They control ~51% of voting power with shares thanks to owning ~85% of class B shares. They have had the benefit of someone else running the company for 8 years - and increasing the value of it - and now, when things are not looking great, it’s Sundar Pichai who gets the blame, and the focus on his compensation: and not those who set/approved this compensation.
The biggest winners of Pichai’s leadership have objectively been the shareholders: Google’s market cap increased by ~$890B since he took over as CEO in 2015, tripling the market cap/stock price of the company.
Larry and Sergey run this show: they simply hired someone else to do it for them. When things go well: they profit. When not so well - like now - someone else is on the hook and is the person criticised for how things go at Google; and it’s not them.
Those high ratios led Apple shareholders to request a pay cut of their CEO, and that was without poor performance or firing workers.
It was also a pay cut from a TCTC (Tim Cook total compensation) high of $99 million the year before, which seems mindbogglingly high but also make him out to be a bargain in comparison to Pichai.
Imagine CEO pay wasn't high.
They would still be reaping a huge portion of the benefit of shareholder-friendly (and less employee-friendly) policies, but escaping the blame.
Effectively, the amount of capital appreciation they've squeezed from layoffs dwarfs the CEO pay package, without any scrutiny.
Maybe they are micromanaging nightmare bosses, I wouldn't know. But from all I have seen, from the very start of Pichais tenure, he definitely deserves a huge chunk of the blame.
I don't think that Google's market cap increased by ~$890B because of Pichai, it increased despite him.
His pay is likely set years in advance, based on performance metrics. Sundar is riding the ads wave to huge payouts in spite of his massive failures, Google Plus, Stadia, devices, especially ChromeOS tablets, mismanaging Cloud, and on, and on...
What you’ve said is nonsensical. Being the victim of some harsh words forgotten the next day while never having to work another day in your life is not any kind of responsibility.
Do well? Get a massive bonus!
Do poorly? Get a massive bonus!
Do incredibly poorly? Leave with a golden parachute (aka massive bonus).
This is exploitation. The owning class for the owning class. The rich benefit and the workers are left exploited. Larry, Sergey, Pichai, they are all participating and benefiting at the cost of the workers. Any in-fighting and rivalry is at best a spectacle. At the end of the day, they all go home to the wealth, earned by their workers but enjoyed by the owners, and the owners alone, whether you call them bosses or shareholders, they are all simply exploiters.
Good grief.
The highest paid workers on the planet, work for google. You should spread this communist blather at the proper place, coffee shops where workers aren't paid a living wage.
Not people able to retire wealthy, is they invest their salary coreectly.
Talk about entitlement.
Unpopular opinion, but he should. Google has pretty much been uninventing cesspool since he became the CEO. The only thing that are up are profits.
Literally his job. End of story.
Sundar is getting new equity grants based on his "performance". That's not the same.
As the ultimate owners of the company by shareholder votes, they approved the compensation of Sundar, and are the decision makers.
If I’m ignoring morality and just pretending I own the company and want to be richer, my opinion would be: if I think there is someone out there who will do a better job than my CEO and they are available, hire them no matter how much it costs. Whatever I’m paying them is peanuts compared to their impact on the company’s market cap. Nowhere in my option space is “keep the same sub-par CEO but pay them less”, that’s penny-wise and pound-foolish thinking.
(Since we’re bringing up companies nobody else mentioned)
By the way, return (not including dividends) is about the same between AAPL and MSFT since Nadella took over on February 2014 which is simply amazing if you think about the differences between the two companies.
Apple PE ratio: 28
2019 Net Income - $36B
2022 Net Income - $60B
If was part of the workforce I would be even more pissed just at the company itself. Laying off 12k and cuts in perks after $60B in net income.
This cuts both ways. How many of those laid off had any connection to that profit?
Take HR. Total cost center. By this logic they shouldn't get any piece of the pie. But in reality, without *good* HR, a company can be a shitty place to work. HR is just one example. Many others out there.
