UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(A) of the Securities
Exchange Act of 1934 (Amendment No.)
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Definitive
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Definitive
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Soliciting
Material Pursuant to §240.14a-12 |
ALPHABET INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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1600
Amphitheatre Parkway
Mountain
View, California 94043
(650) 253-0000 |
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DEAR STOCKHOLDERS
|
We are pleased to invite you to participate in our 2023 Annual
Meeting of Stockholders (Annual Meeting) to be held on Friday, June
2, 2023, at 9:00 a.m., Pacific Time. We have adopted a virtual
format for our Annual Meeting to provide a consistent experience to
all stockholders regardless of location.
Alphabet stockholders of Class A or Class B common stock (or their
proxy holders) as of the close of business on the record date,
April 4, 2023 (Record Date), can participate in and vote at our
Annual Meeting by visiting www.virtualshareholdermeeting.com/GOOGL23
and entering the 16-digit control number included in your Notice of
Internet Availability of Proxy Materials (Notice), voting
instruction form, or proxy card. All others may view the Annual
Meeting through our Investor Relations YouTube channel at
www.youtube.com/c/AlphabetIR.
Further details regarding participation in the Annual Meeting and
the business to be conducted are described in the Notice you
received in the mail and in this proxy statement. We have also made
available a copy of our 2022 Annual Report to Stockholders (Annual
Report) with this proxy statement. We encourage you to read our
Annual Report. It includes our audited financial statements and
provides information about our business.
We have elected to provide access to our proxy materials online
under the U.S. Securities and Exchange Commission’s “notice and
access” rules. We are constantly focused on improving the ways
people connect with information, and believe that providing our
proxy materials online increases the ability of our stockholders to
connect with the information they need, while reducing the
environmental impact of our Annual Meeting.
Your vote is important. Whether or not you plan to participate in
the Annual Meeting, we hope you will vote as soon as possible. You
may vote online, as well as by telephone, or, if you requested to
receive printed proxy materials, by mailing a proxy or voting
instruction form. Please review the instructions on each of your
voting options described in this proxy statement and in the Notice
you received in the mail. For more information, please see the
Questions and Answers section of this proxy statement or visit the
2023 Annual Meeting section of our Investor Relations website at
https://abc.xyz/investor/other/annual-meeting/.
Thank you for your ongoing support of, and continued interest in,
Alphabet.
Sincerely,
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SUNDAR PICHAI |
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JOHN L. HENNESSY |
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CHIEF
EXECUTIVE
OFFICER |
|
CHAIR
OF THE
BOARD OF DIRECTORS |
APRIL 21, 2023
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LETTER FROM THE CHAIR
OF THE BOARD OF DIRECTORS
|
Dear Fellow Stockholders,
In recent years, there has been no shortage of challenges to occupy
the world’s attention. A global pandemic, supply chain disruptions,
and a war in Europe have shown the power of human resilience and
the importance of innovation.
Against this backdrop, Alphabet continues to deliver helpful
services for people and partners around the world, while investing
in the technologies that are foundational to the future. This
remains our focus and responsibility today and in the coming
years.
For more than six years, Alphabet has led the way in advancing the
field of AI. Our AI-first strategy aims to find technology
breakthroughs that will deliver significant societal benefits. That
vision has motivated years of research and product work, as well as
investments in the best technical talent.
Alphabet has long translated technical leaps into helpful products
for billions of people around the world. These innovations —
particularly in AI — have already improved many of the company’s
core products over the past few years, and there’s more to come in
the months ahead. Importantly, the company is focused on developing
this technology responsibly. Alphabet was among the first to
develop and adopt AI Principles and to implement an AI governance
structure, which is important for the long-term development of this
technology. As this work continues, the company is committed to
investing responsibly for long-term growth, and to finding areas
where it can operate more cost effectively.
Beyond that, over the past year, our Board has redoubled its
efforts to engage on many of the issues most important to our
company, and environmental, social and governance topics have been
front and center in many of those conversations. In my role as
Chair of the Alphabet Board, I have worked closely with our legal
and investor relations teams to understand and respond to investor
perspectives on these matters. Our Board is pleased to see Alphabet
increase transparency across some of these areas; as just two
examples, our recently completed civil rights audit and our
disclosure of water metrics for Google-owned data centers. Our
senior management team oversees this work and provides regular
updates to our Board, and we actively prioritize our oversight
duties and frequently engage with leaders at the company on matters
of significant importance.
Our Board believes that a company building products for billions of
people around the world benefits from a workforce with a diversity
of skills, backgrounds, and cultural experiences. Our Board is no
different. Today, sixty-four percent of our Board comprises
directors who are female or from an underrepresented community. Our
robust director selection process most recently led to the
appointment of Marty Chávez in July. Marty brings years of deep
experience from the worlds of finance and technology to our Board’s
Audit and Compliance Committee. He joins Frances Arnold and Robin
Washington as Board members who have been appointed in the past
five years, and we are fortunate to have him on our Board.
Looking ahead, it’s an exciting time for technology, full of
opportunity for our company and the broader industry. Alphabet
remains among the top R&D investors in the world, and these
investments have yielded glimpses of the future, from our work in
quantum computing to our many AI-supported breakthroughs.
The importance of technology companies to our society has never
been more profound, and our Board is proud of the meaningful
contributions by our company in especially challenging times. As
one example, in May of 2022, Google was honored with the first ever
Ukrainian “Peace Prize” award introduced by President Zelenskyy for
its partnership on cybersecurity and humanitarian efforts to help
the people of Ukraine.
Since our company’s founding, we have been committed to being
helpful to people around the world by building products that
support a better future and by earning their trust every day. For
our Board, overseeing that mission is why we exist — and we’re
deeply grateful that our stockholders help make that possible.
Very truly yours,
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JOHN L. HENNESSY
CHAIR
OF THE BOARD OF
DIRECTORS |
Notice of 2023 Annual Meeting of Stockholders
|
DATE
AND TIME |
VIRTUAL
MEETING SITE |
FRIDAY,
JUNE 2, 2023
9:00 a.m., Pacific Time |
www.virtualshareholdermeeting.com/GOOGL23 |
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WHO
CAN VOTE |
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Alphabet
stockholders of Class A or Class B common stock (or their proxy
holders) as of the close of business on April 4, 2023 (Record
Date) |
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ITEMS OF BUSINESS AND BOARD VOTING RECOMMENDATION |
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1. |
Election of Directors: Larry Page, Sergey Brin, Sundar Pichai, John
L. Hennessy, Frances H. Arnold, R. Martin “Marty” Chávez, L. John
Doerr, Roger W. Ferguson Jr., Ann Mather, K. Ram Shriram, and Robin
L. Washington |
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FOR each of the
nominees |
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2. |
Ratification of appointment of Ernst & Young LLP as Alphabet’s
independent registered public accounting firm for the fiscal year
ending December 31, 2023 |
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FOR |
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3. |
Amendment and restatement of Alphabet’s Amended and Restated 2021
Stock Plan to increase the share reserve by 170,000,000 (post-stock
split) shares of Class C capital stock |
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FOR |
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4. |
Advisory vote to approve compensation awarded to named executive
officers |
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FOR |
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5. |
Advisory vote on the frequency of advisory votes to approve
compensation awarded to named executive officers |
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3 YEARS |
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6. |
Stockholder proposals, if properly presented |
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AGAINST |
And to consider such other business as may properly come before the
Annual Meeting and any postponements or adjournments thereof.
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By order of
the Board of Directors, |
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SUNDAR PICHAI
Chief
Executive Officer |
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JOHN L. HENNESSY
Chair
of the Board
of Directors |
REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR
WAYS:
Please refer to the enclosed proxy materials or the information
forwarded by your bank, broker, or other holder of record to see
which voting methods are available to you.
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ONLINE
Vote your shares at www.proxyvote.com. Have your
Notice, voting instruction form, or proxy card for the 16-digit
control number needed to vote.
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In advance
of the Annual
Meeting |
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BY TELEPHONE
Call toll-free number 1-800-690-6903.
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BY MAIL
Sign, date, and return your proxy card in the enclosed
envelope.
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During the
Annual
Meeting |
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ONLINE
See page 111 for details on voting your shares during the Annual
Meeting through www.virtualshareholdermeeting.com/GOOGL23.
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This Notice of 2023 Annual Meeting of Stockholders, proxy
statement, and form of proxy card are being distributed and made
available on or about April 21, 2023. |
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This proxy statement includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding our environmental, social, and
governance goals (ESG), commitments, and strategies and our
executive compensation program. These forward-looking statements
are based on current expectations and assumptions that are subject
to risks and uncertainties, which could cause our actual results to
differ materially from those reflected in the forward-looking
statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in our
most recently filed periodic report on Form 10-K. We undertake no
obligation to revise or publicly release the results of any
revision to these forward-looking statements, which speak as of the
respective date of this proxy statement, except as required by law.
Given these risks and uncertainties, readers are cautioned not to
place undue reliance on such forward-looking statements. |
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In this proxy statement, the words “Alphabet,” the “company,” “we,”
“our,” “ours,” “us,” and similar terms refer to Alphabet Inc. and
its consolidated subsidiaries, unless the context indicates
otherwise, and the word “Google” refers to Google LLC, a wholly
owned subsidiary of Alphabet. |
ALPHABET ● 2023 PROXY
STATEMENT 5
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| |
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IMPORTANT NOTICE REGARDING
INTERNET AVAILABILITY OF PROXY
MATERIALS
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This proxy statement and our 2022 Annual Report to Stockholders,
which includes our Annual Report on Form 10-K for the fiscal year
ended December 31, 2022, are available at https://abc.xyz/investor/other/annual-meeting/.
ALPHABET ● 2023 PROXY
STATEMENT 6
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INCORPORATION BY REFERENCE
|
To the extent that this proxy statement has been or will be
specifically incorporated by reference into any other filing of
Alphabet under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended (Exchange Act), the
sections of this proxy statement titled “Report of the Audit and
Compliance Committee of the Board of Directors” (to the extent
permitted by the rules of the U.S. Securities and Exchange
Commission (SEC)), “Executive Compensation—Leadership Development,
Inclusion and Compensation Committee Report” and “Executive
Compensation—Alphabet Pay vs. Performance” shall not be deemed to
be so incorporated, unless specifically stated otherwise in such
filing.
This proxy statement includes references to websites, website
addresses, and additional materials, including reports and blogs,
found on those websites. The content of any websites and materials
named, hyperlinked, or otherwise referenced in this proxy statement
are not incorporated by reference into this proxy statement on
Schedule 14A or in any other report or document we file with the
SEC, and any references to such websites and materials are intended
to be inactive textual references only.
ALPHABET ● 2023 PROXY
STATEMENT 7
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2023 PROXY STATEMENT SUMMARY AND HIGHLIGHTS
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THIS SECTION HIGHLIGHTS SELECTED INFORMATION AND DOES NOT CONTAIN
ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER BEFORE VOTING. YOU
SHOULD READ THE ENTIRE PROXY STATEMENT CAREFULLY BEFORE VOTING.
— 2022
BUSINESS HIGHLIGHTS
In 2022 we continued to provide helpful products and services for
our users and partners while investing in priority areas like
artificial intelligence. We positioned ourselves for sustained
leadership in developing and innovating in AI to power our products
and better serve our diverse customers across our platforms. In a
challenging macroeconomic and operating environment, we renewed our
focus on investing with discipline, including prioritization of our
product investments across Google and Other Bets, and defining
areas where we can operate more cost effectively.
The graphs below match our Class A and Class C’s cumulative 5-year
total stockholder returns on common stock and capital stock,
respectively, with the cumulative total returns of the S&P 500
index, the NASDAQ Composite index, and the RDG Internet Composite
index. The graphs track the performance of a $100 investment in our
common stock and capital stock, respectively, and in each index
(with the reinvestment of all dividends) from December 31, 2017 to
December 31, 2022. The returns shown are based on historical
results and are not intended to suggest future performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
ALPHABET INC. CLASS A COMMON STOCK
Among Alphabet Inc., the S&P 500 Index,
the NASDAQ Composite Index and the RDG Internet Composite Index
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
ALPHABET INC. CLASS C CAPITAL STOCK
Among Alphabet Inc., the S&P 500 Index,
the NASDAQ Composite Index and the RDG Internet Composite Index
*$100 invested on December 31, 2017 in stock or index, including
reinvestment of dividends.
Copyright© 2023 S&P, a division of The McGraw-Hill Companies
Inc. All rights reserved.
ALPHABET ● 2023 PROXY
STATEMENT 8
— ALPHABET’S
BOARD OF DIRECTORS
Our Board believes that having a mix of directors with
complementary qualifications, expertise, experience, backgrounds,
and attributes is essential to meeting its multifaceted oversight
responsibilities, representing the best interests of our
stockholders, and providing practical insights and diverse
perspectives.
ALPHABET ● 2023 PROXY
STATEMENT 9
The following table provides summary information about each
director nominee as of April 4, 2023.
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Director
Since |
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Membership
on
Standing Committees |
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Other
Public
Boards(1) |
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Name |
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Age |
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Independent |
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ACC |
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LDICC |
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NCGC |
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EC |
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Larry
Page
Co-Founder |
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50 |
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1998 |
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0 |
Sergey
Brin
Co-Founder |
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49 |
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1998 |
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0 |
Sundar
Pichai
Chief Executive Officer, Alphabet and Google |
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50 |
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2017 |
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0 |
John
L. Hennessy (Chair)
Former President of Stanford University |
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70 |
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2004 |
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0 |
Frances
H. Arnold
Linus Pauling Professor of Chemical Engineering, Bioengineering
and Biochemistry at California Institute of
Technology |
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66 |
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2019 |
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1 |
R.
