Sun, Apr 22, 2012 - Page 11 News List

Google chairman received US$101m payment last year

Bloomberg

Google Inc chairman Eric Schmidt was paid US$101 million last year, including stock awards and options that vest over a four-year period, as he turned over control of the company to co-founder Larry Page.

Schmidt, who was paid US$313,219 in 2010, received US$55.6 million in share awards and US$38.1 million in options, the Mountain View, California-based company said on Friday in a regulatory filing.

The remaining US$7.2 million came from Schmidt’s US$937,500 salary and other compensation.

Schmidt, 56, who was named CEO in 2001, stepped down a year ago, putting Page back in charge of the world’s largest Internet search engine.

Page and co-founder Sergey Brin, Google’s largest shareholders, were each paid US$1 last year, part of a plan put in place in 2004.

While shareholders should monitor to ensure Schmidt’s incentives are in line with the company’s goals, his pay should not be seen as reward just for last year, said David Larcker, a corporate governance professor at Stanford’s Graduate School of Business.

“It’s a big enough number that it would get your attention, and it’s appropriate for shareholders to ask why it’s that big,” Larcker said in an interview.

“You’d want to feel pretty comfortable that that corresponds with his new position, the new things he wants to do. But this is a multiyear grant — it’s not like you’re going to see this every year,” he said.

Schmidt was granted the equity awards with a target value of US$100 million in connection with his transition last year to executive chairman, according to the filing.

The awards will vest over a four-year period with no performance requirements, the filing said.

“That kind of volatility in pay over time is unusual,” Larcker said.

“But the awards of stock and stock options, those are expected values — they could go up or down,” he added.

Apple Inc CEO Tim Cook also got a compensation package that vests over time.

Cook will receive pay for last year worth US$378 million, one of the biggest packages on record.

That includes US$376.2 million in shares, half of which will vest in five years and the remaining amount in 10 years, the Cupertino, California-based Apple said in January.

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