,494 | — | — | | | 1/5/2022(10) | — | — | 82,400 | 7,311,352 | | | 4/7/2021(11) | — | — | 97,100 | 8,615,683 | | | 5/6/2020(9) | 202,580 | 17,974,923 | — | — | | Philipp Schindler | 1/5/2022(6) | 105,280 | 9,341,494 | | | | | 1/5/2022(10) | | | 82,400 | 7,311,352 | | | 4/7/2021(11) | | | 97,100 | 8,615,683 | | | 5/6/2020(9) | 243,100 | 21,570,263 | | | | Kent Walker | 1/5/2022(6) | 82,400 | 7,311,352 | | | | | 1/5/2022(7) | | | 34,340 | 3,046,988 | | | 4/7/2021(8) | | | 48,560 | 4,308,729 | | | 5/6/2020(9) | 186,380 | 16,537,497 | | |
— OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR-END
| (1) The market value of unvested GSUs and PSUs is calculated by multiplying the number of unvested GSUs and PSUs held by the named executive officer by the closing price of Alphabet’s Class C capital stock on December 30, 2022, which was $88.73 per share. | | (2) The number of PSUs included in the table assumes achievement of market-based goals at the target level, except for Sundar’s 2019 Tranche B PSUs, which are shown at a payout of 192.78% payout based on actual performance for the performance period that ended December 31, 2022. | | (3) This award vests as follows: 1/12th of GSUs vested on March 25, 2023 and an additional 1/12th will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates. | | (4) This award vests as follows: Any PSUs vesting per the applicable grant agreement with respect to the January 1, 2023 to December 31, 2024 performance period (Target = 669,429, but between 0 and 1,338,858 may vest in accordance with the performance requirements in the applicable grant agreement) shall vest within 45 days after December 31, 2024 (2022 Tranche A); and any PSUs vesting per the applicable grant agreement with respect to the January 1, 2023 to December 31, 2025 performance period (Target = 669,430, but between 0 and 1,338,860 may vest in accordance with the performance requirements in the applicable grant agreement) shall vest within 45 days after December 31, 2025 (2022 Tranche B). | | (5) This award vests as follows: The number of PSUs earned per the applicable grant will be determined by the Compensation Committee based on the Company’s achievement of performance goals set forth in the grant agreement and shall vest within 45 days after the performance period ends. With respect to the January 1, 2020 to December 31, 2022 performance period (2019 Tranche B), the Compensation Committee determined on January 5, 2023 that based on the Company’s performance, Sundar earned 192.78% of the target number of PSUs (1,330,260 shares) | | (6) This award vests as follows: 1/12th of GSUs vested on May 25, 2022 and an additional 1/12th will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates. | | (7) This award vests as follows: The number of PSUs earned per the applicable grant will be determined by the Compensation Committee based on the Company’s achievement of performance goals set forth in the grant agreement and shall vest within 45 days after the performance period ends. With respect to the January 1, 2022 to December 31, 2024 performance period, the target is 34,340 shares, but between 0 and 68,680 shares may be earned in accordance with the market-based performance goals. | | (8) This award vests as follows: The number of PSUs earned per the applicable grant will be determined by the Compensation Committee based on the Company’s achievement of performance goals set forth in the grant agreement and shall vest within 45 days after the performance period ends. With respect to the January 1, 2021 to December 31, 2023 performance period, the target is 48,560 shares, but between 0 and 97,100 shares may be earned in accordance with the market-based performance goals. |
— OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR-END
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
— OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR-END
| (9) This award vests as follows: 1/8th of GSUs vested on June 25, 2020 and an additional 1/16th will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates. | | (10) This award vests as follows: The number of PSUs earned per the applicable grant will be determined by the Compensation Committee based on the Company’s achievement of performance goals set forth in the grant agreement and shall vest within 45 days after the performance period ends. With respect to the January 1, 2022 to December 31, 2024 performance period, the target is 82,400 shares, but between 0 and 164,800 shares may be earned in accordance with the market-based performance goals. | | (11) This award vests as follows: The number of PSUs earned per the applicable grant will be determined by the Compensation Committee based on the Company’s achievement of performance goals set forth in the grant agreement and shall vest within 45 days after the performance period ends. With respect to the January 1, 2021 to December 31, 2023 performance period, the target is 97,100 shares, but between 0 and 194,200 shares may be earned in accordance with the market-based performance goals. |
— OPTIONS EXERCISED AND STOCK VESTED IN FISCAL 2022
— OPTIONS EXERCISED AND STOCK VESTED IN FISCAL 2022 The following table provides information for the named executive officers regarding stock option exercises during the year ended December 31, 2022, 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, before payment of any applicable withholding tax.
