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> Alphabet CEO Sundar Pichai was awarded compensation worth more than $225 million in 2022 I know this has been discussed here and 225MM is like the salary of
by melenaboija 3y ago
> Alphabet CEO Sundar Pichai was awarded compensation worth more than $225 million in 2022
I know this has been discussed here and 225MM is like the salary of 1000 employees making 200K for only one year, it is stock which is volatoile, that the salary of a CEO is impossible to measure, bla bla bla. But holy guacamole, whatever is the angle I look at it 225MM pear year does not make any f_ing sense to me and it is simply obscene for the 99.99% of the world population as would be enough to retire 5 or 6 generations of regular people.
- PartiallyTyped 3y agoThe claim is that you want the CEO to be aligned with the shareholders, and therefore you incentivize them with high salaries. Who cares about future shareholders or consequences for that matter when you earn 225MM ? Go move to some country that doesn't tax capital gains, sell it all, and live on 4% of it, which is 9MM per year; live like a king, buy absurd amounts of land and multiply your passive income. Obscene is an understatement.
- ethanbond 3y agoNot to mention you can keep CEOs “aligned with shareholders” by firing them if they behave in ways that are misaligned.
- PartiallyTyped 3y agoCEOs usually don't join without a golden parachute, and shareholders seem to only care about immediate gains. To see the insanity, Selipsky in Q1 AWS all hands was talking about growth of the rate of growth, i.e. second order. Not steady income, not income increasing (which is already exponential across years), but super-exponential; i.e. 20% , then 25%, then 30% growth. Who cares about sustainable and organic growth! We have to milk those pesky engineers and all our customers!
- vouaobrasil 3y agoThat makes sense to you and me but...if the world were only populated by people who were happy to just have enough to live a comfortable life as soon as they could, or even a very rich life as soon as they could cash out, then we would not have half the insanity we do today. And Sundar Pinchai and other CEOs could have quit a long time ago if they wanted to do that. If I were in the place of ANY CEO today of Google, Microsoft, Facebook, of course I would quit immediately with far LESS money and do something else....but they don't, speaking of the incredible pathology that lies within them.
- s1artibartfast 3y agoYou can't move countries to avoid capital gains.
- JJMcJ 3y agoWhat often happens is that corporation in high tax country has subsidiary in low tax country that they find a way to funnel profits too. Not sure on details myself. It has to be done just right. I believe Ireland and the Netherlands are often host countries. Now this is different than money laundering, which is big time illegal, of course.
- seneca 3y ago> What often happens is that corporation in high tax country has subsidiary in low tax country that they find a way to funnel profits too. That has nothing to do with individual taxes.
- s1artibartfast 3y agoI think you're talking about the double Irish corporate inversion loophole, which applied to multinational companies, and was closed 10 years ago. As a US individual you get taxed no matter where in the world you live, and you must pay capital gains on all of your assets before giving up citizenship
- JJMcJ 3y agoI believe the Netherlands one, which I don't fully understand, is still in place.
- PartiallyTyped 3y agoWhy not? I know in Poland I am not taxed until I sell the stock; and if I am out of the country for X amount of time, I am not considered a taxed resident. I am fairly certain the US is different, but I know that I can do that in Europe.
- ultrasaurus 3y ago
- jimbob45 3y agoI guess the counterargument would be that the $225MM is imaginary money - he doesn’t actually make that much until he cashes out and cashing out at the wrong times is what we should actually condemn. That said, the rules for stock, stock ownership, and splits are all made up on the fly anyway so I don’t want to defend any of this. Stock dilution in particular seems like legal theft.
- deleted 3y ago[deleted]
- ShowalkKama 3y agoonly 5 or 6? 4k a month is way more than the average person makes in my country, that's 3.84M for 80 years. 225 / 3.84 = 58.59 people there is no fucking way you can justify that number but oh well, what can you do about it?
- Davidzheng 3y agoEach generation can have more than one person
- SteveNuts 3y agoAnd then you get guys like Bill McGuire who get caught backdating stock options. His punishment? A $1.6Bn golden parachute of course. https://en.m.wikipedia.org/wiki/William_W._McGuire#UnitedHealth https://en.m.wikipedia.org/wiki/William_W._McGuire#UnitedHea...
- deleted 3y ago[deleted]
- jvmfjvfjvf 3y agoHe did not get a golden parachute. He was compensated that amount over time. He grew a company from $400MM in revenues to $70Bn and was rewarded $1.6Bn for it. I fail to see any issue with this.
