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Monday, April 23, 2012

Google Ex-CEO Gets $101M Pay Package

Story first appeared in USA Today.

Shifting from Google's CEO to executive chairman proved to be lucrative career move.

Google awarded the executive chairman a compensation package valued at $101 million last year, according to a Friday regulatory filing. The amount is 322 times higher than the $313,219 package that he received in 2010 during his final full year as the Internet search leader's CEO.

The new executive chairman recently ended a decade-long stint as Google's CEO last April and turned over the job to the Google co-founder.

Shortly before the change in command, Google gave him stock and stock options valued at nearly $94 million, according to the company's proxy statement. Google had designed the stock and stock option package to be worth $100 million, but the compensation formula spelled out by securities regulators arrived at a slightly different calculation.

To top it off, Google raised his salary from $1 annually as CEO to $1.25 million as executive chairman. His 2011 salary ended up being $937,500 because he spent the first three months of the year in the lower-paying job as CEO.

The rest of the executive chairman's 2011 compensation consisted of a $6 million bonus and perks worth nearly $264,000. He deposited half of his bonus last year in a company plan that can defer payment for up to five years.

The current CEO compensation package totaled $1 last year, consisting solely of a nominal salary. He has maintained a $1 salary since 2005, although in some years he has accepted the Google's companywide holiday bonus. That's what happened in 2010 when his pay package totaled $1,723.

Weekly paychecks, annual bonuses and stock options haven't been essential to the executives since Google's initial public offering of stock in August 2004. That IPO turned them, along with the other Google co-founder, into multibillionaires who are perennials on Forbes' list of the world's richest people.

Forbes' latest rankings estimate show that the Google co-founders are each worth nearly $19 billion. The magazine pegs the executive chairman's wealth at nearly $7 billion.

Since Google's IPO, the executive chairman's total compensation package as CEO had never exceeded $560,000, based on an analysis of Google's past regulatory filings. From 2004 through 2010, his combined compensation totaled $2.2 million.

The executive chairman serves as a company ambassador who meets with government regulators, explores potential acquisitions and makes public appearances.

In its proxy statement, Google described the provided big stock and stock option package as a way to recognize the new executive chairman's accomplishments as CEO. When Schmidt took in job in 2002, Google had annual revenue of $86 million and fewer than 300 employees. In Schmidt's final full year as CEO, Google had grown to a company with $29 billion in revenue and more than 24,000 employees.

Even after last year's big windfall, the executive chairman is still raising cash. In February, he filed plans to sell up to 2.4 million shares of stock currently worth about $1.4 billion.

The co-founders are in the process of selling 5 million Google shares apiece under a program scheduled to be completed in 2015.
The co-founders and the executive chairman have been Google's controlling shareholders since the IPO, thanks to a special class of stock that gives them 10 times the voting power of other shareholders. To ensure they remain in power as Google doles out more stock to pay employees and finance acquisitions, Brin and Page are pursuing a 2-for-1 stock split that will create new class of shares with zero voting power.

The unusual stock split announced last week has been derided by corporate governance experts who oppose disenfranchising other shareholders.

But the proposal is almost certain to be approved at Google's June 21 annual meeting because the executives support it.

Friday's regulatory filing disclosed that the idea for the stock split was first broached in June 2010. Google's board then formed a special committee to analyze the pros and cons.

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