Alphabet far surpassed analyst estimates with diluted EPS of $22.30 for quarter four of 2020. Analysts expected $15.58, a gain over quarter four 2019's $15.35.
In late 2019, current CEO of Alphabet Sundar Pichai transitioned from being the CEO of just Google to the CEO of the entire firm. This coincided with Google founders Sergey Brin and Larry Page stepping away from their positions as CEO and President of Alphabet, respectively. At the time, Brin and Page said that it was "time to assume the role of proud parents—offering advice and love, but not daily nagging."
Alphabet's remaining top executives, including Pichai, CFO Ruth Porat, and Chief Legal Officer David Drummond continued to lead the firm into 2020. It's worth noting that Drummond isn't part of this team anymore — his retirement was effective on January 31, 2020, amid accusations of his having multiple relationships with subordinates.
Let's dig into Alphabet's compensation.
Alphabet's executive compensation
Each year, the SEC requires public companies to disclose compensation for top executives. This disclosure is included in a document called a proxy statement. According to Alphabet's most recent proxy statement, its executives made between $1.00 and $280 million in total 2019 compensation.
In the charts below, we show compensation for each executive as it was presented in the summary compensation table in Alphabet's proxy statement, split out by element. Hold your cursor over the labels at the top to highlight the different parts of the executives' compensation, and reference the bulleted list below for more information on each compensation element.
The chart below shows Alphabet's executive compensation. Note that Pichai's massive $276.6 million equity awards in 2019 dwarf compensation for the other executives.
To get a better view of compensation for the rest of the disclosed executives, this chart shows Alphabet's executive compensation, excluding Pichai's.
In 2019, Pichai received three separate equity awards — one performance-based equity award worth $90 million, the amount of which vests, or becomes available to Pichai to use, based on total shareholder return performance between 2019 and 2022, and two time-based awards together worth $150 million, meaning they become available to Pichai on certain dates. In total, Pichai's stock awards were valued at $276.6 million.
Other executives received no equity awards in 2019 (but both received equity awards of $46.6 million in 2018).
What the terms in the chart mean:
- Salary: The salary an executive earns in a given year.
- Stock awards/option awards: Equity awards based on achievement within a firm's long-term incentive plan. Long-term incentives are also considered "at-risk" pay. Stock and option awards are two different types of equity awards — stocks are direct equity awards, while options give the executive the right to buy shares at a specific price.
- NEIP: Typically cash grants for performance in the short term. Bonuses are typically one-off awards, while anything in the column titled NEIP (nonequity incentive plan) typically means the awards are granted as part of a firm's short-term incentive plan and granted in cash (hence the "nonequity" label). Short-term incentives are thought of as part of "at-risk" pay, meaning that the executive must hit goals or benchmarks to receive the award.
- Other compensation: This number includes any value from the compensation data related to pension plans or nonqualified deferred-compensation earnings. It also includes any payments designated as "other compensation," which can include payment for things like personal or home security, employees' benefits plans, country-club fees, fees related to use of company aircraft, and even relocation expenses.
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