Googlers angry about CEO's $226M pay after cuts in perks and 12,000 layoffs

Following Google's layoff of 12,000 employees and other cost-cutting moves, employees are reportedly expressing anger about CEO Sundar Pichai's $226 million pay package.

"In the weeks since Pichai's annual compensation was made public, internal Google platforms have filled with conversations and memes slamming the CEO for taking a pay bump while slashing costs elsewhere," CNBC reported yesterday. CNBC's report said internal memes shared by employees also criticized Google owner Alphabet's recent authorization of a $70 billion stock repurchase program, the same amount as last year. Pichai is the CEO of both Alphabet and Google.

According to CNBC, one "popular meme showed an image of Shrek character Lord Farquaad with the text 'Sundar accepting $226 million while laying off 12k Googlers, cutting perks, and destroying morale and culture.'" It also included the Farquaad quote, "some of you may die, but that is a sacrifice I am willing to make."

The median Alphabet employee was paid $279,802 in 2022. Although Alphabet lists Pichai's 2022 compensation as $226 million, most of it will vest over three years, and the amount could change. The total value is lower than the triennial award he got for the previous three-year period.

"We respect shareholders more than Googlers"

One meme with over 700 likes read, "$70 billion in buybacks shows we respect external shareholders more than Googlers," according to CNBC. There were also reportedly memes "comparing Pichai to Apple CEO Tim Cook, who in January received over a 40 percent cut from his 2022 target total compensation."

Cook requested a pay cut that dropped his target compensation to $49 million in 2023. In 2022, Cook's target compensation was $84 million, but he ended up receiving $99.4 million.

CNBC said it viewed over a dozen memes shared in Google's internal discussion forums, including one "with more than 1,200 likes [that] referred to comments from finance chief Ruth Porat, who wrote last month in a rare companywide email that the company is making 'multi-year' cuts to employee services."

"Ruth's cost savings applied to everyone... except our hardworking VPs and CEO," the meme reportedly said. The spending cuts announced by Porat reportedly target office supplies, laptop replacements, fitness classes, snack bars, cafeterias, and more.

When contacted by Ars, a Google spokesperson declined to comment on the report of employee complaints.

After Google's January announcement of 12,000 layoffs, Pichai reportedly said in a meeting with staff that Google executives would take a "very significant reduction in their annual bonus." Pichai wrote in an email to employees that "I take full responsibility for the decisions that led us here," saying that over the past two years the company "hired for a different economic reality than the one we face today." Alphabet had 190,234 employees at the end of 2022.

In Q1 2023, Alphabet reported revenue of $69.8 billion and net income of $15.1 billion, outperforming analysts' expectations.

CEO-to-worker pay ratio of 808:1

Pichai's compensation includes a $218 million stock award that was granted in December 2022 and will vest over three years, according to a regulatory filing. The amount could change in value depending on the company's stock performance. Pichai's total pay in 2021 was listed as $6.3 million, and in 2020 it was $7.4 million.

Pichai's listed annual pay varies significantly because of the large stock awards he's granted once every three years. His 2019 pay was $280.6 million and his 2016 pay was about $200 million.

Alphabet reported that Pichai's 2022 compensation was 808 times more than the median employee's. "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," Alphabet's filing said.

Alphabet's CEO-to-employee ratio was 1,085:1 in 2019, when Pichai was awarded $280.6 million and the median salary was $258,708. Apple reported a pay ratio in 2022 of 1,177:1. Apple's ratio is likely to drop in 2023 because of Cook's pay cut.

In a December 2022 filing, Alphabet said that the "vesting of a significant portion of the award will depend on Alphabet's total shareholder return (relative to S&P 100 companies), and this performance-based equity may not vest at all." Alphabet also said it increased the proportion of "performance stock units" in Pichai's pay package from 43 percent to 60 percent, and changed the S&P 100 percentile target from the 50th percentile to the 55th percentile.

These changes will "further align Mr. Pichai'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 company said.