- SteveNuts 3y agoI mean, he broke the law. I'd consider every dime of his payout to be ill gotten gains.
- ocdtrekkie 3y agoIt's stunning how you can make that much money while also pretty much completely burning the company to the ground. Destroyed nearly all trust with consumers, the core product is mostly a joke, every legal jurisdiction out there has a case against Google pending, and oh, yeah, even Google's own employees have been shaken by the layoffs and many of the usual shills for the company have gone quiet because, well, they stopped getting paid. If CEO pay is supposed to have any relationship to actual outcome, dude should be long gone, not be getting salary increases. Sure, shareholders have gotten some short term gains, but the company no longer has a positive long-term outlook.
- whitepaint 3y agoGoogle is a $1.6T company. For a guy that runs it to earn $200 M a year is basically nothing. Can he do good enough of job? Great, he's then definitely worth it (and, actually, he's worth much more).
- empyrrhicist 3y ago> (and, actually, he's worth much more). Bullshit. Fucking nonsense, bullshit. I fail to understand how thinking people could ever believe that this is true - it's got to be innumeracy and a healthy dose of propaganda. Would Google lose the now-equivalent of 200m annual if any one of the top 100 leaders within the corp ascended to the goddamned throne? Fuck no. It's nonsense to believe any one person is worth compensating at that level.
- jvmfjvfjvf 3y agoWhat are your thoughts on NFL player Josh Allen having a $250MM contract? I fail to understand why there is more controversy over CEO pay than athletes.
- raincole 3y agoBecause it's easier to measure an athlete's performance than to measure a CEO's. And athletes usually have no right to fire people (at least not a lot of people at once).
- evandale 3y agoYou don't think LeBron has any say in the teammates they sign? Tom Brady famously got Gronk out of retirement and Brown was on the team because of Brady despite having a horrible reputation and being essentially blacklisted from the NFL. Star players are a dime a dozen in professional sports and I don't think their influence on the team makeup is as rare as you think. In fact, a big name star might have _more_ hiring power than a typical CEO in a public company.
- empyrrhicist 3y ago
- jvmfjvfjvf 3y ago225MM is not salary. It is stock compensation based on performance.
- RugnirViking 3y agoA distinction without a difference. Nobody is getting cash in that amount
- jvmfjvfjvf 3y agoThere is a huge difference, If Google stock underperforms, he is not getting that compensation unlike salaried folks.
- hanniabu 3y agoStock fluctuations are irrelevant with this amount... stock could tank 20% and here's still getting $175M
- jvmfjvfjvf 3y agoThe stock would be worth less than his options price. Why would he still get $175M?
- djcapelis 3y agoThey’re not options, they’re grants of stock units which vest over time. A unit of stock is a share granted and vesting at its full price, not an option to buy stock at some price later. While startups use options, most large public tech companies typically do not.
- RugnirViking 3y agowell it's extremely unlikely to go to zero, and it can just as likely if not more so go up. He's almost certainly going to be offloading the stock at a pre-agreed rate, the kind of rate that means him and his children and grandchildren will never want for anything in their lives. It also exists as an asset, meaning he can borrow against it if for whatever bizzare reason he needs more. just like everyone with net worths over something like 10 million. Like I say, almost nobody has cash/fully liquid assets in those amounts. Doesn't stop them from commanding vast amounts of resources on lavish lifstyles, not to mention foolhardy projects and follies on the regular.
- sinatra 3y agoJust to be fair, for 90% of the world, the kinds of compensation many hacker news readers have (a Silicon Valley engineer who gets a high base plus bonus plus equity) would also be considered “holy guacamole, whatever is the angle I look at it … does not make any f_ing sense”
- jayd16 3y agoIf you look at the cost of living in SF and what you get, it starts to make sense. What is the equivalent argument for hundreds of millions?
- oars 3y agoJanitors, baristas, waiters, waitresses, bus drivers are also living in the Bay Area on nowhere close to those salaries. SF engineer salaries are still insane to these people. And they need to deal with the cost of living in SF.
- cscurmudgeon 3y agoWhy should there be a justification? The only argument should be between Google and Pichai. Strangely, why aren't we doing the same for actors and sports stars?
