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This explanation you’ve cooked up is basically just a fan fiction. Any CEO who tried to “hold their board hostage” would be saying goodbye to their job, and lik

This explanation you’ve cooked up is basically just a fan fiction. Any CEO who tried to “hold their board hostage” would be saying goodbye to their job, and likely their career, in short order. Pichai’s salary is $2 million. The rest of his compensation is incentives. Almost all of his compensation comes from incentive packages designed to align his interests with the interests of shareholders.

CPLX 4y ago
Does it bother you at all this this statement is just factually incorrect? The stock is down about 50% give or take over the past year and a half.
- AmericanChopper 4y ago
  Everything I’ve said is 100% factually correct. The bulk of his pay comes from performance incentives (defined by internal, non-share-price-related performance metrics). In the past he’s had a seperate incentive package based on how google stock did benchmarked against the S&P100 index. I don’t know if he still has that, but he’d still be performing well against that metric if he did. Google stock is up about 100% from early 2020. Hope this helps you understand how these incentive packages work a bit better.
  - CPLX 4y ago
    No it’s not. It was in the 70 something range in early 2020 and lately it’s been 90 something. And regardless you still have to demonstrate support for your conclusion, which is that his compensation is aligned with shareholders. It’s not. What we actually have here and with CEO pay in general at large organizations is what’s pretty well known as a principal/agent problem, where the manager class sets the rules for themselves in a way that results in the transfer of assets from shareholders to themselves.
    - AmericanChopper 4y ago
      It was ~$55 in March 2020, and most recently closed at $105. But the two key points you seem to be missing are: 1. Not all incentive packages are tied to share price. Many of them are tied to other metrics that the (shareholder elected) board decide are appropriate. This is where the bulk of Pichai’s comp comes from. 2. When they are tied to share price, they tend to be benchmarked. In this case Pichai’s share price incentives have been benchmarked against the S&P100, against which Google has been doing perfectly well. The reason for this is because directors generally don’t task CEOs with preventing economic downturns, and they typically want any incentives they create to be as effective under those conditions as they would be at any other time. The shareholders are absolutely setting the rules for the executives here.
      - lupire 4y ago
        When you picked the moment of the worldwide Covid crash as your reference point, you are telling everyone that you are not trustworthy. Riding the wave of market alpha is not an accomplishment.
        AmericanChopper 4y ago
        It’s no worse than picking a market high preceding an ongoing recession as a reference, as the parent commenter did. The point is that his stock performance incentives are not tied to the absolute value of the stock, as the parent commenter is mistakenly claiming. Most of his performance based incentives don’t even relate to stock price, as the parent commenter is also mistakenly claiming. But the ones that do are tied to the stock’s performance against a benchmark. That benchmark has had the same ups and downs as the rest of the market, and Google’s stock has been tracking against it very well. Something that is an achievement, and that’s what google’s shareholder elected directors decided to reward him for with performance based incentives. These are very simple concepts, and while you can be forgiven for not already knowing them, aspiring to retain your ignorance certainly isn’t admirable.
nkrisc 4y ago
So he could perform so poorly he gets $0 in incentives, collects his $2,000,000 salary, gets fired, and still make in one year more than the average US household will in the next ~25 years.

CPLX 4y ago

Does it bother you at all this this statement is just factually incorrect? The stock is down about 50% give or take over the past year and a half.

AmericanChopper 4y ago
Everything I’ve said is 100% factually correct. The bulk of his pay comes from performance incentives (defined by internal, non-share-price-related performance metrics). In the past he’s had a seperate incentive package based on how google stock did benchmarked against the S&P100 index. I don’t know if he still has that, but he’d still be performing well against that metric if he did. Google stock is up about 100% from early 2020. Hope this helps you understand how these incentive packages work a bit better.
- CPLX 4y ago
  No it’s not. It was in the 70 something range in early 2020 and lately it’s been 90 something. And regardless you still have to demonstrate support for your conclusion, which is that his compensation is aligned with shareholders. It’s not. What we actually have here and with CEO pay in general at large organizations is what’s pretty well known as a principal/agent problem, where the manager class sets the rules for themselves in a way that results in the transfer of assets from shareholders to themselves.
  - AmericanChopper 4y ago
    It was ~$55 in March 2020, and most recently closed at $105. But the two key points you seem to be missing are: 1. Not all incentive packages are tied to share price. Many of them are tied to other metrics that the (shareholder elected) board decide are appropriate. This is where the bulk of Pichai’s comp comes from. 2. When they are tied to share price, they tend to be benchmarked. In this case Pichai’s share price incentives have been benchmarked against the S&P100, against which Google has been doing perfectly well. The reason for this is because directors generally don’t task CEOs with preventing economic downturns, and they typically want any incentives they create to be as effective under those conditions as they would be at any other time. The shareholders are absolutely setting the rules for the executives here.
    - lupire 4y ago
      When you picked the moment of the worldwide Covid crash as your reference point, you are telling everyone that you are not trustworthy. Riding the wave of market alpha is not an accomplishment.
      - AmericanChopper 4y ago
        It’s no worse than picking a market high preceding an ongoing recession as a reference, as the parent commenter did. The point is that his stock performance incentives are not tied to the absolute value of the stock, as the parent commenter is mistakenly claiming. Most of his performance based incentives don’t even relate to stock price, as the parent commenter is also mistakenly claiming. But the ones that do are tied to the stock’s performance against a benchmark. That benchmark has had the same ups and downs as the rest of the market, and Google’s stock has been tracking against it very well. Something that is an achievement, and that’s what google’s shareholder elected directors decided to reward him for with performance based incentives. These are very simple concepts, and while you can be forgiven for not already knowing them, aspiring to retain your ignorance certainly isn’t admirable.

nkrisc 4y ago

So he could perform so poorly he gets $0 in incentives, collects his $2,000,000 salary, gets fired, and still make in one year more than the average US household will in the next ~25 years.