After looking for a nearly a year, Google has finally found a new chief financial officer to replace outgoing CFO George Reyes. So who’s job will it be to count all of Google’s cash? The lucky winner of what must have been one of the most intense executive searches of the year is Patrick Pichette, the president of operations at Bell Canada.
Google went with a relative unknown here, but Pichette (a Rhodes Scholar and former McKinsey consultant) must have done well on the brain teasers Google famously asks all incoming employees. Pichette will be counting some of his own cash. At today’s stock price of $532, Pichette is looking at $1.7 million just in restricted stock a year from now. Add a $500,000 signing bonus, plus the here’s-another-$500,000-for sticking-around-six–whole-months bonus, plus his $450,000 base salary, plus another regular bonus of as much as $1.125 million and the total comes to $4.3 million. And that is not even counting the stock options. (In comparison, last year George Reyes brought home $5.1 million in total compensation. Sergey Brin, Larry Page, and Eric Schmidt each receive $1 in base salary, although Schmidt’s personal security detail cost the company $475,000 last year and is listed as part of his total comp).
The compensation details outlined in Pichette’s offer letter are the following:
—Patrick’s annual base salary will be $450,000 and his discretionary target bonus percentage will be 150% of his annual base salary.
—Google has agreed to pay Patrick a special one-time sign-on bonus of $500,000 (taxed as supplemental income).
—Google has agreed to pay Patrick an additional special bonus of $500,000 (taxed as supplemental income) upon completion of six months of employment. In the event that Patrick’s employment is terminated by Google prior to the end of this six-month period, this additional bonus will be paid out in full within 30 days from the date of termination.
—If Patrick terminates his employment with Google before the one year anniversary of his start date then Patrick will be required to repay the special bonus amounts described above, prorated for time spent at Google.
Google has agreed to grant Patrick four new hire equity grants:
— stock option to purchase 11,112 shares of the Google’s Class A common stock pursuant to Google’s 2004 Stock Plan. The stock option will vest at a rate of 25% on the date one year after Patrick commences employment and will vest an additional 2.083% each month thereafter, for a total vesting period of 48 months.
—5,556 Google restricted stock units (GSUs) pursuant to Google’s 2004 Stock Plan. The GSUs will vest at a rate of 25% on the date one year after Patrick commences employment and will vest an additional 25% each year thereafter, for a total vesting period of four years.
—910 GSUs pursuant to Google’s 2004 Stock Plan. The GSUs will vest at a rate of 100% on the date six months after Patrick commences employment. In the event Patrick’s employment is terminated (other than as a result of Patrick’s resignation) prior to the six month vesting date, this GSU grant will immediately vest.
—910 GSUs pursuant to Google’s 2004 Stock Plan. The GSUs will vest at a rate of 100% on the date 12 months after Patrick commences employment. In the event Patrick’s employment is terminated (other than as a result of Patrick’s resignation) after six months but prior to the 12 month vesting date, this GSU grant will immediately vest.
Google will assist Patrick with relocation-related expenses pursuant to Google’s policy with respect to the relocation of officers in North America.
In accordance with Google’s standard equity grant policies, Patrick’s options and GSUs will be granted on the first Wednesday after Patrick commences employment with Google.
Patrick will also participate in the compensation and benefit programs generally available to Google’s executive officers.
C’mon Erick, don’t you make more than that at TechCrunch? : )
Given the level of responsibility at what is arguably the world’s most important company, I didn’t think this was out of whack with reason. On the contrary people coming on with Google now missed the IPO windfall, and thus you’d expect they’d want a pretty hefty signing bonus to make up for that.
HAHAHA….. Wow, this guy is loaded and all he get to do is count money….*cue pink floyd now*
Whew! 500K signing bonus. I recently switched my job and after negotiation got 5K
I need to stop wasting my time on TC and work hard at job!
Wow… lots of $$$ indeed!!!
Whose job…
Not bad. He might be able to afford a decent room in Atherton.
