Sundar Pichai, the chief executive of Alphabet Inc., has been granted a new compensation package that links part of his pay to the performance of Waymo, the company’s self-driving robotaxi business.
According to a filing with the U.S. Securities and Exchange Commission released Friday, Pichai received a fresh three-year equity award. The package could reach as much as $692 million if he achieves the performance goals set by Alphabet’s board. Notably, a portion of the incentive is tied to Waymo’s progress, marking the first time the autonomous vehicle unit has been directly linked to the CEO’s pay structure.
Much of the structure of the package remains similar to the equity award Sundar Pichai received in 2022, according to the filing. What is new this time is the focus on two of Alphabet Inc.’s so-called “Other Bets,” particularly Waymo and Wing Aviation, the company’s drone delivery arm.
Under the plan, Pichai could earn as much as $260 million based on how much Waymo’s per-unit valuation rises over the next three years. That value will be determined by Alphabet’s compensation committee, which will estimate what a single Waymo equity unit is worth during that period.
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The filing does not outline specific operational milestones that Pichai must achieve to qualify for the incentive. A spokesperson for Alphabet declined to comment.
This structure has become increasingly common across large technology companies, where executive pay is often tied to long-term company results. In Pichai’s case, the bulk of the payout will materialize only if Alphabet meets the performance benchmarks set by its board.
Analysts say performance-based compensation is intended to keep the interests of corporate leaders closely aligned with those of investors. Simply put, the chief executive stands to gain financially when the company performs well. The stock awards will also vest gradually over several years, a system designed to encourage long-term decision-making rather than short-term gains.
Sundar Pichai first became chief executive of Google in 2015. In 2019, he took on an even broader role when he was named CEO of Alphabet Inc., the parent company that oversees Google and several other businesses.
During his tenure, the company has expanded across several areas of technology. Google’s cloud division has grown steadily and now ranks among the leading competitors in the global cloud computing market. The company has also pushed deeper into hardware, developing products such as Google Pixel smartphones, smart home devices and wearable technology.
Artificial intelligence has become one of the company’s biggest priorities. Under Pichai’s leadership, Google has rolled out a range of AI tools and woven them into many of its products and services.