Martin “Marty” Chávez
Partner and Vice Chairman of Sixth Street
Partners |
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59 |
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2022 |
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1 |
L.
John Doerr
General Partner and Chairman of Kleiner Perkins |
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71 |
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1999 |
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2 |
Roger
W. Ferguson Jr.
Former President and Chief Executive Officer of
TIAA |
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71 |
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2016 |
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2 |
Ann
Mather
Former Executive Vice President and Chief Financial Officer of
Pixar |
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62 |
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2005 |
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 |
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3 |
K.
Ram Shriram
Managing Partner of Sherpalo Ventures |
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66 |
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1998 |
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0 |
Robin
L. Washington
Former Executive Vice President and Chief Financial Officer of
Gilead Sciences |
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60 |
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2019 |
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3 |
| ACC |
Audit
and Compliance Committee |
| LDICC |
Leadership
Development, Inclusion and Compensation Committee |
| NCGC |
Nominating
and Corporate Governance Committee |
| EC |
Executive
Committee |
|
Committee
Chair |
|
Audit
Committee Financial Expert |
| (1) |
Alphabet’s
Corporate Governance Guidelines provide that the maximum number of
public company boards our directors can serve on is four, including
membership on the Alphabet Board. All nominees are in compliance
with this policy. |
ALPHABET ● 2023 PROXY
STATEMENT 10
— CORPORATE
GOVERNANCE HIGHLIGHTS
Our corporate governance structure is designed to promote long-term
stockholder value creation through the leadership and oversight
provided by our thoughtfully and effectively composed Board. Our
Board is committed to maintaining alignment with stockholder
interests through our strong governance practices and by seeking
and incorporating stockholder feedback that informs key areas of
focus for our Board and the company each year.
|
Board
Leadership and Composition
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Board
and Committee Practices
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Stockholder
Alignment
|
●
Independent Chair of the Board, separate from CEO role
●
100% independent key committees (ACC, LDICC, NCGC) and committee
chairs
●
Review of each committee chair at least every three years
●
Board membership criteria established by the Board with
consideration of potential director nominee’s integrity, strength
of character, judgment, business experience, specific areas of
expertise and knowledge of the industries in which the company
operates, ability to devote sufficient time to attendance at and
preparation for Board meetings, factors relating to Board
composition, and principles of diversity
●
Diverse Board in terms of race, ethnicity, gender, age, education,
skills, cultural background, professional experiences, and
tenure
●
Commitment to consider underrepresented people of color and
different genders as potential director nominees
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●
Annual Board and committee evaluations
●
Executive sessions of independent directors for all quarterly Board
and committee meetings led by the Chair of the Board and committee
chairs, respectively
●
Director overboarding policy, which provides that the maximum
number of public company boards directors can serve on is four
(including Alphabet Board)
●
Director orientation and continuing education programs
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Committee meetings open to all directors
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●
Annual election for all directors
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Majority voting standard for election of directors
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Removal of directors with or without cause
●
Minimum stock ownership guidelines for both executive officers and
directors
●
Channels for stockholder feedback, including via engagements with
management to discuss corporate governance and ESG matters
●
Board oversight and evaluation of stockholder proposals submitted
for consideration at the annual meeting of stockholders
●
Commitment for the Board to represent the balanced, best interests
of the stockholders as a whole rather than special interest groups
or constituencies
|
For more detailed information on Alphabet’s corporate governance
and risk oversight framework, see “Directors, Executive Officers,
and Corporate Governance—Corporate Governance and Board Matters”
beginning on page 29.
Engagement
We proactively engage with our stockholders and other stakeholders
throughout the year on a broad range of topics that are of interest
and priority to the company and our stockholders. These include
business strategy and performance, and ESG topics such as
environmental sustainability, human capital, workforce diversity,
executive compensation, and Board leadership and composition.
Our engagement enables us to better understand our stockholders’
priorities and perspectives, gives us an opportunity to elaborate
on our initiatives, policies, and practices, and fosters open and
constructive dialogue. We share the feedback from these
conversations with our Board, which considers these perspectives as
part of its evaluation and review of our practices, including those
on governance, compensation, stockholder proposals, and ESG
matters.
ALPHABET ● 2023 PROXY
STATEMENT 11
—
ENVIRONMENTAL & SOCIAL HIGHLIGHTS
At Alphabet, we aim to build technology to help improve the lives
of as many people as possible. In pursuing this goal, we develop
products and services that we believe have a positive impact on the
world and further the long-term interests of our business,
stockholders, and stakeholders.
Our Board and its committees provide oversight of environmental and
social matters that are important to both our company and
stakeholders. At the committee level, oversight of specific
environmental and social topics is assigned to the relevant
committees, including:
|
● |
Our Audit and
Compliance Committee has the primary responsibility for oversight
of risks associated with, among other matters, data privacy and
security, competition, compliance, civil and human rights, and
sustainability. |
|
● |
Our Leadership Development,
Inclusion and Compensation Committee oversees human capital
management, including diversity and inclusion and fostering a
strong corporate culture. |
2022 Highlights
The scale and breadth of our products, services, and operations
provide us both an opportunity and a responsibility to manage our
company in an environmentally and socially responsible way. We are
steadfast in our commitment to advancing environmental and social
goals, and are focused on evolving our disclosures to align with
the expectations of stockholders and other stakeholders.
Below are some key highlights from our 2022 progress:
 |
|
Environmental
Sustainability |
|
●
Submitted formal commitment to the Science Based Targets initiative
(SBTi) to seek validation of our absolute emissions
reduction target
●
Published annual water
metrics for our U.S. data center locations and committed
to sharing annual water metrics for additional global locations in
our 2023 environmental report
|
 |
|
Diversity,
Equity
and Inclusion |
|
●
Conducted and released a voluntary civil rights audit of our
policies, practices, and products. This audit was conducted by Debo
P. Adegbile, Chair of WilmerHale’s Anti-Discrimination Practice,
and it identifies significant strengths, as well as opportunities
to further advance civil rights, equity, and inclusion
|
 |
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Human
Rights |
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●
Established company-wide approach to ongoing human rights due diligence.
Our approach applies a strategic and cross-product methodology for
assessing human rights impacts, addressing the findings, and
tracking progress
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Responsible
AI |
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●
Published our 2022 AI
principles progress update and a whitepaper outlining
why we focus on AI (and to
what end)
|
Our Approach
Below we describe certain environmental and social topics that we
believe are of interest to many of our stockholders and broader
stakeholders, and that are important to driving value over the
long-term.
Environmental
Sustainability: We care deeply about sustainability, and
we strive to build it into everything we do. Oversight of
environmental sustainability primarily resides with our Audit and
Compliance Committee, which reviews and discusses with management
our risk exposures, including those related to environmental
sustainability. We know that environmental sustainability begins
with our own footprint. But no company, no matter how ambitious,
can solve a challenge as big as climate change alone. One of the
most powerful things we can do is build technology that allows us,
our partners, and individuals around the world to take meaningful
action. Highlights of our key achievements and ambitions
include:
|
● |
We have
matched 100% of our annual electricity use with renewable energy
since 2017. |
|
● |
We have set a
goal to achieve net-zero emissions across our operations and value
chain, and to operate on carbon-free energy by 2030. |
|
● |
We are working hard to make our
data centers some of the most efficient in the world by designing,
building, and operating each one to maximize efficient use of
energy, water, and materials. |
We track and provide transparent information and data on our
environmental sustainability initiatives. Please see our
Sustainability website and our annual environmental report for more
information on our actions and progress.
ALPHABET ● 2023 PROXY
STATEMENT 12
Diversity, Equity, and
Inclusion (DEI): Building a world where progress,
equitable outcomes, diversity, and inclusion can be realities is at
the heart of what we do — from how we build our products to how we
build our workforce. We have deepened our efforts to drive
meaningful change and we also know there is more to be done. We
have a responsibility to continue scaling our DEI initiatives, to
ensure a workforce that is more representative of our users, a
workplace that creates a sense of belonging for everyone, and to
increase pathways to tech in the communities we call home.
Most recently, we conducted and released a voluntary civil rights
audit of our policies, practices, and products. This audit was
conducted by Debo P. Adegbile, Chair of WilmerHale’s
Anti-Discrimination Practice, and it identified significant
strengths, as well as opportunities to further advance civil
rights, equity, and inclusion.
We report on our commitments, initiatives, and progress through our
Diversity Annual Report and also share publicly our Equal
Employment Opportunity Report (EEO-1). Please see our Belonging and
Human Rights websites for more information.
Content Governance, Data
Privacy, and Data Security: Ensuring proper use of our
platforms and protecting the data privacy and security of our users
is fundamental to maintaining our users’ trust and to ensuring our
long-term business success. Our Audit and Compliance Committee has
specific oversight of data privacy and security matters.
We are committed to promoting transparency across our platforms and
provide detailed reporting at the company level and, where
applicable, individual business level regarding our policies,
programs, and performance including:
|
● |
Our
Transparency Report, which shares data on how we handle content
that violates our policies, as well as how we handle government
requests for removal of content. |
|
● |
Our Ads Safety
Report, where we explain how we are using evolving policies and
better technology to find and remove policy-violating ads. |
|
● |
Our YouTube
enforcement report, which we release on a quarterly basis, includes
information on channel removals, removal of comments, the policy
reasons for removals, and data on appeals. |
|
● |
We also
regularly share blog posts with information on a broad range of
issues, including how we combat misinformation and disinformation
on our platforms and partner with external organizations to drive
industry-wide efforts. |
Please see our Google Transparency Report website for more
information.
Public Policy and
Lobbying: Our engagement with policymakers and
regulators is guided by a commitment to ensuring our participation
is always open, transparent, and clear to our users, stockholders,
and the public. Our Nominating and Corporate Governance Committee
and senior management review our corporate political policies and
activities to ensure appropriate policies and practices are in
place and serving the interest of stockholders.
Our lobbying, trade association, and political engagement policies
and disclosures are the result of careful ongoing consideration and
analysis by our management. Our U.S. Public Policy Transparency
website provides robust and regularly updated disclosures on our
public policy and lobbying activities, trade association
participation, and other key elements of our approach to policy
engagement.
Human Rights: At
Alphabet, we are guided by internationally recognized human rights
standards. We have a longstanding commitment to respecting the
rights enshrined in the Universal Declaration of Human Rights and
its implementing treaties, as well as to upholding the standards
established in the United Nations Guiding Principles on Business
and Human Rights and in the Global Network Initiative
Principles.
Under the umbrella of our Human Rights Program, our senior
management, including our Global Head of Human Rights, oversees the
implementation of our civil rights and human rights work and
provides relevant updates to our Audit and Compliance Committee.
Through our Human Rights Program, we have developed a deeper
understanding of both the opportunities and potential risks
associated with technology by advising product teams on potential
civil and human rights impacts, conducting human rights due
diligence, and engaging external experts and stakeholders on these
issues.
Our Human Rights website provides details on our commitments and
outlines our approach to human rights.
Responsible AI:
As an information and computer science company, we aim to and have
been at the forefront of advancing the frontier of AI through our
path-breaking and field-defining research to develop more capable
and useful AI. From this research and development, we are bringing
breakthrough innovations into the real world to assist people and
benefit society everywhere through our infrastructure, tools,
products and services, as well as through enabling and working with
others to benefit society.
We understand that AI, as a still-emerging technology, poses
various and evolving complexities and risks. Our development and
use of AI must address these risks. That is why we consider it an
imperative to pursue AI responsibly. In 2018, we were one of the
first companies to commit to AI Principles that put beneficial use,
users, safety, and avoidance of harms above business
considerations, and we have pioneered many best practices. We are
committed to leading and setting the standard in developing and
shipping useful and beneficial applications, applying ethical
principles grounded in human values, and evolving our approaches as
we learn from research, experience, users, and the wider
community.
We provide more information on our AI approach, responsibilities,
and principles on our Google AI website
ALPHABET ● 2023 PROXY
STATEMENT 13
Reporting and Transparency
In addition to the extensive reporting and transparency we provide
on the topics discussed above, we are focused on evolving our ESG
disclosures to align with best practices and stockholder and
stakeholder expectations. We maintain an ESG Index which maps our
public disclosures to the Sustainable Accounting Standards Board
(SASB) and to the Task Force on Climate-Related Financial
Disclosures (TCFD) frameworks. We are on a continuous journey to
advance our ESG initiatives and reporting, and will continue to
evaluate and enhance our ESG disclosures as we make progress.
ALPHABET ● 2023 PROXY
STATEMENT 14
— EXECUTIVE
COMPENSATION HIGHLIGHTS
We design our executive officer compensation programs to attract
and retain the world’s best talent, support Alphabet’s culture of
innovation and performance, and align employee and stockholder
interests.
|
Sound
Program Design
|
|
Pay for
Performance
|
|
Best
Practices in Executive
Compensation
|
●
Competitive total pay opportunity to attract, retain, and motivate
leaders
●
Primarily equity-based compensation with payout aligned to
long-term company performance
●
Multi-year vesting of stock awards
●
Discourage unnecessary and excessive risk taking
●
ESG bonus for members of Alphabet’s senior executive team
|
|
●
Performance stock awards with payout based on long-term company
performance
●
Performance stock awards include total shareholder return modifier
to reward significant positive outperformance of Alphabet relative
to the companies comprising the S&P 100 for the applicable
performance period
|
|
●
No change in control benefits
●
Prohibition of pledging and hedging ownership of Alphabet stock by
executive officers, directors, and employees
●
No executive-only benefit plans or retirement programs
●
No excessive perquisites beyond those considered a business
necessity
|
For more detailed information on Alphabet’s executive compensation
philosophy and practices, see “Compensation Discussion and
Analysis” beginning on page 46.
