Alphabet CEO Sundar Pichai earned $226 million last year, but in January he e-mailed staff to announce a savage round of 12,000 job cuts.
In the message, the recently enriched Pichai said his decimation of the workforce “weighs heavily on me,” and reassured soon-to-be unemployed staff that he was taking “full responsibility for the decisions that led us here.”
Difficult decisions ahead
Pichai and senior staff at other tech firms, including Meta, are collecting fat paychecks even as ordinary workers take the brunt of swingeing cuts.
“We’ve decided to reduce our workforce by approximately 12,000 roles,” wrote Pichai in January. “This will mean saying goodbye to some incredibly talented people we worked hard to hire and have loved working with. I’m deeply sorry for that.
“The fact that these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here.”
In 2022, Pichai collected a healthy £2 million annual salary and $6 million for personal security, fattened by a bumper $200+ million triennial stock award. Pichai now collects more than 808 times the average Google worker’s salary.
Google $GOOG announced plans to eliminate 12,000 positions (6% of its workforce) but its CEO Sundar Pichai makes over $200 million (over 800 times the median employee's pay)
Is a $200 million salary justified due to being a valuable asset to the company?
— Andrew Lokenauth (@FluentInFinance) April 22, 2023
Alphabet’s boardroom closely ties Pichai’s compensation to its short-term financial success, incentivizing the CEO to make aggressive cost-savings. In the ‘Corporatism 101’ handbook, one of the fastest ways to achieve that is to cut staff. Pichai has been instructed that if he can steer Alphabet to the 75th percentile on the S&P 100, he will receive a further $100 million bonus on top of everything else.
The incentivization could spell yet more cuts in future. Pichai will have to consider what weighs most heavily; the weight of further cuts or the weight of his own wallet.
Workers are angry
Pichai is far from alone in receiving bumper pay packages. Staff in Silicon Valley are increasingly incensed by the disconnect between executives and the rest of the workforce.
In a fractious Q&A call on Thursday last week, which was later leaked to media outlets including Vox, Meta CEO Mark Zuckerberg was grilled by employees angered about ongoing job cuts and the firm’s so-called “Year of Efficiency.”
In particular, employees questioned why Meta executives have avoided any consequences for their mismanagement of the firm. Executives have remained safely in position even as 4,000 staff members were cut from Meta’s payroll in April.
For his part, Zuckerberg – who paid himself a nominal $1 last year – attempted to shoulder the bulk of the blame. He did, however, make reference to macroeconomic conditions and “unprecedented volatility.” And while Zuck’s salary is unequivocally modest, his million-dollar expense account is less so.
In the financial black parade
You don’t need to look much further afield than the Zuck, to find a cavalcade of Meta executives who continue to collect hefty bonuses for debatable efforts. This, even as the company flounders directionless, flip-flopping from the metaverse to AI.
Newly-appointed CFO Susan Li is among the C-level class doing well at Meta, having received a tidy bonus of $575,613. She was not the best compensated of the team, however. CPO Christopher Cox collected a bonus of $940,214, while COO Javier Olivan had to settle with only $786,552 to supplement his salary. CTO Andrew Bosworth received $714,588 and outgoing COO Sheryl Sandberg, who left the firm in September, received £298,385.
“We’re in a different world, and we needed to make some changes,” Zuckerberg told staff during his opening statements last Thursday.
The comment certainly contained a hint of truth: from an employee perspective, untouchable C-level executives appear to operate on another planet.