- cudgy 3y agoPoor example. How many people bought or used a tech product solely based on the CEO of the company? Virtually none How many movies do people attend solely based on the actors in the movie? Or sporting events due to a player on a team? Many
- cscurmudgeon 3y agoPoor logic. Why should that matter? The initial argument was that no one should need that much money. The sporting events can't take place soley due to the star. Do you think the star built the stadium or did all the background work for a movie? By this logic, movies with novice actors should always do bad. > How many people bought or used a tech product solely based on the CEO of the company? Not explicitly. What about founder CEOs who built v1 on their own?
- crazygringo 3y agoTo be clear, it's an accounting artifact, NOT what he actually makes per year -- as the rest of the sentence might clue the reader into: > which marked a staggering 3,474% increase from the previous year For whatever reason, Google pays their CEO using a "triennial" stock award. It vests over 3 years. So just to be accurate, his yearly compensation is more like $75 MM. Still obviously a lot of money for anyone, but now a number that actually makes sense to compare with other CEO's.
- thomasahle 3y ago> So just to be accurate, his yearly compensation is more like $75 MM. But do you know he doesn't get a new "3 year vesting stock award" every year? It seems like he was paid 3% less the year before. That's normally the approach with vesting schedules like this, to stagger them, so there's never a "good time point" for him to leave.
- TearsInTheRain 3y agoCEOs at his level dont just leave on a whim. They have multi year transition plans.
- gmerc 3y ago[flagged]
- crazygringo 3y agoBecause you can look it up, he doesn't. That's the approach with rank-and-file employees, but not with the Google CEO, for whatever reason.
- opportune 3y agoIf you are running something worth over $1 trillion that makes hundreds of billions of dollars per year it makes sense though, right? You can argue even a mediocre CEO could do ok, and I’d agree, but at the same time you could easily justify paying huge amounts of money to get a CEO who will only perform better by 1%/year. To me it’s really the size of the big tech companies that’s mind boggling. The fact companies that didn’t, or barely, even existed 25 years ago can make hundreds of billions of dollars is just insane.
- pravus 3y ago>If you are running something worth over $1 trillion that makes hundreds of billions of dollars per year it makes sense though, right? But he isn't running it. He has legal control over it, but in terms of sweat equity he only gets 24 hours in the day like everyone else and you can't tell me he somehow converts that to 1000x the labor of an average, capable, willing, working employee.
- opportune 3y agoSure, but he decides how to allocate resources, make acquisitions, etc. across over 100k employees. If he decided to pull another Google+ he could easily destroy many tens of thousands of engineers’ worth of labor. And it’d only take him a few hundred hours to make that decision, set up the org to lead the project and delegate the execution to them. Putting those engineers on something that actually makes money and is a viable business like Cloud could do the opposite. It’s not about the time it takes him to make these decisions so much as the quality of his decisions having potentially massive $ impacts on the company’s performance.
- deleted 3y ago[deleted]
- mycentstoo 3y agoI wish I understood why so many options are granted in the first place. If they offered 10,000 fewer options, would performance be any worse? Wouldn't a lot of people be vying for that same position and couldn't the company use that to drive down compensation? Couldn't a company in fact, trade on the idea that the extra power and prestige offsets the need for additional stock compensation? And how much of the stock price change can be reduced to a CEO's impact anyways? If it can't be reduced, then why care so much as to overcompensate for their impact in the first place?
- opportune 3y agoSundar, like many other Google insiders, almost certainly has so much money he could just retire and live a life of luxury if he wanted to. And almost certainly he could probably choose a position within Alphabet with less responsibility like Chief Product Officer. To me it’s almost certainly a matter of the founders thinking he’s the best person in the world for the job of CEO and paying him a ton to justify the responsibility and stress of a position he could just decline. This will sound insane but $200mm at Google scale is not even that much. All in, it’s about the cost of having another 200 SWE org or increasing earnings by like 1%. If it’s enough to keep him happy it’s easily worth it
- Quarrelsome 3y ago> it’s easily worth it but is it really? How do we accurately measure CEO performance? We can barely measure developer productivity in any sort of meaningful fashion. Blowing $200m on what is effectively a faith based assessment seems a bit questionable.
- anurag6892 3y agowhen dealing with 1%, what is the need for accurate measurements? they calibrate his pay to other CEOs in tech and other industries, and that is good enough.