ALPHABET ● 2023 PROXY
STATEMENT 15
— ANNUAL
MEETING OF STOCKHOLDERS
 |
|
 |
|
 |
|
Time and Date:
9:00 a.m., Pacific Time,
on
Friday, June 2, 2023
|
|
Virtual Meeting Access:
Alphabet stockholders
(or their proxy holders)
can participate in and vote at our Annual
Meeting by visiting
www.virtualshareholdermeeting.com/
GOOGL23
and entering the 16-digit control number
included in the Notice, voting instruction
form, or proxy card.
All others may view the Annual Meeting
through our Investor Relations YouTube
channel at www.youtube.com/c/AlphabetIR.
|
|
Record Date:
April 4, 2023
|
Voting: Holders of Class A or Class B common stock as of the
Record Date are entitled to vote. Each share of Class A common
stock is entitled to one (1) vote with respect to each director
nominee and one (1) vote with respect to each of the proposals to
be voted on. Each share of Class B common stock is entitled to ten
(10) votes with respect to each director nominee and ten (10) votes
with respect to each of the proposals to be voted on. The holders
of the shares of Class A common stock and Class B common stock are
voting as a single class on all matters. Holders of Class C capital
stock have no voting power as to any items of business that will be
voted on at the Annual Meeting.
Participating in the Annual Meeting: We have adopted a
virtual format for our Annual Meeting to make participation
accessible for stockholders from any geographic location with
internet connectivity. We have worked to offer the same
participation opportunities as were provided at our past meetings
held in-person while further enhancing the online experience
available to all stockholders regardless of their location.
You are entitled to participate in the Annual Meeting if you were a
holder of Class A or Class B common stock as of the close of
business on the Record Date or hold a valid proxy for the Annual
Meeting. To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/GOOGL23,
you must enter the 16-digit control number found in the box marked
by the arrow for postal mail recipients of the Notice, voting
instruction form, or the proxy card, or within the body of the
email for electronic delivery recipients.
We encourage you to access the Annual Meeting before it begins.
Online check-in will start approximately 30 minutes before the
Annual Meeting on June 2, 2023. If you have difficulty accessing
the meeting, please call 1-844-986-0822 (toll free) or
1-303-562-9302 (international). We will have technicians available
to assist you.
We will also make the Annual Meeting viewable to anyone interested
through our Investor Relations YouTube channel at www.youtube.com/c/AlphabetIR.
ALPHABET ● 2023 PROXY
STATEMENT 16
— VOTING
MATTERS AND VOTE RECOMMENDATIONS
|
Proposal |
|
Alphabet
Board Voting
Recommendation |
|
Rationale |
|
MANAGEMENT
PROPOSALS: |
|
|
|
|
|
(1) |
Election of eleven directors (page 64) |
|
FOR each nominee |
|
● Slate of
highly qualified director nominees with broad and diverse
backgrounds, experiences, and skill sets aligned to Alphabet’s
unique and evolving business
|
|
(2) |
Ratification of the appointment of Ernst & Young LLP as
Alphabet’s independent registered public accounting firm for the
fiscal year ending December 31, 2023 (page 65) |
|
FOR |
|
● Ernst & Young
LLP is an independent accounting firm with the breadth of expertise
and knowledge necessary to effectively audit Alphabet’s financial
statements
● All audit and
non-audit services provided by Ernst & Young LLP are
pre-approved by our Audit and Compliance Committee
|
|
(3) |
Approval of the amendment and restatement of Alphabet’s Amended and
Restated 2021 Stock Plan to increase the share reserve by
170,000,000 (post stock split) shares of Class C capital stock
(page 66) |
|
FOR |
|
● Equity
awards granted under Alphabet’s Amended and Restated 2021 Stock
Plan are vital to our ability to attract and retain outstanding and
highly skilled employees |
|
(4) |
Advisory vote to approve compensation awarded to named executive
officers (page 71) |
|
FOR |
|
● Our compensation
program reflects our philosophy to pay all our employees, including
our named executive officers, in ways to (1) attract and retain the
world’s best talent; (2) support our culture of innovation and
performance; and (3) align employee and stockholder interests
● The proportion of
overall pay tied to performance is higher for employees at more
senior levels in the organization, including our named executive
officers, reflecting their opportunity to have more impact on
company performance
|
|
(5) |
Advisory vote on the frequency of advisory votes to approve
compensation awarded to named executive officers (page
72) |
|
3 YEARS |
|
● A
triennial voting frequency is aligned with our long-term
compensation philosophy, and provides our stockholders with an
appropriate time horizon over which to evaluate the efficacy of our
compensation program and policies in achieving long-term business
results |
|
STOCKHOLDER
PROPOSALS: |
|
|
|
|
|
(6) |
Stockholder proposal regarding a lobbying report (page
76) |
|
AGAINST |
|
● We already publish
extensive lobbying disclosures, which address much of the
information requested in the proposal
● Our lobbying
transparency efforts have been recognized as best in class
● We have robust
oversight mechanisms in place including oversight by our Board and
senior management team
|
|
(7) |
Stockholder proposal regarding a congruency report (page
78) |
|
AGAINST |
|
● We seek to
advance the best interests of the company and our stockholders in
partnering with various organizations
● Our
collaboration with organizations does not reflect an endorsement of
their entire agendas
|
|
(8) |
Stockholder proposal regarding a climate lobbying report (page
80) |
|
AGAINST |
|
● We already publish
extensive lobbying disclosures including on climate-related
topics
● We assess alignment of
our trade association participation with the goals of the Paris
Agreement
● We engage with our
trade associations to encourage alignment between our core public
policy objectives and their policy advocacy activities, including
on climate change
|
ALPHABET ● 2023 PROXY
STATEMENT 17
|
Proposal |
|
Alphabet
Board Voting
Recommendation |
|
Rationale |
|
(9) |
Stockholder proposal regarding a report on reproductive rights and
data privacy (page 83) |
|
AGAINST |
|
● We have policies and
procedures for evaluating and responding to requests for user
information, and routinely push back on overbroad or otherwise
inappropriate demands
● We provide robust
privacy controls and practice data minimization for users, and are
committed to improving our privacy protections when appropriate,
especially around health-related topics
|
|
(10) |
Stockholder proposal regarding a human rights assessment of data
center siting (page 86) |
|
AGAINST |
|
● Our existing
disclosures already provide transparent information on how we
oversee, evaluate and manage human rights-related risks, including
those related to data center siting
● Our human rights
governance and management structure provides effective oversight of
key human rights risks and mitigation strategies
|
|
(11) |
Stockholder proposal regarding a human rights assessment of
targeted ad policies and practices (page 89) |
|
AGAINST |
|
● Our existing policies
are designed to safeguard user privacy and work in tandem with our
human rights governance and management structure
● Through our Privacy
Sandbox commitments, we collaborate with regulators and others
across the digital advertising ecosystem to improve privacy and
test new methodologies
● We have already
updated our Privacy Sandbox initiative to address concerns similar
to those raised in this proposal
|
|
(12) |
Stockholder proposal regarding algorithm disclosures (page
92) |
|
AGAINST |
|
● We already disclose
significant information about our advertising and search policies
and procedures and our transparency efforts are informed by
multiple frameworks
● Disclosure of
additional details on proprietary algorithmic systems could be used
to compromise our operations and the quality of our services
|
|
(13) |
Stockholder proposal regarding a report on alignment of YouTube
policies with legislation (page 95) |
|
AGAINST |
|
● We already provide
significant information about YouTube’s policies and procedures to
further our commitment to online safety and have intensified our
regulatory readiness initiatives under appropriate senior
management and Board oversight
● We have published a
number of substantive disclosures to meet rigorous reporting
requirements, and we are transparent about our compliance
efforts
|
ALPHABET ● 2023 PROXY
STATEMENT 18
|
Proposal |
|
Alphabet
Board Voting
Recommendation |
|
Rationale |
|
(14) |
Stockholder proposal regarding a content governance report (page
98) |
|
AGAINST |
|
● We have appropriate
safeguards in place to ensure our policies are designed and
enforced in ways that are free from improper bias
● We devote substantial
effort to preventing misuse of our platforms and ensuring content
is appropriately provided and supported by effective oversight and
transparency on enforcement actions
|
|
(15) |
Stockholder
proposal regarding a performance review of the Audit and Compliance
Committee (page 101) |
|
AGAINST |
|
● Our Board
believes that our Audit and Compliance Committee has the requisite
experience, skill set, and protocols to conduct the robust risk
oversight sought by the proponent, and that a third-party
assessment would not result in better direction or performance |
|
(16) |
Stockholder
proposal regarding bylaws amendment (page 103) |
|
AGAINST |
|
● We amended
our Bylaws in October 2022 following SEC rule changes and careful
deliberations by our Board, and the amended Bylaws largely include
the advance notice provisions requested by the proponent |
|
(17) |
Stockholder
proposal regarding “executives to retain significant stock”
(page 105) |
|
AGAINST |
|
● Our
existing stock ownership guidelines and policies effectively align
senior management and stockholder interests, and our executive
compensation programs reinforce this alignment |
|
(18) |
Stockholder
proposal regarding equal shareholder voting (page 107) |
|
AGAINST |
|
● Our strong
governance practices and current capital structure have provided
significant long-term stability to the company and have proven
beneficial to stockholders through the delivery of exceptional
returns over the life of the company |
ALPHABET ● 2023 PROXY
STATEMENT 19
Table of
Contents
ALPHABET ● 2023 PROXY
STATEMENT 20
ALPHABET ● 2023 PROXY
STATEMENT 21
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
— DIRECTORS AND
EXECUTIVE OFFICERS
Our Board of Directors (our Board) is composed of highly
experienced and diverse directors who have led, advised, and
established leading global organizations and institutions. Our
Board has taken a thoughtful approach to board composition to
ensure that our directors have backgrounds that collectively add
significant value to the strategic decisions made by the company
and that enable them to provide oversight of management to ensure
accountability to our stockholders. Our Board has endeavored to
strike the right balance between long-term understanding of our
business and fresh external perspectives, adding five new directors
in the past seven years, as well as ensuring the diversity of
backgrounds and perspectives within the boardroom.
Our directors have extensive backgrounds as entrepreneurs,
technologists, operational and financial experts, academics,
scientists, investors, advisors, nonprofit board members, and
government leaders — all of which provide skills and expertise
directly relevant to our strategic and oversight priorities. Many
of the current directors have senior leadership experience at major
domestic and international companies. In these positions, they have
also gained experience in core management skills, such as strategic
and financial planning, public company financial reporting,
compliance, risk management, leadership development, and
international business experience. Most of our directors also have
experience serving on boards of directors and board committees of
other public companies, and have an understanding of corporate
governance practices and trends, different business processes,
challenges, and strategies. Other directors have experience as
presidents or trustees of significant academic, research, and
philanthropic institutions, which brings unique perspectives in
relevant disciplines and institutional leadership to our Board.
Further, our directors also have other experience that makes them
valuable members, such as entrepreneurial experience and experience
developing technology or managing technology companies, which
provides insight into strategic and operational issues we face.
The demographic information presented below for our directors is
based on voluntary self-identification by each director. Additional
biographical information of our directors and executive officers as
of April 4, 2023 is set forth starting on page 23.
|
|
Page |
Brin |
Pichai |
Hennessy |
Arnold |
Chávez |
Doerr |
Ferguson |
Mather |
Shriram |
Washington |
|
Gender
Identity |
|
|
|
|
|
|
|
|
|
|
|
|
Male |
 |
|
|
|
|
|
|
|
|
|
|
|
Female |
|
|
|
|
|
|
|
|
|
|
|
|
Race/Ethnicity |
|
|
|
|
|
|
|
|
|
|
|
|
African American or Black |
|
|
|
|
|
|
|
|
|
|
|
|
Asian |
|
|
|
|
|
|
|
|
|
|
|
|
Hispanic |
|
|
|
|
|
|
|
|
|
|
|
|
White |
|
|
|
|
|
|
|
|
|
|
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|
LGBTQ+ |
|
|
|
|
|
|
|
|
|
|
|
ALPHABET ● 2023 PROXY
STATEMENT 22
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Directors
|
LARRY PAGE
Co-Founder
Director since 1998 | Executive Committee
(Chair)
|
|
Selected Membership:
● The Carl Victor Page
Memorial Foundation
|
Larry Page, 50, one of
Google’s Co-Founders, previously served as Google’s Chief Executive
Officer from April 2011 to October 2015, and as Alphabet’s Chief
Executive Officer from October 2015 to December 2019. From July
2001 to April 2011, Larry served as Google’s President, Products.
In addition, from September 1998 to July 2001, Larry served as
Google’s Chief Executive Officer, and from September 1998 to July
2002, as Google’s Chief Financial Officer. Larry holds a Bachelor
of Science degree in engineering, with a concentration in computer
engineering, from the University of Michigan and a Master of
Science degree in computer science from Stanford University.
Select Leadership Skills and Additional
Experiences:
●
Business
leadership, operational experience, and experience developing
technology as Co-Founder of Google and former Chief Executive
Officer of Alphabet.
●
In-depth
knowledge of the technology sector and experience in developing
transformative business models.
|
|
|
|
SERGEY BRIN
Co-Founder
Director since 1998 | Executive
Committee
|
|
Selected Membership:
● The Sergey Brin Family
Foundation
|
Sergey Brin, 49, one of
Google’s Co-Founders, previously served as Google’s President from
May 2011 to October 2015, and as Alphabet’s President from October
2015 to December 2019. From July 2001 to April 2011, Sergey served
as Google’s President, Technology and Co-Founder. In addition, from
September 1998 to July 2001, Sergey served as Google’s President
and Chairman of Google’s Board of Directors. Sergey holds a
Bachelor of Science degree with high honors in mathematics and
computer science from the University of Maryland at College Park
and a Master of Science degree in computer science from Stanford
University.
