Sundar Pichai, CEO of Google, recently said at a town hall meeting with workers that all positions above the senior vice president level would face a large drop in their yearly bonus. Pichai did not specify how much of an amount or for how long salaries will be reduced.
Given that Sundar Pichai’s salary is tied to the company’s success and that his job (CEO) is one of those named by him for pay cutbacks, it’s probable that Pichai himself will accept a pay cut.
During the address, Pichai said
“The more senior you are, the more your compensation is tied to performance,” he said, as per TOI.
“You can reduce your equity grants if performance is not great,” he added.
Even while it hasn’t been confirmed, it’s safe to assume that Pichai, like the rest of the company’s senior brass, will be seeing a compensation reduction. Not only did Google decide to lay off workers, but it also decided to defer incentive payments, handing out just 80% of bonuses in January and the remainder in March or April. The whole bonus was dispersed in January of the prior year.
Recently, Alphabet, Google’s parent firm, increased CEO Sundar Pichai’s remuneration significantly in light of his “great performance” in his role. Google announced Pichai’s $2 million compensation for 2020. The IIFL Hurun India Rich List 2022 reports a 20% decline in his wealth to Rs 5,300 crore.
Just a few weeks ago, Google announced layoffs affecting 12,000 workers across all of its departments. Many affected workers have complained that they were caught off guard by the layoffs and that they were suddenly cut off from internal office groups. According to ET, several laid-off workers said they learned of their fate when the lights on their ID badges began flashing red.
According to the article, layoffs at Google have already begun in the United States and will spread to other regions, maybe including India, in the coming weeks. The layoffs are happening at a time when the firm is struggling due to the current economic climate. Pichai has said explicitly that the layoffs were not “random” and were instead based on individual employees’ judgments of performance.
Sundar Pichai, CEO of Google and Alphabet is the first chief executive officer to accept a wage reduction in recent years.
CEO of Goldman Sachs Group David Solomon has been suffering as of late. His salary for 2022 has been reduced by nearly 30% to $25 million, as of last week. Solomon, CEO of Goldman Sachs, followed Morgan Stanley’s James Gorman in taking a wage reduction.
That’s not all, however. Tim Cook, Apple’s CEO, has also voluntarily accepted a 50% pay cut for 2023. As major tech companies including Microsoft, Google, Amazon, HP, Meta, and many more have announced massive layoffs, several CEOs have taken compensation cuts to help reduce costs and maybe prevent further layoffs.