Is there a pool for how long he lasts? Given the state Bell Canada is in and Google having a substantially different culture – I’m guessing 2.5 years.
Wow! Nice stocks and nice bonus..
His salary is just twice that of TechCrunch editors, ofcourse with out a Cat. [ lol
]
Cheers, Nag
Lucky guy!!
http://easysumm...y.blogspot.com/
Am I the only one that finds this on the low end? This guy will be the chief money handler for Google, and yet I’m guessing he’s out-stocked even by the shlump who organized their paperclips in the early days. Seriously, I’d expect that for this top position they’d try to bring him more up to par with the early employees.
Then again, I’m just bitter that the people that work on version 1 of a product (i.e., pre-IPO) make out 100s or 1000s of times better than everyone else that then works on versions 2 through 200. Is only the pre-IPO work valuable?
Wouldn’t it be awesome if us techies all refused to work at post-IPO companies unless we received stock commensurate with the early employees. Holy crap, maybe we need to organize!
“thats all”- Get a backbone and join an early stage company instead of complaining that you deserve the same for less risk. Idiot.
$1 of base salary to Google founders ???
This company really needs a Better finance guy to look over the salary structure…
Even if they have to pay $4.3 Mn to just one buddy for doing the financial rebalancing,they reaaaaally need him……
BTW $4.3 Mn is quite enough to fund even 100 early stage startups,i suppose..
Unless the risk is 100x greater (e.g., the startup pays you 1/100th your usual salary, or you’re 100x more likely to be eaten by a crocodile) then it’s disproportionate. I do believe the statements of “risk” are pretty tired at this point. Having done both startups and non-startups, I’ve seen that the startup is hardly a risk in any conventional sense of the word. There’s just more variability in the potential outcome.
In actuality, it’s quite simple: companies give out rewards when they’re desperate to hire or retain, and otherwise the folks in charge keep the cash to themselves. Nothing new there.
companies give out rewards when they’re desperate to hire or retain, and otherwise the folks in charge keep the cash to themselves. Nothing new there.
Nicely put….though I think a simplication. There are also stock issue and a very market-inefficient board incentive factor where boards tend to reward other key players so they will reciprocate. This is the kind of thing people like Carl Icahn correctly bitch about, and in his case profit from. I see no reason to think that is happening here though, and agree with that’s all that this is not excessive by any means assuming the guy is going to be a “great” CFO for Google’s massive hoards of money and potential stock and money liabilities.
In the fallout of Enron and Worldcom this shouldn’t surprise anyone. C-level executives, especially the CFO and CEO, sign off on the financial statements each year. This means they are legally responsible for the accuracy of those statements. If anything goes wrong they can end up in jail.
PS Don’t forget that he’ll be handling BILLIONS of dollars. You really need to compensate a guy well or he’ll go Office Space on you and siphon off a lot of money in a hurry.
Compensation makes for a catchy title, but let’s dig a little deeper and discuss that this guys entire past experience has been with telcos and telco consulting. To me, that is the real story developing.
$500,000 Bonus! Great, that’s taxable at 40% – So net, is really $300,000.
Then after the 6-Month “Feeling Around Period” — Taxed again at 40% $300,000.
This is definitely above the minimum wage tax bracket — so, Yes, I’ll take a bit more for the $450,000 base yearly salary too…..Oh, & don’t forget the fact that I’m going to take some of your interest gains on your stock as well….
Hmmm, what else do I want……
Even after all this, Pichette will still be able to live good
All for a bit of number crunching…..and he probably won’t even be doing that himself……
Anyone else think he looks like Mr. Rogers?
I believe your math may be off. His bonus is 150% of his annual salary. 150% target bonus rate = 450k * 150% = 675k. Your number of 1.125M is 450k * 250%, which would be his total salary.
That should be enough to buy a new suit and tie. He needs it.
@19: You read my mind. First think I thought was, id Google cloning Fred Rogers now?
Yes. Definitely Fred Rogers.
haha, he just lost 50% of his stock options