Select Leadership Skills and Additional Experiences:
●
Business
leadership, operational experience, and experience developing
technology as Co-Founder of Google and former President of
Alphabet.
●
In-depth
knowledge of the technology sector and experience in developing
transformative business models.
|
|
|
|
SUNDAR PICHAI
Chief Executive Officer, Alphabet and Google
Director since 2017 | Executive
Committee
|
|
Selected Membership:
● The Pichai Family
Foundation
|
Sundar Pichai, 50, has
been the Chief Executive Officer of Alphabet since December 2019
and of Google since October 2015. Since joining Google in 2004,
Sundar has led product and engineering for Google’s products and
platforms, including Search, Chrome, Maps, Android, Gmail, and
Google Apps (now Google Workspace). Sundar served as Google’s
Senior Vice President of Products from October 2014 to October
2015, and as Google’s Senior Vice President of Android, Chrome and
Apps from March 2013 to October 2014. As CEO, he has shifted the
company’s strategy to focus on AI, which is now powering advances
in the company’s founding product, Search, as well as other helpful
products for people around the world. Sundar holds a Bachelor of
Technology degree from the Indian Institute of Technology
Kharagpur, a Master of Science degree from Stanford University, and
a Master of Business Administration degree from The Wharton School
of the University of Pennsylvania.
Select Leadership Skills and Additional Experiences:
●
Business
leadership, operational experience, and experience developing
technology as Chief Executive Officer of Alphabet and Google.
●
In-depth
knowledge of the technology sector, and experience in developing
Alphabet and Google’s products and services and leading the
company’s strategic vision, management, and operations.
|
ALPHABET ● 2023 PROXY
STATEMENT 23
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
|
JOHN L. HENNESSY
Chair of the Board
Independent Director since
2004 | Nominating and Corporate Governance
Committee (Chair)
|
|
Selected Memberships and Private
Directorships:
● Board of Trustees,
Gordon and Betty Moore Foundation
● Board of Directors,
Chan Zuckerberg Biohub
● Trustee, Queen
Elizabeth Prize for Engineering Foundation
Former Public Company Directorship in
the Past Five Years:
● Cisco Systems, Inc
|
John L. Hennessy, 70, has
served as Chair of our Board since January 2018. John previously
served as our Lead Independent Director from April 2007 to January
2018. John is the James F. and Mary Lynn Gibbons Professor of
Computer Science and Electrical Engineering in the Stanford School
of Engineering, and the Shriram Family Director of Stanford’s
Knight-Hennessy Scholars, a graduate-level scholarship program.
John served as the President of Stanford University from September
2000 to August 2016. From 1994 to August 2000, John held various
positions at Stanford, including Dean of the Stanford University
School of Engineering and Chair of the Stanford University
Department of Computer Science. John holds a Bachelor of Science
degree in electrical engineering from Villanova University and a
Master of Science degree and a Doctoral degree in computer science
from the State University of New York, Stony Brook.
Select Leadership Skills and Additional Experiences:
●
Leadership
and management experience as a former president of a world-renowned
university.
●
Experience
developing technology businesses as founder of MIPS Technologies,
Inc. and chief architect of Silicon Graphics Computer Systems,
Inc.
●
Global
business perspective from his service on other boards.
|
|
|
|
FRANCES H. ARNOLD
Independent Director since
2019 | Nominating and Corporate Governance
Committee
|
|
Other Public Company
Directorship:
● Illumina, Inc.
Selected Memberships:
● Co-Chair, President’s
Council of Advisors on Science and Technology
● Member, U.S. National
Academies of Science, Medicine, and Engineering
● Member, The American
Academy of Arts and Sciences
|
Frances H. Arnold, 66,
manages a research group, is the Linus Pauling Professor of
Chemical Engineering, Bioengineering and Biochemistry, and is the
Director of the Donna and Benjamin M. Rosen Bioengineering Center,
all at the California Institute of Technology. She joined the
California Institute of Technology in 1986 and has served as a
Visiting Associate, Assistant Professor, Professor, and Director.
Frances’s laboratory focuses on protein engineering by directed
evolution, with applications in alternative energy, chemicals, and
medicine. Frances is the recipient of numerous honors, including
the Nobel Prize in Chemistry, the Millennium Technology Prize,
induction into the National Inventors Hall of Fame, Fellow of the
National Academy of Inventors, the ENI Prize in Renewable and
Nonconventional Energy, the U.S. National Medal of Technology and
Innovation, and the Charles Stark Draper Prize of the U.S. National
Academy of Engineering. Frances holds a Bachelor of Science degree
in mechanical and aerospace engineering from Princeton University
and a Doctoral degree in chemical engineering from the University
of California, Berkeley.
Select Leadership Skills and Additional Experiences:
●
Leadership
and management experience managing a research group at the
California Institute of Technology and co-chair of the President’s
Council of Advisors on Science and Technology.
●
Recipient
of the 2018 Nobel Prize for Chemistry for her work on directed
evolution of enzymes.
●
Global
business perspective from her service on other boards.
|
|
|
|
R. MARTIN “MARTY” CHÁVEZ
Independent Director since 2022 | Audit
and Compliance Committee
|
|
Other Public Company
Directorship:
● Recursion
Pharmaceuticals, Inc.
Selected Memberships:
● Board of Fellows,
Stanford Medicine Board
● Board of Directors,
The Broad Institute of MIT
Former Public Company Directorship in
the Past Five Years:
● Banco Santander,
S.A.
|
R. Martin “Marty” Chávez,
59, has been a Partner and Vice Chairman of Sixth Street, a global
asset manager, since May 2021. From January 2005 to December 2019,
he served in a number of executive positions at Goldman Sachs,
including Chief Information Officer, Chief Financial Officer, and
global co-head of the firm’s Securities Division, and was a partner
and a member of Goldman Sachs’ management committee. Previously,
Marty was a Chief Executive Officer and co-founder of Kiodex, which
was acquired by Sungard in 2004, and Chief Technology Officer and
co-founder of Quorum Software Systems. Marty holds a Bachelor of
Arts degree in biochemical sciences and a Master of Science degree
in computer science from Harvard University, and a Doctoral degree
in medical information sciences from Stanford University.
Select Leadership Skills and Additional
Experiences:
●
Extensive
financial and management expertise and global business leadership
as Partner and Vice Chairman of Sixth Street and former Chief
Financial Officer of Goldman Sachs.
●
In-depth
knowledge of the technology sector.
●
Global
business perspective from his service on other boards.
|
ALPHABET ● 2023 PROXY
STATEMENT 24
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
|
L. JOHN DOERR
Independent Director since
1999 | Leadership Development, Inclusion and
Compensation Committee
|
|
Other Public Company
Directorships:
● Amyris, Inc.
● DoorDash, Inc.
Selected Memberships:
● Board of Trustees, The
Aspen Institute
● Board of Directors,
Climate Imperative
Former Public Company Directorships
in the Past Five Years:
● Bloom Energy
Corporation
● Coursera, Inc.
● Quantumscape
Corporation
● Zynga, Inc.
|
L. John Doerr, 71, has
been a General Partner of Kleiner Perkins, a venture capital firm,
since August 1980. John holds a Bachelor of Science degree in
electrical engineering and a Master of Science degree in electrical
engineering from Rice University, and a Master of Business
Administration degree from Harvard Business School.
Select Leadership Skills and Additional Experiences:
●
Global
business leadership and extensive financial and investment
expertise as a venture capitalist.
●
In-depth
knowledge of the technology sector and visionary in the
industry.
●
Global
business perspective from his service on other boards.
|
| |
|
ROGER W. FERGUSON JR.
Independent Director since 2016 | Audit
and Compliance Committee
|
|
Other Public Company
Directorships:
● Corning
● International
Flavors & Fragrances, Inc.
Selected Memberships:
● Board of Regents, The
Smithsonian Institution
● Member and Co-Chair of
the Commission on the Future of Undergraduate Education, American
Academy of Arts and Sciences
● Board of Trustees: The
Conference Board; The Group of Thirty; The National September 11th
Museum and Memorial
Former Public Company Directorships
in the Past Five Years:
● Blend Labs, Inc.
● General Mills,
Inc.
|
Roger W. Ferguson Jr.,
71, has been the Chief Investment Officer of Red Cell Partners LLC,
a venture capital firm, since August 2022. He is also the Steven A.
Tananbaum distinguished fellow at the Council on Foreign Relations.
Roger has served as the President and Chief Executive Officer of
TIAA, a major financial services company, from April 2008 to May
2021. He joined TIAA after his tenure at Swiss Re, a global
reinsurance company, where he served as Chairman of the firm’s
America Holding Corporation, Head of Financial Services, and a
member of the Executive Committee from 2006 to 2008. Prior to that,
Roger joined the Board of Governors of the U.S. Federal Reserve
System in 1997 and served as its Vice Chairman from 1999 to 2006.
From 1984 to 1997, he was an associate and partner at
McKinsey & Company. Roger holds a Bachelor of Arts degree
in economics, a Doctoral degree in economics, and a Juris Doctor
degree, all from Harvard University.
Select Leadership Skills and Additional Experiences:
●
Global
business leadership and extensive financial, capital markets, and
management expertise as former President and Chief Executive
Officer of TIAA.
●
Extensive
experience in management consulting and various policy-making
roles.
●
Global
business perspective from his service on other boards.
|
ALPHABET ● 2023 PROXY
STATEMENT 25
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
|
ANN MATHER
Independent Director
since 2005 | Audit and Compliance Committee
(Chair)
|
|
Other Public Company
Directorships:
● Blend Labs, Inc.
● Bumble Inc.
● Netflix, Inc.
Selected Memberships:
● Board of Trustees,
Dodge & Cox Funds
Former Public Company Directorships
in the Past Five Years:
● Airbnb, Inc.
● Arista Networks,
Inc.
● Glu Mobile, Inc.
● Planet Labs Inc.
● Shutterfly, Inc.
|
Ann Mather, 62, was
Executive Vice President and Chief Financial Officer of Pixar, a
computer animation film studio, from 1999 to 2004. Prior to her
service at Pixar, Ann was Executive Vice President and Chief
Financial Officer of Village Roadshow Pictures, the film production
division of Village Roadshow Limited. Ann holds a Master of Arts
degree from Cambridge University in England, is an honorary fellow
of Sidney Sussex College, Cambridge, and is a chartered
accountant.
Select Leadership Skills and Additional Experiences:
●
Deemed an
“audit committee financial expert” with over 20 years of experience
in finance and operations of technology companies, particularly
publicly traded companies with knowledge of complex global
financial and business matters.
●
Global
business leadership and extensive financial experience as a former
chief financial officer and senior finance executive of major
corporations.
●
Global
business perspective from her service on other boards.
|
| |
|
K. RAM SHRIRAM
Independent Director
since 1998 | Leadership Development,
Inclusion and Compensation Committee
|
|
Selected Memberships:
● Member, Council on
Foreign Relations
● Board of Trustees,
Stanford Health Care
● Charter Member,
Indiaspora
|
K. Ram Shriram, 66, has
been a managing partner of Sherpalo Ventures, LLC, an angel venture
investment company, since January 2000. From August 1998 to
September 1999, Ram served as Vice President of Business
Development at Amazon.com, Inc., an internet retail company. Prior
to that, Ram served as President at Junglee Corporation, a provider
of database technology, which was acquired by Amazon.com in 1998.
Ram was an early member of the executive team at Netscape
Communications Corporation. Ram holds a Bachelor of Science degree
in mathematics from the University of Madras, India.
Select Leadership Skills and Additional Experiences:
●
Global
business leadership as former Vice President of Business
Development at Amazon.com, Inc., President of Junglee Corporation,
and a member of the executive team of Netscape Communications
Corporation.
●
Extensive
financial and investment expertise as a venture capitalist.
●
Outside
board experience as a director of several private companies.
|
| |
|
ROBIN L. WASHINGTON
Independent Director
since 2019 | Leadership Development,
Inclusion and Compensation Committee (Chair)
|
|
Other Public Company
Directorships:
● Honeywell
International, Inc.
● Salesforce, Inc.
● Vertiv Holdings
Co.
Selected Memberships and Private
Directorships:
● President’s
Council & Ross Business School Advisory Board, University
of Michigan
● Board of Trustees,
UCSF Benioff Children’s Hospital Oakland
● Board of Directors,
Mastercard Foundation
|
Robin L. Washington, 60,
served as the Executive Vice President and Chief Financial Officer
of Gilead Sciences, Inc., a biopharmaceutical company, from May
2008 to November 2019 where she oversaw Global Finance, Facilities
and Operations, Investor Relations, and the Information Technology
organizations. Robin remained with Gilead in an advisory capacity
from November 2019 until March 2020. From January 2006 to June
2007, Robin served as Chief Financial Officer of Hyperion Solutions
Corporation, an enterprise software company. Prior to Hyperion,
Robin served in a number of executive positions with PeopleSoft,
Inc., a provider of enterprise application software, including as
Senior Vice President and Corporate Controller along with several
other senior financial roles from 1996 to 2005. Prior to
PeopleSoft, Robin was Director of Finance for Tandem Computers, an
Accounting Analyst for the Federal Reserve Bank of Chicago, and a
Senior Auditor for Deloitte. Robin holds a Bachelor of Business
Administration degree from the University of Michigan and a Master
of Business Administration degree from Pepperdine University.
Select Leadership Skills and Additional Experiences:
●
Extensive
financial and management expertise and global business leadership
as former Executive Vice President and Chief Financial Officer of
Gilead Sciences, Inc., Hyperion Solutions Corporation, and former
executive of PeopleSoft, Inc.
●
In-depth
knowledge of the technology sector.