— OPTIONS EXERCISED AND STOCK VESTED IN FISCAL 2022
| | 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) | | Sundar Pichai | 345,840 | 39,618,219 | 1,993,460 | 262,060,740 | | Ruth M. Porat | — | — | 276,120 | 30,983,056 | | Prabhakar Raghavan | — | — | 352,320 | 39,532,104 | | Philipp Schindler | — | — | 392,820 | 44,077,089 | | Kent Walker | — | — | 276,120 | 30,983,056 |
— OPTIONS EXERCISED AND STOCK VESTED IN FISCAL 2022
| (1) The value realized on exercise is calculated as the product of (a) the number of shares of Alphabet’s 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 Alphabet’s 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. | | (2) The value realized on vesting is calculated as the product of (a) the number of shares of Class C capital stock underlying the GSUs that vested and (b) the closing price of Class C capital stock on the NASDAQ Global Select Market on the day before vesting. The value realized on vesting for vesting events prior to our July 15, 2022 stock split is calculated as the product of (a) the number of pre-stock split shares of Class C Capital stock underlying the GSUs that vested and (b) the pre-stock split closing price of Class C capital stock on the NASDAQ Global Select market on the day before vesting. |
— POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
— POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL We have no agreements with our named executive officers that provide for additional or accelerated compensation upon termination of the named executive officer’s employment or a change in control of Alphabet, except as set forth below. In the event of a change in control of Alphabet and, unless our Board or the 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 and the target number of PSUs awarded to each of our named executive officers will fully vest. Effective December 17, 2019, the Compensation Committee approved an amendment to Alphabet’s form of restricted stock unit agreement for future grants, such that, similar to GSUs granted to all other Alphabet employees, GSUs granted to our non-employee directors and named executive officers of Alphabet will immediately vest in full upon termination of service on the Board, or of employment, by reason of death.
— POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
— POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
In respect to PSUs awarded to our named executive officers:
— POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| ● | Upon a termination of employment by reason of death (i) prior to the start of the performance period of a PSU award or during the performance period of a PSU award, the target number of PSUs for such award will immediately vest in full as of the date of such termination of employment and (ii) following the end of the performance period of an award but prior to the determination date with respect to such award, the number of PSUs earned based on actual performance will immediately vest as of the determination date. | | ● | Upon a termination of employment by Alphabet without cause (as defined in the PSU agreement) prior to the determination date for an award but after the start of the performance period with respect to such award, the number of PSUs earned based on actual performance will be prorated based on the number of calendar days in the performance period a named executive officer performed services and the pro rata portion will vest as of the determination date. |
— POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The following are our estimates of the value each of our named executive officers would have received as the result of GSU and/or PSU vesting, as applicable, following a change in control, death or termination without cause (as defined in the PSU agreement) occurring on December 31, 2022. Upon a change in control or upon death, the estimated benefits of equity acceleration are as follows: $259,222,211 for Sundar, $31,204,566 for Ruth, $43,243,453 for Prabhakar, $46,838,792 for Philipp, and $31,204,566 for Kent. These estimates were calculated by multiplying the number of unvested GSUs and the target number of PSUs, by the closing price of Class C capital stock on December 30, 2022 (the last business day of Alphabet’s fiscal year 2022), which was $88.73 per share. The performance period for Sundar’s 2019 Tranche B PSU award ended on December 31, 2022, and the award vested on January 5, 2023. As such, upon termination without cause, the estimated vested equity value for Sundar is $118,007,365, which reflects the actual value of Sundar’s 2019 Tranche B PSU award. The value was calculated by multiplying 192.78% of the target PSU award for Tranche B by the closing price of Alphabet’s Class C capital stock on January 4, 2023 (the business day immediately prior to vesting), which was $88.71 per share. Upon termination without cause, the estimated vested equity value is $7,774,444 for Ruth, $16,357,365 for Prabhakar, $16,357,365 for Philipp, and $7,774,444 for Kent. The estimated vested equity value reflects prorated achievement of market-based goals at the maximum level for the PSU awards granted in 2021 and 2022. As of December 31, 2022, two-thirds of the performance period for the 2021 PSU awards (January 2021 to December 2022) had been completed, and 365/1096 of the performance period for the 2022 PSU awards (January 2022 to December 2022) had been completed. The estimated vested equity value shown was calculated by multiplying two-thirds of the maximum number of PSUs for the 2021 PSU awards and 365/1096 of the maximum number of PSUs for the 2022 PSU awards by the closing price of Alphabet’s Class C capital stock on December 30, 2022 (the last business day of Alphabet’s fiscal year 2022), which was $88.73 per share.