- Sai_ 3y ago
- swozey 3y agoI worked for a guy a decade ago who spent 8-10 years building a company to sell it for $300-400 million and he hasn't worked a day since. Owns a 30k acre ranch that a bunch of friends/family live on. Learjets. Villas in the islands, things like that. I can't think of one thing he hasn't done or is limited financially in doing. Last time I saw him he had a $120k watch on, some type of Hublot big bang. And Pichai gets that yearly... Here, check out the type of trash he spends his money on now. https://www.drivetanks.com/ https://www.drivetanks.com/ Absolute waste to society.
- jvmfjvfjvf 3y agoWhy is that trash? I would love to drive and shoot a real tank as a civilian.
- Quarrelsome 3y agocan we argue carbon footprint?
- jvmfjvfjvf 3y agoA tank is 1 mpg. I am guessing they are not driving more than 1 or 2 miles on an excursion. This is hardly harmful to the environment compared to other entertainment options.
- DropInIn 3y agoA quick Google shows 0.6 mpg.... Imma call for a citation from ya
- amelius 3y agoAt least they are not launching space rockets.
- swozey 3y agoHis ranch is on the MX/TX border and he owns domains (to resell) such as roaches.com, illegal.com, molest.com, etc. Take with those what you will of the sort of person he is. That's just the few I remember otoh. He has hundreds.
- ActorNightly 3y ago>whatever is the angle I look at it 225MM pear year does not make any f_ing sense to me Whenever a company starts, its not like the salary is auto set at 225M. The salary of the CEO is tied to the stock price to incentivize growth. Initially CEOs make way, way lower amounts (ignoring bullshit VC capital and inflated salaries). If it so happens that the stock goes up with growth, then the increase in salary represents the responsibility amount that the CEO has, as bad decisions can cost lots of peoples jobs and so on. Whenever you have market upswings that cause these ridiculously high 225M, its in a weird way the people saying the CEO wants to get paid that much. People spend more money that they have due to wfh and stimulus (granted by the people and who they vote for), causing revenues to go up, causing investment capital to go up (with a tieback to people putting money in things like 401k that depend on this as well), causing the market to go up, and so on. TLDR, its not optimal, but it makes sense.
- hanniabu 3y ago> The salary of the CEO is tied to the stock price to incentivize growth If it were a more reasonable amount I would agree, but with the amount they're given they could do a piss poor job, tank the stock value 90%, and still come out with $22M.... not much of an incentive
- cudgy 3y ago“ then the increase in salary represents the responsibility amount that the CEO has, as bad decisions can cost lots of peoples jobs and so on.” He made bad decisions that caused people to lose jobs and they knew this well before the layoffs were announced. So he gets a raise and continued support?
- Nifty3929 3y agoI imagine the shareholders and board members that approve these pay packages are rational, self-motivated actors who believe that doing so is in their best interest. Also, keep in mind that the terms are determined well in advance if these payouts, and tied to stock price or performance. So if the stock does well the amount can be very high, or if the stock does poorly then it can be (relatively) much lower. And since layoffs hopefully mean that society is getting equivalent output (ads, I guess?) with correspondingly less input (labor), it’s not a sign of weakness or mistake when they are implemented.
- ralph84 3y agoThe shareholders have all delegated their voting rights to money managers who don’t care as long as they keep getting a percentage of assets under management and the board members are all obscenely paid executives at other companies who don’t care as long they keep the executive pay cartel going.
- AndrewKemendo 3y agoThe entire purpose of compensation like this at the highest levels is to ensure that no other possible group could incentivize you to betray in any way the board or shareholders Think about it like they are paying based on the question of: how much does it cost to keep this person protecting all of our Crown Jewels AND will never support unionization or anything that gives meaningful power to employees? The bigger the risk to shareholders if something goes wrong with the stock, or if the CEO defected to a competitor, the more pay they offer.
- satvikpendem 3y agoTo shareholders (including many of us on HN, even), it's an investment of 225 million to receive profits of billions, thereby increasing the stock price for us. It makes perfect sense from that lens. If I could pay 1 dollar to turn it into 1000 dollars, I'd take that deal every time.
- cudgy 3y agoIf only you actually knew that he was the reason for that increase in performance.
- satvikpendem 3y agoI do know it because I've also been in places where CEOs essentially destroyed the entire business. Just as absolute power in kings can create despots or benevolent dictators, so too can it occur in the chief executive officer.
- jarjoura 3y agoGoogle is overperforming in-spite of its CEO, not because of him. Google hasn't really been doing anything recently other than run on the fumes of its past successes.
- geraldhh 3y agoyou seem to know about "kilo", "mega" and "giga" why use "MM"?