●
Global
business perspective from her service on other boards.
|
ALPHABET ● 2023 PROXY
STATEMENT 26
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Executive Officers
This section describes the business experience of our executive
officers, other than Sundar, whose biography can be found on page
23. Our executive officers are appointed by and serve at the
discretion of our Board. There are no family relationships among
any of our directors or executive officers.
|
RUTH M. PORAT
Senior Vice President,
Chief Financial Officer, Alphabet and Google
|
|
Public Company Directorship:
● Blackstone Inc.
Selected Memberships and Private
Directorships:
● Board of Directors,
Council on Foreign Relations
● Board of Trustees,
Memorial Sloan Kettering Cancer Center
● Board of Directors,
Stanford Management Company
|
Ruth M. Porat, 65, has
served as Senior Vice President, Chief Financial Officer of Google
since May 2015 and has held the same title at Alphabet since it was
created in October 2015. Prior to joining Google, Ruth was
Executive Vice President and Chief Financial Officer of Morgan
Stanley from January 2010 to April 2015. From September 2003 to
December 2009, she served in a number of executive positions at
Morgan Stanley, including Vice Chairman of Investment Banking,
Global Co-Head of Technology Investment Banking, and Global Head of
the Financial Institutions Group. Ruth holds a Bachelor of Arts
degree from Stanford University, a Master of Science degree from
The London School of Economics, and a Master of Business
Administration degree from The Wharton School of the University of
Pennsylvania.
Select Leadership Skills and Additional Experiences:
●
Extensive
financial and management expertise in the finance, investment, and
technology industries.
●
Outside
board experience and global business perspective from her service
on other boards.
|
| |
|
PRABHAKAR RAGHAVAN
Senior Vice President,
Knowledge and Information, Google
|
|
Selected Memberships:
● Member, National
Academy of Engineering
● Fellow, Association
for Computing Machinery
● Fellow, Institute of
Electrical and Electronic Engineers (IEEE)
|
Prabhakar Raghavan, 62,
has served as Senior Vice President of Google since November 2018.
He is responsible for Google Search, Assistant, Geo, Ads, Commerce,
and Payments products. Previously, he served as Senior Vice
President, Ads, from October 2018 to June 2020, and as Vice
President, Apps, from May 2014 to October 2018. Prior to joining
Google in March 2012, Prabhakar founded and led Yahoo! Labs, served
as the chief technology officer at Verity, held various positions
over the course of fourteen years at IBM Research, and was a
Consulting Professor of Computer Science at Stanford University.
Prabhakar holds a Bachelor of Technology degree from the Indian
Institute of Technology Madras and a Doctoral degree in electrical
engineering and computer science from the University of California,
Berkeley.
Select Leadership Skills and Additional Experiences:
●
Extensive
management experience having served in various leadership roles in
several technology companies.
●
In-depth
knowledge of the technology sector.
|
ALPHABET ● 2023 PROXY
STATEMENT 27
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
|
PHILIPP SCHINDLER
Senior Vice President,
Chief Business Officer, Google
|
|
Selected Membership:
● Scholar, the
Studienstiftung des deutschen Volkes, the German Academic
Scholarship Foundation
|
Philipp Schindler, 52,
has served as Senior Vice President, Chief Business Officer of
Google since August 2015, overseeing Google’s and YouTube’s sales
activities, Google’s technical and consumer support, partnership
and business development teams, and country operations. Philipp
previously served at Google as Vice President of Global Sales and
Operations from January 2012 to July 2015; as President for
Northern and Central Europe from June 2009 to January 2012; and as
Managing Director, Germany, Switzerland, Austria and Nordics from
September 2005 to June 2009. Philipp holds a Diplom Kaufmann degree
with distinction in business administration and management from the
European Business School in Oestrich-Winkel, Germany.
Select Leadership Skills and Additional Experiences:
●
Extensive
leadership experience having served as senior vice president at AOL
Germany, and head of marketing at CompuServe in Germany, a
subsidiary of AOL Inc.
●
In-depth
knowledge of the technology sector.
|
| |
|
KENT WALKER
President, Global
Affairs, Chief Legal Officer and Secretary, Alphabet and
Google
|
|
Selected Membership:
● Executive Council,
TechNet.org
|
Kent Walker, 62, has
served as President, Global Affairs, and Chief Legal Officer of
Alphabet and Google since November 2021, and Secretary of Alphabet
since January 2020. Kent previously served as Senior Vice
President, Global Affairs and Chief Legal Officer of Google from
June 2018 to November 2021. He oversees teams responsible for
content policy, government affairs, legal and compliance matters,
and philanthropy. Since joining Google in 2006, he has led Google’s
advocacy on competition, content, copyright, and privacy. He
previously held executive positions at Netscape, AOL, and eBay.
Kent holds a Bachelor of Arts degree in social studies from Harvard
University and a Juris Doctor degree from Stanford Law School.
Select Leadership Skills and Additional Experiences:
●
Extensive
leadership experience, including serving as the first chair of the
Global Internet Forum to Counter Terrorism and executive positions
at various technology companies. Currently chairs Google’s Advanced
Technology Review Council.
●
Previously
served as an Assistant U.S. Attorney in San Francisco and
Washington D.C.
●
In-depth
knowledge of the technology sector.
|
ALPHABET ● 2023 PROXY
STATEMENT 28
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
— CORPORATE
GOVERNANCE AND BOARD MATTERS
We have adopted a code of business conduct and ethics for
directors, officers (including our principal executive officer,
principal financial officer, and principal accounting officer), and
employees, known as the Alphabet Code of Conduct. We have also
adopted Corporate Governance Guidelines, which, in conjunction with
our certificate of incorporation, bylaws, and charters of the
standing committees of our Board, form the framework for our
corporate governance. The Alphabet Code of Conduct and Corporate
Governance Guidelines are available on our Investor Relations
website at https://abc.xyz/investor/. We will
post amendments to the Alphabet Code of Conduct or any waivers of
the Alphabet Code of Conduct for directors and executive officers
on the same website.
Stockholders may request printed copies of the Alphabet Code of
Conduct, the Corporate Governance Guidelines, and committee
charters at no charge by sending inquiries to:
 |
 |
| |
|
|
Investor Relations
Alphabet Inc.
1600 Amphitheatre Parkway
Mountain View, California 94043
|
Email: investor-relations@abc.xyz
|
Board Meetings
During 2022, our Board held five meetings and acted by unanimous
written/electronic consent twice. Each director attended at least
75% of all Board and applicable committee meetings. We encourage
our directors to attend our annual meetings of stockholders. Five
directors attended Alphabet’s 2022 Annual Meeting of
Stockholders.
Board Leadership Structure
In January 2018, John L. Hennessy, the then Lead Independent
Director, was appointed to serve as Alphabet’s Chair of the Board.
In December 2019, Sundar became the Chief Executive Officer of
Alphabet.
Our Board regularly reviews its leadership structure to ensure
continued effectiveness and believes that the current structure,
which separates the Chair and Chief Executive Officer roles, is
appropriate at this time in light of the evolution of Alphabet’s
business and operating environment. In particular, our Board
believes that this structure clarifies the individual roles and
responsibilities of Chief Executive Officer and Chair, streamlines
decision-making, and enhances accountability. John, a long-standing
member of our Board, has in-depth knowledge of the issues,
challenges, and opportunities facing us. As such, our Board
believes that he is best positioned to develop agendas that ensure
that our Board’s time and attention are focused on the most
critical matters. His role enables decisive leadership, ensures
clear accountability, and enhances the ability to communicate our
messages and strategy.
Each of the director nominees standing for election, other than
Larry, Sergey, and Sundar, is independent (see “Director
Independence” on page 34 of this proxy statement), and our Board
believes that the independent directors provide effective oversight
of management.
Board Committees
Our Board is currently composed of eleven directors. Our Board has
the following four standing committees:
|
1. |
an Audit and
Compliance Committee (the Audit Committee), |
|
2. |
a Leadership
Development, Inclusion and Compensation Committee (the Compensation
Committee), |
|
3. |
a Nominating
and Corporate Governance Committee (the Governance Committee),
and |
| 4. |
an Executive
Committee. |
From time to time, our Board may also establish ad hoc committees
to address particular matters. Each of the standing committees
operates under a written charter adopted by our Board. All of the
current standing committee charters are available on our Investor
Relations website at https://abc.xyz/investor/other/board/.
Printed copies of the charters are available at no charge to any
stockholder who requests them by following the instructions
above.
ALPHABET ● 2023 PROXY
STATEMENT 29
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
The membership and meetings during 2022 and the primary functions
of each of the standing committees are described below.
|
Board of
Directors |
Audit
Committee |
Compensation
Committee |
Governance
Committee |
Executive
Committee |
|
Larry
Page |
|
|
|
 |
|
Sergey
Brin |
|
|
|
 |
|
Sundar
Pichai |
|
|
|
|
|
John
L. Hennessy« |
|
|
|
|
|
Frances H.
Arnold« |
|
|
|
|
|
R. Martin
“Marty” Chávez«(1) |
|
|
|
|
|
L. John
Doerr« |
|
|
|
|
|
Roger W.
Ferguson Jr.« |
|
|
|
|
|
Ann
Mather« |
|
|
|
|
|
Alan R.
Mulally«(2) |
|
|
|
|
|
K. Ram
Shriram« |
|
|
|
|
|
Robin L.
Washington«(3) |
|
|
|
|
|
Member |
|
Committee Chair |
| « |
Independent Director |
| (1) |
Marty was appointed to serve as
a member of our Board and the Audit Committee effective July 11,
2022. |
| (2) |
Alan’s term as a member of our
Board and the Audit Committee ended on June 2, 2022. |
| (3) |
Robin served
as a member of the Audit Committee from June 1, 2022 until July 11,
2022. |
ALPHABET ● 2023 PROXY
STATEMENT 30
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
| Audit and
Compliance Committee |
|
|
|
The main function of the Audit Committee is to oversee our
accounting and financial reporting processes, oversee our
relationship with our independent auditors, provide oversight
regarding significant financial matters, and review and discuss
with management the company’s major risk exposures. The Audit
Committee’s responsibilities include but are not limited to:
|
● |
Overseeing the
risks and exposures associated with: |
|
|
● |
Financial
matters, including financial strategy and reporting, tax,
accounting, disclosure, internal control over financial reporting,
investment guidelines and credit and liquidity matters; |
|
|
● |
Data privacy
and security, competition, civil and human rights, sustainability,
and reputational risks; and |
|
|
● |
Our operations
and infrastructure, particularly reliability, business continuity
and capacity. |
|
● |
Selecting,
hiring, compensating, and ongoing monitoring of our independent
auditors, and approving the audit and non-audit services they
perform. |
|
● |
Overseeing and
monitoring the integrity of our financial statements and our
compliance with related legal and regulatory
requirements. |
|
● |
Establishing
and overseeing processes and procedures regarding complaints and
confidential and anonymous employee submissions about accounting,
internal accounting controls, or audit matters. |
|
● |
Overseeing our
internal control function, reviewing the appointment of an internal
auditing executive and any significant issues raised by the
internal audit team. |
|
● |
Reviewing with
management and the independent auditors our annual audited
financial statements, quarterly financial statements, earnings
announcements, regulatory filings including our annual proxy
statement, and other public announcements regarding our results of
operations. |
|
● |
Reviewing and
approving related party transactions. |
| ● |
Approving
Alphabet’s overall compliance program and reviewing its
implementation and effectiveness. |
During 2022, the Audit Committee held nine meetings and acted by
unanimous written/electronic consent two times.
The Audit Committee currently comprises Ann (Chair), Roger, and
Marty, each of whom is a non-employee member of our Board. Our
Board has determined that each of the directors serving on the
Audit Committee is independent within the meaning of the rules of
the SEC and the Listing Rules of the NASDAQ Stock Market
(NASDAQ).
Our Board has determined that, based on her professional
qualifications and experience described above, Ann is an audit
committee financial expert as defined under the rules of the SEC,
and that each member of the Audit Committee is able to read and
understand fundamental financial statements as required by the
Listing Rules of NASDAQ.
ALPHABET ● 2023 PROXY
STATEMENT 31
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
| Leadership
Development, Inclusion and Compensation
Committee |
|
|
|
The purpose of the Compensation Committee is to oversee our
leadership development and compensation programs for the members of
our Board and our employees. The Compensation Committee reports
regularly to our full Board on its activities. The Compensation
Committee’s responsibilities include but are not limited to:
|
● |
Establishing,
overseeing, and administering employee compensation, benefits, and
perquisites policies, programs, and strategy and overseeing related
risks. |
|
● |
Reviewing and
approving compensation programs and awards for Alphabet’s executive
officers and non-employee directors (together with the Governance
Committee). |
|
● |
Administering
Alphabet’s equity compensation plans as well as stock ownership
requirements for Alphabet’s Chief Executive Officer and other
members of senior management. |
|
● |
Establishing
annual and long-term performance goals for our senior
management. |
|
● |
Reviewing
senior management development, retention, and succession plans and
executive education. |
|
● |
Annually
conducting and reviewing with the Board an evaluation of senior
management performance. |
|
● |
Overseeing
human capital management matters, including with respect to
diversity and inclusion, workplace environment and safety, and
management’s efforts to promote a workplace environment and culture
that is healthy, vibrant, inclusive, respectful and free from
employment discrimination, including harassment and
retaliation. |
|
● |
Reviewing and
approving peer companies for compensation benchmarking
purposes. |
|
● |
Investigating
any matters brought to its attention, with full access to all
books, records, facilities, and employees. |
|
● |
Sole authority
to retain and oversee the engagement of compensation consultants,
legal counsel, or other advisors to advise the Compensation
Committee at the expense of Alphabet. |
|
● |
Reviewing with
management our annual Compensation Discussion and Analysis
(CD&A). |
| ● |
Preparing and
approving the annual Leadership Development, Inclusion and
Compensation Committee Report. |
During 2022, the Compensation Committee held six meetings and acted
by unanimous written/electronic consent thirteen times.