— ALPHABET CEO PAY RATIO
— ALPHABET CEO PAY RATIO The following table sets forth the ratio of Alphabet Chief Executive Officer Sundar’s total compensation to the median of the annual total compensation of all our employees (except Sundar) for the year ended December 31, 2022.
— ALPHABET CEO PAY RATIO
| Chief Executive Officer total compensation in 2022 | $225,985,145 | | Median Employee total compensation in 2022 | $279,802 | | Ratio of Chief Executive Officer to Median Employee total compensation | 808:1 |
— ALPHABET CEO PAY RATIO
The Chief Executive Officer total compensation reflects Sundar’s 2022 total compensation as shown in the Summary Compensation Table on page 53, including the triennial equity award that was granted to Sundar in December 2022. Given that CEO equity awards are currently made on a triennial cadence, while our broad-based employee equity awards are typically made on an annual cadence, the pay ratio can fluctuate significantly across years. For example, our 2020 pay ratio was 27:1; our 2021 pay ratio was 21:1; and our 2022 pay ratio is 808:1. To determine the median employee compensation, we analyzed all of Alphabet’s employees, excluding Alphabet’s Chief Executive Officer, as of December 31, 2022. 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 measure 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 total compensation of our named executive officers in the 2022 Summary Compensation Table on page 53.
— ALPHABET CEO PAY RATIO
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
— ALPHABET PAY VS. PERFORMANCE
— ALPHABET PAY VS. PERFORMANCE
Compensation Actually Paid
Compensation Actually Paid As outlined in the CD&A above, the Compensation Committee has implemented an executive compensation program that prioritizes performance and aims to align employee and stockholder interests. The following table sets forth additional compensation information for our principal executive officer (PEO) and our non-PEO named executive officers (Non-PEO NEOs), calculated in accordance with Item 402(v) of Regulation S-K, for fiscal years 2022, 2021, and 2020.
Compensation Actually Paid
| Year | Summary Compensation Table (SCT) Total for PEO ($) | Compensation Actually Paid to PEO ($) | Average SCT Total for Non-PEO NEOs ($)(1) | Average Compensation Actually Paid to Non-PEO NEOs ($)(1) | Alphabet TSR ($)(2) | Peer Group TSR (RDG Internet Composite Index) ($)(2) | Net Income (Millions) ($) | 1-Year TSR Relative to S&P 100(3) | | 2022 | 225,985,145 | 115,820,786 | 30,766,792 | (15,249,938) | 131.03 | 81.50 | 59,972 | 14(th) | | 2021 | 6,322,599 | 267,277,583 | 21,657,558 | 72,131,743 | 216.42 | 134.41 | 76,033 | 94(th) | | 2020 | 7,410,162 | 121,360,289 | 55,846,864 | 76,136,650 | 132.73 | 137.32 | 40,269 | 72(nd) |
Compensation Actually Paid
| (1) The Non-PEO NEOs represent the following individuals for each of the years shown: Ruth M. Porat, Prabhakar Raghavan, Philipp Schindler, and Kent Walker. | | (2) Alphabet TSR reflects TSR for Alphabet’s Class C shares (ticker: GOOG). Peer Group TSR is calculated based on the RDG Internet Composite index, which is used for purposes of Item 201(e) of Regulation S-K under the Exchange Act. The calculation is weighted according to the constituent companies’ market capitalization at the beginning of each period for which a return is indicated. | | (3) 1-Year Relative TSR is calculated as a percentile ranking, and reflects TSR for Alphabet’s Class C shares (ticker: GOOG) for each period as a percentile ranking when compared to the TSR for the S&P 100 index (which is the peer group used for purposes of the performance-based awards outlined in the CD&A above). |
Compensation Actually Paid
To calculate Compensation Actually Paid (CAP), the following amounts were deducted from and added to Summary Compensation Table (SCT) total compensation:
Compensation Actually Paid