The decision whether laying off those 12000 people improves or hurts the company is the same no matter if you have $60B net income or $6B net loss. Being hugely profitable doesn't make it worth keeping more people than you need, just as having losses doesn't make it worth firing people you do need.
I understand this is the thinking that runs the economy, and it's very much a shame. With 12k unneeded people you think the work they were doing disappears? No, the people still there (that brought in records profits) now get to shoulder that work.
Do you think all 12k of those people were the worst or maybe some were older and more experiences, being paid better than a recent college grad? It's just pure greed and the people there should be pissed off at the CEO and the board.
For comparison, Tim Cook made $99M in 2022, and was cut to $49M "target compensation" in 2023 (but he can actually make more, e.g. his 2022 wound up 18% higher than target), and the following 2 years remain to be decided.
So sure Googlers can be angry, but it seems like the message is getting lost that this is compensation for 3 years (not 1) and a meaningful decrease (not increase). It could well wind up being an even bigger decrease than Tim Cook's over the next 3 years, yet Tim is getting praise for taking a cut while people are angry at Sundar?
Seems like the real problem might be that Google makes 3-year CEO grants that people then totally misunderstand.
Nevertheless, I still think the outrage is justified. Just not on financial grounds.
The moment you lose the vision or drop the ball, you’re doomed.
The C-suite works for the board and the major shareholders. They'll immediately throw workers under the bus if told to do so. That's their job. They'll be fired if they don't. They knew it from day one.
Almost everybody agrees that his actions are extreme and often stupendous. But that's not the point. The point is that he fired 80% and Twitter is still operational.
Also, Twitter 5 times smaller than before seems to fairly rapidly change/add features, whilst old Twitter never shipped anything.
Nobody should adapt these crazy tactics, but it's an (extreme) demonstration of fluff and discovering core value. You don't have to go Musk mode, but Musk demonstrated the effect of a decimation of the work force.
That suggests to CEOs that one might go half-Musk mode. There's a lot of room to cut when you previously hired entire villages each year. Not 80%. But 30%? Why not. 40%? Maybe.
Consider Facebook's "year of optimization". They hired so many people that it takes them a year to figure our what all these people are even doing. What you have normalized as "normal times" were in fact dot com boom times.
If I was an employee who cared about Google’s vision, or what other services they could offer the world, the I’d probably be angry at the squandered opportunity too.
How many product managers, marketers, TPMs, DEI personnel, and layers and layers of directors and VPs does Google need to keep Search cranking? Answer: far, far fewer.
For me it wasn't just about salary, but I really believed in the vision Eric Schmidt was selling (don't be evil). Since then Google is just going down in morals and renegged on its own promises.
As I've grown up, now at 40 I understand more things about the world. In the case of private companies, I learned long ago not to get enamoured with them. Unless I am the owner, I work only for my paycheck. I've been in great companies, and some of them have paid me dearly. And I will always do my best for what I am paid.
But long gone are my days of pushing myself even sacrificing my health, family relationships and personal wellbeing for a company. In the end, they can and will fire me tomorrow if it improves the bottom line.
Also, CEO compensation is effectively between the shareholders and the CEO - if the CEO is making the shareholders happy and they want to gift him $200m for no good reason, well, it's their right to do so, it's their money to spend or waste as they wish, not the employee's.
Surely it's just for keeping score
Meanwhile Google's "raters", the army of workers who do the hard work of moderating and testing Google's platforms are getting paid crumbs in comparison: https://www.npr.org/2023/03/25/1166059832/googles-ghost-work...
With my last job doing SWE for a bank, I know for a fact that my code saved the company hundreds of thousands dollars just from one project, and I know for a fact that some of my other code oversaw over a billion dollars in loan volume annually.
And what do I get come review time? No salary change and a variable bonus. It's fucking bullshit. These motherfuckers are getting rich off my back and they don't even share. Even 5% of revenue split across my entire team would be a million-plus or everyone, but nooooooooo we cant have that now can we? Whatever will the pathetic shareholders ever do then???
Sales, Marketing, and GTM are absolutely generating 100x - 1000x their salary if they take sole ownership of a project like you are doing.