The Compensation Committee currently comprises Robin (Chair), L.
John Doerr, and Ram, each of whom is a non-employee member of our
Board. Our Board has determined that each of the directors serving
on the Compensation Committee is independent as defined in the
Listing Rules of NASDAQ.
ALPHABET ● 2023 PROXY
STATEMENT 32
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
| Nominating
and Corporate Governance Committee |
|
|
|
The Governance Committee’s purpose is to assist our Board in
identifying individuals qualified to become members of our Board
consistent with criteria set by our Board and as provided in the
Corporate Governance Guidelines, to oversee the evaluation of the
Board and management, and to develop and update our corporate
governance principles. The Governance Committee’s responsibilities
include but are not limited to:
|
● |
Evaluating
Board and Committee composition, including diversity, size, tenure,
organization, and governance and determining future
requirements. |
|
● |
Establishing a
policy for considering director nominees; evaluating and
recommending candidates for election consistent with Board-approved
criteria and as provided by the Corporate Governance
Guidelines. |
|
● |
Reviewing the
chair of each committee and making recommendations to our
Board. |
|
● |
Reviewing and
recommending to our Board director independence
determinations. |
|
|
● |
Taking a
leadership role in shaping Alphabet’s corporate governance,
including reviewing the corporate governance framework and
considering corporate governance issues that may arise from time to
time, and developing appropriate recommendations to our
Board. |
|
|
● |
Evaluating
stockholder proposals submitted to Alphabet for consideration at
the annual meeting of stockholders and providing appropriate
oversight. |
|
● |
Recommending
ways to enhance communications and relations with our
stockholders. |
|
● |
Overseeing
risks and exposures associated with director and management
succession planning, corporate governance, and overall Board
effectiveness. |
|
● |
Overseeing our
Board’s performance and annual self-evaluation process and
developing continuing education programs for our
directors. |
|
● |
Evaluating
whether a director who notifies our Board of a change in job
responsibilities, including with respect to commitments on other
boards, continues to satisfy the Board’s membership criteria and
independence requirements. |
| ● |
Evaluating and
recommending termination of service of individual directors to the
Board as appropriate, in accordance with governance principles, for
cause or for other proper reasons. |
During 2022, the Governance Committee held four meetings and acted
by written/electronic consent once.
The Governance Committee currently comprises John L. Hennessy
(Chair) and Frances, each of whom is a non-employee member of our
Board. Our Board has determined that each of the directors serving
on the Governance Committee is independent as defined in the
Listing Rules of NASDAQ.
The Executive Committee serves as an administrative committee of
our Board to act upon and facilitate the consideration by senior
management and our Board of certain high-level business and
strategic matters. During 2022, the Executive Committee did not
hold any meetings. The Executive Committee currently comprises
Larry (Chair), Sergey, and Sundar.
ALPHABET ● 2023 PROXY
STATEMENT 33
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Director Independence
Our Board has adopted independence standards that mirror the
criteria specified by applicable laws and regulations of the SEC
and the Listing Rules of NASDAQ. Our Board has determined that Alan
Mulally, who served as a member of our Board and the Audit
Committee until June 2, 2022, and each of the director nominees
standing for election, except Larry, Sergey, and Sundar are
independent directors under these standards. In determining the
independence of our directors, our Board considered all
transactions in which we and any director had any interest,
including those discussed under “Certain Relationships and Related
Transactions” on pages 41-43 of this proxy statement, transactions
involving payments made by us to companies in the ordinary course
of business where certain of our directors serve on the board of
directors or as a member of the executive management team of the
other company, and transactions involving payments made by us to
educational institutions with director affiliations.
Compensation Committee Interlocks and Insider
Participation
During 2022, L. John Doerr, Ram, and Robin served on the
Compensation Committee. None of the members of the Compensation
Committee has been an officer or employee of Alphabet. None of our
executive officers serves on the board of directors or compensation
committee of a company that has an executive officer that serves on
our Board or the Compensation Committee.
Consideration of Director Nominees
Stockholder Recommendations and Nominees
The Governance Committee, a standing committee of our Board,
considers properly submitted recommendations for candidates to our
Board from stockholders. In evaluating such recommendations, the
Governance Committee evaluates candidates recommended by
stockholders using the same criteria it applies to evaluate other
candidates and seeks to achieve a balance of experience, knowledge,
integrity, and capability on our Board and to address the
membership criteria set forth under “Director Selection Process and
Qualifications” below.
Any stockholder recommendations for consideration by the Governance
Committee should include the candidate’s name, biographical
information, information regarding any relationships between the
candidate and the company within the last three years, at least
three personal references, a statement of recommendation of the
candidate from the stockholder, a description of our shares
beneficially owned by the stockholder, a description of all
arrangements between the candidate and the recommending stockholder
and any other person pursuant to which the candidate is being
recommended, a written indication of the candidate’s willingness to
serve on our Board, any other information required to be provided
under securities laws and regulations, and a written indication to
provide such other information as the Governance Committee may
reasonably request. There are no differences in the manner in which
the Governance Committee evaluates nominees for director based on
whether the nominee is recommended by a stockholder or otherwise.
Stockholder recommendations to our Board should be sent to us by
one of the following two ways:
In addition, our bylaws permit stockholders to nominate directors
for consideration at an annual meeting. For a description of the
process for nominating directors in accordance with our bylaws, see
“Questions and Answers about the Proxy Materials and the Annual
Meeting—Question 27. What is the deadline to propose actions for
consideration at next year’s Annual Meeting of Stockholders or to
nominate individuals to serve as directors?” on page 114 of this
proxy statement.
Director Selection Process and Qualifications
The Governance Committee will evaluate and recommend candidates for
membership on our Board consistent with criteria established by our
Board in our policy with regard to the selection of director
nominees. Pursuant to this policy, the Governance Committee screens
candidates and evaluates the qualifications of the persons
nominated by or recommended by our stockholders. The Governance
Committee recommends director nominees who are ultimately approved
by the full Board.
ALPHABET ● 2023 PROXY
STATEMENT 34
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Identification of Nominees
The Governance Committee uses a variety of methods for identifying
and evaluating nominees for directors. The Governance Committee
regularly assesses the appropriate size and composition of our
Board, the needs of our Board and the respective committees of our
Board, and the qualifications of candidates in light of these
needs. Candidates may come to the attention of the Governance
Committee through stockholders, management, current members of our
Board, or search firms. The evaluation of these candidates may be
based solely upon the information provided to the Governance
Committee or may also include discussions with persons familiar
with the candidate, an interview of the candidate, or other actions
the Governance Committee deems appropriate, including the use of
third parties to review candidates. The Governance Committee may,
at Alphabet’s expense, retain search firms, consultants, and other
advisors to identify, screen, and/or evaluate candidates.
Evaluation and Selection
When considering a potential non-incumbent candidate, the criteria
with regard to the selection of director nominees reflect at a
minimum any requirements of applicable law or listing rules of
NASDAQ. Further, the Governance Committee will factor into its
determination the following qualities, among others: integrity,
professional reputation and strength of character, judgment,
educational background, specific areas of expertise and knowledge
of the industries in which we operate, diversity of professional
experience, including whether the person is a current or former
chief executive officer or chief financial officer of a public
company or the head of a division of a large international
organization, and ability to represent the best interests of our
stockholders as a whole rather than special interest groups or
constituencies, and to provide practical insights and diverse
perspectives.
Diversity Criteria
Additionally, due to the global and complex nature of our business,
our Board believes it is important to consider diversity of race,
ethnicity, gender identity, age, education, skills, cultural
background, and professional experiences in evaluating board
candidates. Accordingly, when evaluating candidates for nomination
as new directors, the Governance Committee will consider, and will
ask any search firm that it engages to provide, a set of candidates
that includes both underrepresented people of color and different
genders. Candidates also are evaluated in light of our other
policies, such as those relating to independence and service on
other boards, as well as considerations relating to the size,
structure, and needs of our Board. As part of its consideration of
director succession, our Board and the Governance Committee monitor
whether the directors as a group meet the criteria for the
composition of our Board, including overall diversity of
perspective and experience.
The Governance Committee and our Board believe that the
above-mentioned attributes, along with the leadership skills and
other experiences of our Board members described in their
respective biographies on pages 23-26 provide us with a diverse
range of perspectives and judgment necessary to guide our
strategies and monitor their execution.
Director Service on Outside Boards and Other
Commitments
Each member of our Board is expected to ensure that other existing
and future commitments, including employment responsibilities and
service on the boards of other entities, do not materially
interfere with the member’s service as a director on our Board. The
Governance Committee regularly reviews our Board members’ outside
commitments for conflicts of interest and other concerns.
Our Board has adopted a policy that the maximum number of public
company boards our directors can serve on is four, including
membership on the Alphabet Board. All of our directors are in
compliance with this policy.
Management Succession Planning
One of our Board’s principal duties is to review management
succession planning. The Compensation Committee reviews at least
annually and recommends to the full Board plans for the
development, retention, and replacement of executive officers,
including the Chief Executive Officer of Alphabet. Additionally,
the Compensation Committee and the Governance Committee are jointly
responsible for overseeing the risks and exposures associated with
management succession planning.
Our Board believes that the directors and the Chief Executive
Officer should collaborate on succession planning and that the
entire Board should be involved in the critical aspects of the
management succession planning process, including establishing
selection criteria that reflect our business strategies,
identifying and developing internal candidates to ensure the
continuity of our culture, and making key management succession
decisions.
Management succession is regularly discussed by the directors in
meetings and in executive sessions of our Board. Directors become
familiar with potential successors for key management positions
through various means, including regular organization and talent
reviews, presentations to our Board, and informal meetings.
ALPHABET ● 2023 PROXY
STATEMENT 35
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Board’s Role in Risk Oversight
Our Board, as a whole and through its committees, has
responsibility for oversight of risk management. The oversight
responsibility of our Board and its committees is enabled by
management reporting processes, including an annual company-wide
risk assessment, that are designed to provide visibility to our
Board and its committees about the identification, assessment, and
management of critical risks and management’s risk mitigation
strategies. While our Board is ultimately responsible for risk
oversight at Alphabet, our Board has delegated to its committees
oversight of risks associated with their respective areas of
responsibility, as summarized below. When appropriate, the
committees provide reports to the full Board on these and other
areas for review. Each committee meets in executive session with
key management personnel and representatives of outside advisors as
needed.
In particular, our Board has delegated to the Audit Committee the
primary responsibility for the oversight of many of the risks
facing our businesses. The Audit Committee’s charter provides that
it will review and discuss with management any major risk
exposures, including, among others, the key areas of oversight set
forth below, and the steps Alphabet takes to detect, monitor, and
actively manage such exposures.
|
Board/Committee |
|
Primary
Areas of Risk Oversight |
|
Full
Board |
|
Strategic,
financial, and execution risks and exposures associated with our
business strategy, product innovation, sales roadmap, policy
matters, significant litigation and regulatory exposures, and other
current matters that may present material risk to our financial
performance, operations, infrastructure, plans, prospects or
reputation, acquisitions and divestitures, and data privacy,
including cybersecurity. |
|
Audit and
Compliance Committee |
|
Risks and
exposures associated with (1) financial matters, in particular,
financial strategy, financial reporting, tax, accounting,
disclosure, internal control over financial reporting, investment
guidelines and credit and liquidity matters; (2) data privacy and
security, competition, legal, regulatory, compliance, civil and
human rights, sustainability, and reputational risks; and (3) our
operations and infrastructure, particularly reliability, business
continuity, and capacity. |
|
Leadership
Development, Inclusion and Compensation Committee |
|
Risks and
exposures associated with leadership assessment, management
succession planning, and the operation and structure of our
compensation programs and arrangements, including incentive
plans. |
|
Nominating and
Corporate Governance Committee |
|
Risks and
exposures associated with director and management succession
planning, corporate governance, and overall board
effectiveness. |
Executive Sessions
Executive sessions of independent directors are held in connection
with each regularly scheduled Board meeting and at other times as
necessary, and are chaired by the Chair of our Board. Our Board’s
policy is to hold executive sessions without the presence of
management, including the Chief Executive Officer and other
non-independent directors. The committees of our Board also
generally meet in executive session at the end of each committee
meeting, except for meetings of the Executive Committee as this
committee has no independent directors.
Outside Advisors
Our Board and each of its committees may retain outside advisors,
legal counsel, and consultants of their choosing at our expense.
Our Board and its committees need not obtain management’s consent
to retain such outside advisors, legal counsel, and
consultants.
ALPHABET ● 2023 PROXY
STATEMENT 36
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Board Effectiveness, Board
Annual Self-Assessment, Board Education
Our Board and each of its committees perform an annual
self-assessment to evaluate the effectiveness of our Board and its
committees in fulfilling their respective obligations and to
identify areas for enhancement. As part of this annual
self-assessment, directors are able to provide feedback on the
performance of other directors. The self-assessment process,
including evaluation method, is reviewed annually by the Governance
Committee. A summary of the results is presented to our Board. The
Chair of the Governance Committee leads our Board in its review of
the results of the annual self-assessment and takes further action
as needed.
In
addition, all members of our Board have the opportunity and are
encouraged to attend director education programs to assist them in
remaining current with best practices and developments in corporate
governance.
Engagement
We proactively engage with our stockholders and other stakeholders
throughout the year on a broad range of topics that are of interest
and priority to the company and our stockholders. These include
business strategy and performance, and ESG topics such as
environmental sustainability, human capital, workforce diversity,
executive compensation, and Board leadership and composition.