| | 2022 | | 2021 | | 2020 | | | | PEO ($) | Average for Non-PEO NEOs ($) | PEO ($) | Average for Non-PEO NEOs ($) | PEO ($) | Average for Non-PEO NEOs ($) | | SCT Total | 225,985,145 | 30,766,792 | 6,322,599 | 21,657,558 | 7,410,162 | 55,846,864 | | Adjustments | | | | | | | | Deduction for Amounts Reported Under the “Stock Awards” Column in the SCT (i) | (218,037,684) | (28,979,610) | 0 | (20,989,716) | 0 | (55,130,843) | | Increase for Fair Value of Awards Granted during year that Remain Unvested as of Year End (ii) | 213,860,445 | 10,808,316 | 0 | 29,055,529 | 0 | 53,762,742 | | Increase for Fair Value of Awards Granted during year that Vest during year (ii) | 0 | 5,264,776 | 0 | 0 | 0 | 15,423,645 | | Increase/deduction for Change in Fair Value from Prior Year-end to Current Year-end of Awards Granted Prior to year that were Outstanding and Unvested as of Year-end (ii) | (79,637,516) | (24,101,414) | 234,908,651 | 23,361,513 | 108,778,718 | 5,059,005 | | Increase/deduction for Change in Fair Value from Prior Year-end to Vesting Date of Awards Granted Prior to year that Vested during year (ii) | (26,349,603) | (9,008,799) | 26,046,332 | 19,046,859 | 5,171,409 | 1,175,237 | | Compensation Actually Paid | 115,820,786 | (15,249,938) | 267,277,583 | 72,131,743 | 121,360,289 | 76,136,650 |
Compensation Actually Paid
| (i) Represents the grant date fair value of equity-based awards granted each year. | | (ii) Reflects the value of equity calculated in accordance with the SEC methodology for determining CAP for each year shown. For all equity awards, our methodology for calculating the value of equity remained consistent between the grant date fair value measurement reflected in row (i) and the point-in-time fair value measurements reflected in the adjustment rows that follow. In all cases, we use the closing price on the applicable date as a basis for fair value. Fair values for each PSU award are measured using a Monte Carlo simulation model as PSUs contain a market condition at the time of grant (as calculated in accordance with FASB ASC Topic 718). |
Compensation Actually Paid
| 1 | Corporate Governance | 2 | Director and Executive Compensation | 3 | Audit Matters | 4 | Management and Stockholder Proposals | 5 | Questions and Answers | 6 | Appendices |
Compensation Actually Paid
As outlined in our CD&A, the only financial performance measure we currently incorporate within our executive pay program is Alphabet’s TSR relative to the companies comprising the S&P 100. As such, and as outlined below, relative TSR is the sole and most important financial performance measure as it relates to CAP.
Compensation Actually Paid
| Most Important Performance Measures | | Relative Total Shareholder Return |
Compensation Actually Paid
The PEO’s CAP amounts are aligned with the Company’s TSR, Net Income, and 1-Year TSR ranking relative to the S&P 100 (the Alphabet-selected measure in the CAP table above), with the highest PEO CAP in 2021 when Alphabet TSR, Net Income and 1-Year Relative TSR were at their highest during the three-year period being reported. The reported 2021 Peer Group TSR was slightly down from 2020. The reduced value of the PEO’s outstanding awards in 2022, caused by a decline in our share price, was offset by a new equity award granted in December 2022. For non-PEO NEOs, CAP amounts are generally aligned with the aforementioned measures. However, 2021 was a transition year during which their equity award mix was updated to include performance-based awards, thereby reducing the target-value of grants compared to 2020. This resulted in a decline in non-PEO CAP for 2021 relative to 2020, despite the increase in the Company’s TSR, Net Income, and 1-Year TSR ranking relative to the S&P 100 for 2021 relative to 2020.
Proposal Number 1 Election of Directors
Proposal Number 1 Election of Directors