TLDR
- Alphabet approved a new pay package for CEO Sundar Pichai worth up to $692 million over three years
- The base salary stays at $2 million per year — the bulk is in stock awards tied to performance
- Performance stock units have a target of $126 million, rising to $252 million if Alphabet outperforms peers in the S&P 100
- Pichai could earn up to $130 million from Waymo and $45 million from Wing if those units hit targets
- GOOGL closed down 0.78% at $298.52 on Friday following the SEC filing
Alphabet’s board just handed Sundar Pichai one of the richest pay deals in corporate history. The package, filed with the SEC on Friday, could pay out up to $692 million over the next three years. Most of it is tied to how the company and its subsidiaries perform.
His base salary stays the same at $2 million per year — pocket change compared to what’s on the table in stock.
The core of the deal is a performance stock unit grant with a target value of $126 million. If Alphabet’s total shareholder return beats out other large S&P 100 companies, that number could double to $252 million. If performance falls short, it pays out nothing.
On top of that, Pichai gets $84 million in restricted stock that vests monthly over three years, as long as he stays with the company. There’s no performance gate on that piece — just tenure.
GOOGL dropped 0.78% on Friday, closing at $298.52, on the day the filing hit.
Waymo and Wing Tied Directly to Pichai’s Pay
The most eye-catching parts of the package are the awards tied to Alphabet’s newer bets.
Waymo, the autonomous vehicle unit, comes with a target payout of $130 million. If the business performs strongly, that number could reach $260 million. It’s a direct financial incentive for Pichai to drive results at the self-driving division.
Wing, the drone delivery arm, has a smaller but still striking target of $45 million — with a ceiling of $90 million if the unit hits its growth benchmarks.
Alphabet’s board acknowledged both units face real technical hurdles, but said they’ve made strong progress. The company described Waymo and Wing as “tackling enormous challenges in autonomous driving and delivery.”
If Pichai is dismissed, he forfeits all stock options that haven’t yet vested.
A Decade of Market Growth Behind the Deal
The timing of this package reflects just how much ground Alphabet has covered under Pichai’s watch. When he took the CEO role in 2015, the company was worth around $535 billion. It’s now sitting at roughly $3.6 trillion, briefly crossing $4 trillion in January.
The board framed the new package as a way to keep him focused on key growth areas, noting that “further incentivizing Mr. Pichai is in the best interests of Alphabet and its stockholders.”
Pichai and his wife currently own about 1.67 million Alphabet shares, worth close to $498 million at the recent price of around $298.
Wall Street remains bullish on GOOGL. The stock carries a Strong Buy consensus from 32 analysts, with an average price target of $376.57 — implying around 26% upside from current levels.
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