Our engagement enables us to better understand our stockholders’
priorities and perspectives, gives us an opportunity to elaborate
on our initiatives, policies, and practices, and fosters open and
constructive dialogue. We share the feedback from these
conversations with our Board, which considers these perspectives as
part of its evaluation and review of our practices including those
on governance, compensation, and ESG matters. This engagement also
provides us an opportunity to understand investor perspectives on
topics raised in stockholder proposals and to provide insight into
our Board, management team, and subject matter experts as they
consider our practices and disclosures.
Throughout the year, we engage with institutional stockholders who
hold a significant portion of our outstanding stock. Investor
Relations in coordination with the Corporate Secretary team is
responsible for leading our stockholder outreach, which may also
include members of our senior executive team, management, and other
experts across Alphabet, such as our Chief Sustainability Officer
and Global Head of Human Rights, as appropriate.
ALPHABET ● 2023 PROXY
STATEMENT 37
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Communications with our Board
Stockholders may contact our Board about bona fide issues or
questions concerning Alphabet by sending an email or by writing to
the Corporate Secretary as follows:
|
|
|
| |
|
|
Alphabet Inc.
Attn: Corporate Secretary
1600 Amphitheatre Parkway
Mountain View, California 94043
|
Email: directors@abc.xyz
|
Any matter intended for our Board, or for any individual member or
members of our Board, should be directed to the email address or
street address noted above, with a request to forward the
communication to the intended recipient or recipients. In general,
any stockholder communication about bona fide issues concerning
Alphabet delivered to the Corporate Secretary for forwarding to our
Board or specified member or members will be forwarded in
accordance with the stockholder’s instructions.
ALPHABET ● 2023 PROXY
STATEMENT 38
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information, as of April 4, 2023,
concerning, except as indicated by the footnotes below:
| ● |
Each person whom we know
beneficially owns more than five percent of our Class A common
stock or Class B common stock. |
| ● |
Each of our directors and
nominees for our Board. |
| ● |
Each of our named
executive officers (see the section titled “Executive Compensation”
beginning on page 46 of this proxy statement). |
| ● |
All of our directors and
executive officers as a group. |
Unless otherwise noted below, the address of each beneficial owner
listed in the table is c/o Alphabet Inc., 1600 Amphitheatre
Parkway, Mountain View, California 94043.
We have determined beneficial ownership in accordance with the
rules of the SEC. Except as indicated by the footnotes below, we
believe, based on the information furnished to us, that the persons
and entities named in the table below have sole voting and
investment power with respect to all shares of common stock that
they beneficially own, subject to applicable community property
laws.
Applicable percentage ownership is based on 5,943,457,010 shares of
Class A common stock and 882,702,042 shares of Class B common stock
outstanding at April 4, 2023. In computing the number of shares of
Class A and Class B common stock beneficially owned by a person and
the percentage ownership of that person, we deemed outstanding
shares of Class A common stock subject to options held by that
person that are currently exercisable within sixty days of April 4,
2023 to be outstanding, ignoring the withholding of shares of
common stock to cover applicable taxes. We did not deem these
shares outstanding, however, for the purpose of computing the
percentage ownership of any other person. Beneficial ownership
representing less than one percent is denoted with an asterisk
(*).
The information provided in the table is based on our records,
information filed with the SEC, and information provided to us,
except where otherwise noted. Non-voting Class C capital stock is
not included in the table.
| |
|
Voting
Shares Beneficially Owned |
|
|
| |
|
Class A
Common Stock |
|
Class B
Common Stock |
|
Total
Voting |
|
Name of
Beneficial Owner |
|
Shares |
|
% |
|
Shares |
|
% |
|
Power(1)
% |
|
Executive
Officers and Directors |
|
|
|
|
|
|
|
|
|
|
|
Larry
Page |
|
— |
|
— |
|
389,051,160 |
|
44.1 |
|
26.3 |
|
Sergey
Brin(2) |
|
— |
|
— |
|
368,712,520 |
|
41.8 |
|
25.0 |
|
Sundar
Pichai |
|
227,560 |
|
* |
|
— |
|
— |
|
* |
|
Ruth M.
Porat(3) |
|
28,060 |
|
* |
|
— |
|
— |
|
* |
|
Prabhakar
Raghavan |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Philipp
Schindler |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Kent
Walker |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Frances H.
Arnold |
|
— |
|
— |
|
— |
|
— |
|
— |
|
R. Martin
“Marty” Chávez |
|
— |
|
— |
|
— |
|
— |
|
— |
|
L. John
Doerr(4) |
|
2,911,880 |
|
* |
|
22,348,940 |
|
2.5 |
|
1.5 |
|
Roger W.
Ferguson Jr. |
|
— |
|
— |
|
— |
|
— |
|
— |
|
John L.
Hennessy(5) |
|
33,160 |
|
* |
|
— |
|
— |
|
* |
|
Ann
Mather |
|
16,720 |
|
* |
|
— |
|
— |
|
* |
|
K. Ram
Shriram(6) |
|
2,605,740 |
|
* |
|
— |
|
— |
|
* |
|
Robin L.
Washington |
|
— |
|
— |
|
— |
|
— |
|
— |
|
All executive
officers and directors as a group (15 persons) |
|
5,823,120 |
|
* |
|
780,112,620 |
|
88.4 |
|
52.9 |
|
Other >
5% Security Holders |
|
|
|
|
|
|
|
|
|
|
|
BlackRock,
Inc.(7) |
|
416,003,093 |
|
7.0 |
|
— |
|
— |
|
2.8 |
|
Eric E.
Schmidt(8) |
|
6,966,070 |
|
* |
|
60,929,262 |
|
6.9 |
|
4.2 |
|
The Vanguard
Group(9) |
|
482,277,696 |
|
8.1 |
|
— |
|
— |
|
3.3 |
ALPHABET ● 2023 PROXY
STATEMENT 39
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
| (1) |
Percentage
total voting power represents voting power with respect to all
shares of our Class A common stock and Class B common stock, voting
together as a single class. Each holder of Class B common stock is
entitled to ten (10) votes per share of Class B common stock, and
each holder of Class A common stock is entitled to one (1) vote per
share of Class A common stock on all matters submitted to our
stockholders for a vote. The Class A common stock and Class B
common stock vote together as a single class on all matters
submitted to a vote of our stockholders, except as may otherwise be
required by law. The Class B common stock is convertible at any
time by the holder into shares of Class A common stock on a
share-for-share basis upon written notice to the transfer
agent. |
| (2) |
Includes (i)
172,700 shares of Class B common stock held by SMB Pacific 2021
Charitable Remainder Unitrust I, of which Sergey is the sole
trustee; and (ii) 172,700 shares of Class B common stock held
by SMB Pacific 2021 Charitable Remainder Unitrust II, of which
Sergey is the sole trustee. The address for SMB Pacific 2021
Charitable Remainder Unitrust I and SMB Pacific 2021 Charitable
Remainder Unitrust II is 555 Bryant Street, #376, Palo Alto,
California 94301. |
| (3) |
Consists of
28,060 shares of Class A common stock held by the Passfield Hall
Foundation Inc. Ruth and her spouse are officers of the Passfield
Hall Foundation Inc. and share voting and investment authority of
the shares held by the Foundation. Ruth disclaims any pecuniary
interest in shares held by the Passfield Hall Foundation Inc. The
address for the Passfield Hall Foundation Inc. is 1251 Avenue of
the Americas, 9th Floor, New York, New York 10020-1104. |
| (4) |
Includes
234,560 shares of Class A common stock held by The Austin 1999
Trust; 234,560 shares of Class A common stock held by The Hampton
1999 Trust; 2,373,060 shares of Class A common stock held by The
Benificus Foundation; and 22,348,940 shares of Class B common stock
held by Vallejo Ventures Trust. John is a trustee of The Austin
1999 Trust and The Hampton 1999 Trust and has voting and investment
authority over the shares held by these trusts. John disclaims any
pecuniary interest in these trusts. John is an officer and trustee
of The Benificus Foundation and shares the investment authority
over the shares held by The Benificus Foundation. John disclaims
any pecuniary interest in the shares held by The Benificus
Foundation. John is a trustee of Vallejo Ventures Trust and shares
voting and investment authority over the shares held by such trust.
The address for The Austin 1999 Trust and The Hampton 1999 Trust is
c/o Kleiner Perkins, 2750 Sand Hill Road, Menlo Park, California
94025. The address for The Benificus Foundation and Vallejo
Ventures Trust is 1180 San Carlos Ave., #717, San Carlos,
California 94070. |
| (5) |
Consists of
33,160 shares of Class A common stock held by the Hennessy 1993
Revocable Trust. John is a trustee of the Hennessy 1993 Revocable
Trust and has voting and investment authority over the shares held
by the Trust. The address for the Hennessy 1993 Revocable Trust is
580 Lomita Drive, Stanford, California 94305. |
| (6) |
Includes (i)
123,320 shares of Class A common stock held by Ram’s spouse; (ii)
337,680 shares of Class A common stock held by Janket Ventures
Limited Partnership; (iii) 734,324 shares of Class A common stock
held by the 2021 RS Irrevocable Trust UAD 9/10/2021, of which Ram
is the sole trustee (the 2021 RS GRAT); (iv) 734,324 shares of
Class A common stock held by the 2021 VS Irrevocable Trust UAD
9/10/2021, of which Ram’s spouse is the sole trustee (the 2021 VS
GRAT); (v) 265,676 shares of Class A common stock held by the 2022
RS Irrevocable Trust UAD 10/28/2022, of which Ram is the sole
trustee (the 2022 RS GRAT); and (vi) 265,676 shares of Class A
common stock held by the 2022 VS Irrevocable Trust UAD 10/28/2022,
of which Ram’s spouse is the sole trustee (the 2022 VS GRAT). Each,
the 2021 RS GRAT, the 2021 VS GRAT, the 2022 RS GRAT, and the 2022
VS GRAT (each, a GRAT, and collectively, the GRATs) has a 5-year
term. During the term, Ram and his spouse each have sole voting and
sole dispositive power over the shares held by the respective GRAT.
Ram has voting and investment authority over the shares held by
Janket Ventures Limited Partnership. The address for Janket
Ventures L.P. and for all GRATs is 2475 Hanover Street, Suite 100,
Palo Alto, California 94303. |
| (7) |
Based on the
most recently available Schedule 13G/A filed with the SEC on
February 1, 2023 by BlackRock, Inc. BlackRock, Inc., a parent
holding company through certain of its subsidiaries, beneficially
owned 416,003,093 shares of Class A common stock with sole voting
power over 370,294,917 shares and sole dispositive power over
416,003,093 shares. The address for BlackRock, Inc. is 55 East 52nd
Street, New York, New York 10055. |
| (8) |
Based on the
most recently available Schedule 13G/A filed with the SEC on
February 14, 2023 by Eric E. Schmidt, The Schmidt Family Living
Trust, The Schmidt Family Foundation, and The Eric and Wendy
Schmidt Fund for Strategic Innovation. Includes 2,993,760 shares of
Class A common stock held by The Schmidt Family Foundation, of
which Mr. Schmidt is a member of the board and vice president;
3,655,950 shares of Class A common stock held by The Eric and Wendy
Schmidt Fund for Strategic Innovation, of which Mr. Schmidt is a
member of the board and president; 6,291,300 shares of Class B
common stock held by the Schmidt Investments L.P. of which The
Schmidt Family Living Trust is the sole general partner; and
47,723,980 shares of Class B common stock held by The Schmidt
Family Living Trust of which Mr. Schmidt is a co-trustee. The
address for Eric E. Schmidt, The Schmidt Family Living Trust, The
Schmidt Family Foundation and The Eric and Wendy Schmidt Fund for
Strategic Innovations is 1010 El Camino Real, Suite 200, Menlo
Park, California 94025. |
| (9) |
Based on the most recently
available Schedule 13G/A filed with the SEC on February 9, 2023 by
The Vanguard Group. The Vanguard Group, an investment adviser,
beneficially owned through certain of its subsidiaries 482,277,696
shares of Class A common stock, with shared voting power over
8,825,739 shares, sole dispositive power over 457,351,119 shares,
and shared dispositive power over 24,926,577 shares. The address
for The Vanguard Group is 100 Vanguard Boulevard, Malvern,
Pennsylvania 19355. |
— DELINQUENT
SECTION 16(A) REPORTS
Section 16(a) of the Exchange Act requires our directors, executive
officers, and persons who own more than ten percent of our Class A
common stock, Class B common stock, and our Class C capital stock
to file with the SEC reports of ownership of our securities and
changes in reported ownership. Based on a review of reports filed
with the SEC, or written representations from reporting persons
that all reportable transactions were reported, we believe that,
during 2022, our directors, executive officers, and ten percent
stockholders timely filed all reports that were required to be
filed under Section 16(a), except: (i) Marty’s grant of 8,824
shares of Class C GSUs on August 3, 2022 was reported on Form 4
filed with the SEC on August 9, 2022; (ii) Kent’s sale of 34,809
shares of Class C capital stock on September 28, 2022 was reported
on Form 4 filed with the SEC on October 3, 2022; and (iii) Ruth’s
charitable donation of 300 shares of Class C capital stock on
August 23, 2021 was reported on Form 5 filed with the SEC on
February 13, 2023.
In making this statement, we have relied upon examination of the
copies of Forms 3, 4, and 5, and amendments to these forms provided
to us, and the written representations of our directors, executive
officers, and ten percent stockholders.
ALPHABET ● 2023 PROXY
STATEMENT 40
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
— RELATED
PARTY TRANSACTIONS POLICY AND PROCEDURE
Our written Related Party Transactions Policy provides that we will
only enter into or ratify a transaction with a related party when
our Board, acting through the Audit Committee, determines that the
transaction is in the best interests of Alphabet and our
stockholders.