SWEs are good are solving problems, but other people determine which problems to pay attention to, and how much investment to make in them.
Start a company then.
Pay is not determined by value, it's determined by leverage. The CEO pays himself the most money because he controls the company, he's not going to pay anyone lower than him more than he makes.
SWEs at FAANG and other top tier tech companies are at a completely different level of compensation. I don’t think they’re underpaid.
High frequency trading / propriety trading firms (buy-side) make FANG TC look like public teacher TC.
400-600K USD for 22-year old new grads. With 5 YOE, TC of $1M+ is not uncommon . If you do really well, $10M+ annual TC is possible with 5-10 YOE.
Even mid-career employees get fixed % cut of company profits. I’m not even talking about the company partners either.
So yes, FANG SWEs are underpaid.
Similar to other professions - engineering and medicine for example - we have a career which requires a dedication to constant learning.
We build systems which allow companies to generate billions in revenue and deserve a slice of the pie.
You're the operator of a machine that exploits on a planetary scale. You might be awesome at operating this machine, but you don't supply the actual value that leads to those billions.
>In all, it takes about eight to ten years to become a professional engineer, depending on whether you decide to get a master's degree.
>Doctors must complete a four-year undergraduate program, along with four years in medical school and three to seven years in a residency program to learn the specialty they chose to pursue. In other words, it takes between 10 to 14 years to become a fully licensed doctor.
So do adjunct professors, and they're paid peanuts.
> We build systems which allow companies to generate billions in revenue and deserve a slice of the pie.
Capitalists don't care what you think you deserve. Their morality says if the labor market situation means they can get away with paying you peanuts, it's righteous for them to do so, regardless if you do things that "allow companies to generate billions in revenue."
The people who care about getting people paid what they deserve will play a tiny violin for you, since most workers have it way, way worse than software engineers have it now.
95% of that is chasing dumb fads, pop cultures, pointless shiny objects, technology fetishes
Unfortunately (in my opinion), that's not how it is. Given our reality, I think I agree with you that SWEs do deserve that slice of that pie. But I very much wish that more people placed greater priority on benefiting others/society instead.
Those other professions don't get paid nearly as much though
...and deserve a fair slice of the pie.
It is very easy to find someone else to be a "rater". Certainly easier than it is to find another software engineer
You can argue SWE wages are inflated but comparing them to someone testing whether YouTube search returns the right results is inaccurate and feels disingenuous
"Fairness" is a vague concept which nobody can agree on. It's definitely not as easily observable as, say, the marginal cost of replacing a worker
---------------
1. This also happens to be a helpful framework for establishing "value", beyond the context of labor. For instance: how much is a company worth? The amount it would cost to replace them if they were taken out of the picture
The situation is crazy right now. Engineers are not overpaid. The other jobs should have a better pay, while the CEOs should be paid a lot less.
You know who is really overpaid? Landlords. They are the reason everything in Silicon Valley is so damn expensive. I'd gladly take a pay cut if the "landlord association of america" would collectively take a pay cut of their own. That will make this place slightly more affordable.
You know who else is really overpaid? A good chunk of the healthcare industry. My healthcare expenses are by far my highest money drain other than rent.
If engineers are to be paid less, then where should the profit go?
IMHO the reason is because American tech companies are located in cities with insane costs of living.
If Silicon Valley wants to save some serious money on salary, bribe and cajole state and local governments to change housing policy.
Google is a money printing machine having net annual income of ~$60B? It's profit per employee is utterly insane. Yet despite that there was a "need" for layoffs.
You'll find no shortage of defenders for the layoffs. Talk of cutting "the fat". Tell me: who decides what most of these people work on? Is it the individual? Or leadership? How amny executive leaders have gone as a result of need for belt-tightening? And whatever you think of Sunday (personally: not a lot), what makes this one man worth $226M/year? Sending out the traditional "thoughts and prayers" and "full responsibility" email seems to have not hurt him in the slightest.
These layoffs are nothin gmore than an attack on labor costs. It makes the remaining employees work harder (fearing further layoffs) as job functions of those eliminated are added to them rather than backfilled, less likely to ask for or get raises and it will make hiring cheaper as there is more avilable labor.
Just like the Steve Jobs anti-poaching collusion, this is a coordinated effort. Despite efforts to appear otherwise, these tech companies aren't on your side. They're on the shareholders side. You are simply an unfortunate line item under "expenses". So at least people are learning the lesson that they are completely expendable and there is no loyalty so absolutely no loyalty should be given to the company. Loyalty has to be reciprocal.
It actually doesn't have to be this way [1]. Additionally, layoffs tend to be traumatic for both the people affected and those that remain. Cost savings are overstated once you factor in severance packages, possible litigation, psychic damage to remaining employees and the cultural loss of trust from the "distraction".
Any genuine need to reduce costs could be better handled by across the board pay cuts.
[1]: https://www.polygon.com/2013/7/5/4496512/why-nintendos-sator...
You can describe it as being too high in your opinion, or not worth it in your opinion, but that's completely different than pretending that its not being set by the market (and approved by the board) weighing myriad inputs. And btw, one of those inputs is...the ability to successfully tighten the belt and restructure costs to hit numbers.
Make the case to fire Pichai if you want, I'm fine with that, but recognize that you're going to pay "replacement cost" at the same rate or higher for someone else. That's showbiz baby.
How do you know this is true? This is an assertion you are making, but the evidence is to the contrary given significantly lower compensation for Microsoft or Apple's CEO.
They can "fuck around and find out" all they want because they know that they are so powerful they will never have to find out.
They know they'll never have to face a tech union or deal with laborers sitting at the big boys negotiating table.
One of the first things that someone that gets laid off tries to do is understand the reasons for the conditions that prompted the lay-off.
One could -- somewhat reasonably -- divide the number of yearly salaries into 226 million and become quite outraged.
Is a single CEO worth that many jobs? That's the true question that creates outrage, not whether or not he was paid well.
If the jobs were never at stake the outrage would not exist.
I explain this without any outrage myself in this matter; a contractual payout has little to do with whatever current employment climate may exist -- but I can understand where the outrage originates.
This question is a sign of not understanding how business works.
Apple does actually respect it's shareholders...probably because it's hard to hoodwink Berkshire Hathaway.
https://www.epsilontheory.com/stock-buybacks-and-the-monetiz...
if you don't like how Google works, vote with your feet
you'll never own enough shares to get on the mic at an annual meeting, leaving is your only recourse
How much of Google’s valuation is Sundar, how much is inflation of asset values to keep asset owners ahead of everyone else, how much is a decade of cheap money?
/brain explodes
Also imagine many people on the internet hating on you. I'm not at all sure that's worth a million a week.
Rich people still have health problems, interpersonal problems, and also: everyone wants their money.
Source: I have some rich friends.
200M over 3 years for the CEO of the most consequential tech company on the planet is peanuts. Pop artists make similar money scantily clad and squeezing autotune
Which pop artist is making anywhere near 220M in take home over 3 years? 70M/year is Taylor Swift numbers, and shes the highest earning female artist ever.
CEO pay ratio is fucked in the US in any realm. It's just because those at the top have more leverage, they don't necessarily have more value.
Said differently: I'm not saying they're right or wrong, just pointing out that they can also be upset over pop artists' pay
What motivation will Sundar have if you pay him 200K?
Also, minimizing the effort it takes to become a pop artist and being prude is such a cliche.
Satya Nadella - 54M [2]
[1] https://www1.salary.com/Tim-Cook-Salary-Bonus-Stock-Options-...
[2] https://www1.salary.com/Satya-Nadella-Salary-Bonus-Stock-Opt...
https://apnews.com/article/virus-outbreak-financial-markets-...
Pichai is not on the list because he gets paid big every 3 years I think. It's not a good look either way.
The layoffs and reduction in perks were sorely needed in Big Tech given all the fat that has been milking it for years.
The CEO pay is definitely egregious and should be called out (and those at other companies should also be called out).