For the purposes of this policy, a related party means:
| ● |
a member of our Board (or a nominee
to our Board); |
| ● |
an executive officer; |
| ● |
any person who
is known to be the beneficial owner of more than five percent of
any class of our voting securities; |
| ● |
any immediate
family member of any of the persons listed above and any person
(other than a tenant or employee) sharing the household of such
persons; or |
| ● |
any firm, corporation, partnership,
or other entity in which any of the persons listed above is a
general partner or principal or in a similar position or in which
any of the persons listed above has a five percent or greater
beneficial ownership interest. |
A related party is not deemed to have a direct or indirect material
interest in a transaction and such transaction is not a related
party transaction under our policy if such related party’s interest
in such transaction arises only from an ownership interest of less
than five percent in, or as a director of, such entity that is a
party to the transaction.
We review all known relationships and transactions in which
Alphabet and our directors, executive officers, and significant
stockholders or their immediate family members are participants to
determine whether such persons have a direct or indirect interest.
Our legal staff, in consultation with our finance team, is
primarily responsible for developing and implementing processes and
controls to obtain information regarding our directors, executive
officers, and significant stockholders with respect to related
party transactions and then determining, based on the facts and
circumstances, whether Alphabet or a related party has a direct or
indirect interest in these transactions. On a periodic basis, our
legal and finance teams review all transactions involving payments
between Alphabet and any company that has our executive officer or
director as an officer or director. In addition, our directors and
executive officers are required to notify us of any potential
related party transactions and provide us with the information
regarding such transactions.
If our legal department determines that a transaction is a related
party transaction, the Audit Committee must review the transaction
and either approve or disapprove it. If advance approval of a
transaction is not feasible, the chair of the Audit Committee may
approve the transaction, and the Audit Committee may ratify the
transaction in accordance with the Related Party Transactions
Policy. In determining whether to approve or ratify a transaction
with a related party, the Audit Committee will take into account
all of the relevant facts and circumstances available to it,
including, among any other factors it deems appropriate:
| ● |
the benefits to us of the
transaction; |
| ● |
the nature of the related party’s
interest in the transaction; |
| ● |
whether the
transaction would impair the judgment of a director or executive
officer to act in the best interests of Alphabet and our
stockholders; |
| ● |
the potential impact of the
transaction on a director’s independence; and |
| ● |
whether the transaction is on terms
no less favorable than terms generally available to an unaffiliated
third party under the same or similar circumstances. |
Any member of the Audit Committee who is a related party with
respect to a transaction under review may not participate in the
deliberations or vote on the approval of the transaction.
If a related party transaction will be ongoing, the Audit Committee
may establish guidelines for us to follow in our ongoing dealings
with the related party. Thereafter, the Audit Committee, on at
least an annual basis, will review and assess ongoing relationships
with the related party to monitor compliance with the Audit
Committee’s guidelines and that the related party transaction
remains appropriate. Based on all relevant facts and circumstances,
the Audit Committee will determine if it is in the best interests
of Alphabet and its stockholders to continue, modify, or terminate
the related party transaction.
ALPHABET ● 2023 PROXY
STATEMENT 41
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
— RELATED
PARTY TRANSACTIONS
Indemnification Agreements
We have entered into an indemnification agreement with each of our
directors and executive officers. The indemnification agreements,
our certificate of incorporation, and bylaws require us to
indemnify our directors and executive officers to the fullest
extent permitted by Delaware law.
Use of Moffett Airfield
Pursuant to a 60-year lease agreement with NASA in early 2015, we
became the operator of Moffett Airfield (the Airfield). Larry,
Sergey, Eric E. Schmidt, and Ram, through their affiliated entities
(the Founder Entities), have historically used and paid NASA
applicable fees for the use of the Airfield for their personal
aircraft. As the operator of the Airfield, we charge the Founder
Entities fees for the use of the Airfield that are (i)
non-preferential when compared to the fees charged to other private
customers landing aircraft at the Airfield, and (ii) derived from
rate schedules that are consistent with what an independent
airfield services company believes, based on its industry
experience, to be arm’s-length terms that are fair and reasonable
to us as the operator. From the beginning of 2022 through March 31,
2023, we charged the Founder Entities approximately $1,941,587.
These flights have not interfered with our business plans for use
of the Airfield. The Audit Committee regularly reviews these fees.
Larry, Sergey, Eric, and Ram do not have a material interest in any
of the transactions described above.
License of Hangar Space at Moffett Airfield
In December 2015, we entered into an agreement to license a portion
of our hangar space at the Airfield to LTA Research &
Exploration LLC (LTA), which is owned by an entity affiliated with
Sergey. From the beginning of 2022 through March 31, 2023, we
charged LTA approximately $14,484,993. The Audit Committee believes
that this transaction has been conducted on arm’s-length terms that
are fair and reasonable to us as the operator of the Airfield based
on its review of market comparables that were further reviewed and
validated by an independent real estate services firm. This license
has not interfered with our business plans for the use of the
Airfield. Sergey does not have a material interest in the
transaction described above.
License of Hangar Space at the San Jose International
Airport
In November 2015, we entered into an agreement with BCH San Jose
LLC (BCH) to license the use of a portion of BCH’s hangar space at
the Mineta San Jose International Airport to hold Google’s
corporate aircraft. Larry, Sergey, and Eric each own one-third
interests in BCH, through their respective affiliated entities.
From the beginning of 2022 through March 31, 2023, we paid
approximately $1,303,278 to BCH. The Audit Committee reviewed
market comparables and has deemed this transaction to be on terms,
taken as a whole, no less favorable to us than terms generally
available to an unaffiliated third-party under the same or similar
circumstances. Larry, Sergey, and Eric do not have a material
interest in the transaction described above.
Investments in Certain Private Companies
Google, GV, and Gradient Ventures directly invested, or committed
to invest, an aggregate of approximately $25.9 million in certain
private companies from the beginning of 2022 through March 31,
2023, in which Kleiner Perkins was a co-investor or existing
investor (excluding Viz.ai, Inc. investment described on page 43).
KPCB Holdings, Inc., as nominee for certain funds of Kleiner
Perkins and several of the managers of the fund, holds more than
10% of the outstanding shares of such private companies. In
addition, from time to time, we sell to and purchase from companies
in which Kleiner Perkins holds more than 10% of the outstanding
shares, products and services in the ordinary course of our
business. L. John Doerr is a managing director/member of the
managing members of those funds. L. John Doerr does not have a
material interest in any of the transactions described above.
Office Building Lease
In July 2017, we purchased three office buildings in Mountain View,
California, from an unaffiliated third-party seller. Pursuant to
the purchase agreement, the seller’s existing leases were
transferred to us, including a lease with Kitty Hawk Corporation
(formerly Zee.Aero, Inc.), an entity affiliated with Larry. In June
2019, the lease was divided into three separate lease agreements.
Kitty Hawk Corporation currently leases two of three buildings.
From the beginning of 2022 through March 31, 2023, we charged Kitty
Hawk Corporation approximately $2,947,443 in rent and operating
expenses to occupy these two buildings.
ALPHABET ● 2023 PROXY
STATEMENT 42
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
The third building is leased to Wisk Aero LLC, an entity affiliated
with Larry. From the beginning of 2022 through March 31, 2023, we
charged Wisk Aero LLC approximately $2,312,312.
The Audit Committee believes these transactions have been conducted
on arm’s-length terms that are fair and reasonable to us as the
owner, based on its review of market comparables that were further
reviewed and validated by an independent real estate services firm.
The Wisk Aero LLC lease does not interfere with our business plans
for the use of the building. Larry does not have a material
interest in the transactions described above.
Equity Investment in Viz.ai, Inc.
In June 2018, GV invested $5,000,000 in Viz.ai, Inc., a private
company that develops artificial intelligence assisted medical
imaging products (Viz.ai). Between August and October 2019, GV
invested an additional $6,750,000 in a subsequent round of
financing. In March 2021, GV invested an additional $2,000,000, and
in March 2022, GV invested an additional $4,000,000 in subsequent
rounds of financing. KPCB Holdings, Inc., as nominee for certain
funds of Kleiner Perkins, and Innovation Endeavors II, L.P.
co-invested in Viz. ai alongside GV. An entity affiliated with Eric
Schmidt is the sole limited partner of Innovation Endeavors II,
L.P. L. John Doerr is a General Partner of Kleiner Perkins. Kleiner
Perkins and Innovation Endeavors II, L.P. each hold less than 20%
of the outstanding equity of Viz.ai. In addition, Larry holds an
indirect investment in Viz.ai as a limited partner of a venture
fund. L. John Doerr, Eric, and Larry do not have a material
interest in the transaction described above.
Certain Relationships
From time to time, we engage in certain transactions with other
companies affiliated with our directors, executive officers, and
significant stockholders or their immediate family members. We
believe that all such arrangements have been entered into in the
ordinary course of business and have been conducted on an
arm’s-length basis and do not represent a material interest to such
parties.
ALPHABET ● 2023 PROXY
STATEMENT 43
DIRECTOR COMPENSATION
— BOARD
COMPENSATION ARRANGEMENTS FOR NON-EMPLOYEE DIRECTORS
Alphabet’s director compensation program is designed to attract and
retain highly qualified non-employee directors. Our program aligns
director compensation with compensation offered by peer companies
(identified in Section 2 of the “Compensation Discussion and
Analysis”) that compete with us for talent.
We designed the program to address the time, effort, expertise, and
accountability required of active board membership. The Governance
Committee and Compensation Committee believe that annual
compensation for non-employee directors should consist of both cash
and equity to compensate members for their service on our Board and
its committees and to align their interests with those of our
stockholders. By vesting over multiple years, equity also creates
an incentive for continued service on our Board.
The Governance Committee and the Compensation Committee jointly
review the compensation program for non-employee directors on an
annual basis. In addition, the Compensation Committee reviews the
director compensation program with and considers guidance from its
independent compensation consultants, Compensia Inc. and Semler
Brossy Consulting Group LLC.
In 2022, we awarded our standard ongoing compensation to each of
our non-employee directors, including a $75,000 annual cash
retainer payable in arrears and an annual $350,000 Class C Google
Stock Unit (GSU) grant. To John L. Hennessy, we paid an additional
$25,000 annual cash retainer and an additional annual $150,000
Class C GSU grant for his role as the non-executive Chair of our
Board. To Ann Mather, we also paid an additional $25,000 annual
cash retainer for her role as the Audit Committee Chair.
We awarded the above-mentioned cash retainers and GSU grants to our
non-employee directors on July 6, 2022, the first Wednesday of the
month following the month of our 2022 Annual Meeting of
Stockholders. GSUs entitle the holder to receive one share of
Class C capital stock for each share underlying the GSU grant
as each GSU vests. The exact number of GSUs comprising the equity
awards was calculated by dividing the target dollar value of the
award by the average closing price of Alphabet’s Class C capital
stock during the month of June 2022, rounded up to the nearest
whole share. Annual GSU grants made to our non-employee directors
are intended to vest at the rate of 1/48th monthly,
beginning on the 25th day of the month following the
grant date until fully vested, subject to continued service on our
Board through the applicable vesting dates. Effective December 17,
2019, the Compensation Committee approved an amendment to
Alphabet’s form of restricted stock unit agreement for future
grants, such that, similar to GSUs granted to all other Alphabet
employees, GSUs granted to our non-employee directors will
immediately vest in full upon termination of service on the Board
by reason of death.
R. Martin “Marty” Chávez was appointed to serve as a member of our
Board and the Audit Committee effective July 11, 2022. In
connection with his appointment, he received our standard initial
compensation for new non-employee directors consisting of a $1.0
million GSU grant made on August 3, 2022 (the first Wednesday of
the month following the effective date of his appointment). These
GSUs vest at the rate of 1/4th on the 25th
day of the month in which the grant’s first anniversary occurs, and
an additional 1/48th vests on the 25th day of each month
thereafter, subject to continued service on our Board through the
applicable vesting dates.
We reimburse our non-employee directors for reasonable
out-of-pocket expenses in connection with attendance at our Board
and committee meetings.
Under Alphabet’s Amended and Restated 2021 Stock Plan, the
aggregate amount of stock-based and cash-based awards that may be
granted to any non-employee director in respect of any calendar
year, solely with respect to his or her service as a member of our
Board, is limited to $1.5 million.
To further align directors’ interests with those of our
stockholders, each non-employee director is required to own shares
of Alphabet stock equal in value to at least $1.0 million. Each
director has five years from the date he or she became a director
to comply with these ownership requirements. All of our
non-employee directors either met the applicable minimum stock
ownership requirement as of December 31, 2022 or were within the
grace period noted above to come into compliance with these
requirements.
During 2022, Larry, Sergey, and Sundar served as our employee
directors and did not receive any compensation for their services
as members of our Board. Please see the section titled “Executive
Compensation” for more information about compensation paid to
Sundar, who was a named executive officer during 2022.
ALPHABET ● 2023 PROXY
STATEMENT 44
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
— DIRECTOR
COMPENSATION FOR 2022
The following table summarizes compensation earned by our directors
other than Sundar during 2022.
|
Name |
|
Fees Earned or
Paid in Cash
($) |
|
Stock
Awards
($)(1) |
|
All Other
Compensation
($) |
|
Total
($) |
|
Frances H. Arnold(2) |
|
75,000 |
|
359,455 |
|
— |
|
434,455 |
|
R. Martin “Marty” Chávez(3) |
|
— |
|
1,048,115 |
|
— |
|
1,048,115 |
|
Sergey Brin(4) |
|
— |
|
— |
|
1 |
|
1 |
|
L. John Doerr(5) |
|
75,000 |
|
359,455 |
|
— |
|
434,455 |
|
Roger W. Ferguson Jr.(5) |
|
75,000 |
|
359,455 |
|
— |
|
434,455 |
|
John L. Hennessy(6) |
|
100,000 |
|
511,532 |
|
— |
|
611,532 |
|
Ann Mather(5) |
|
100,000 |
|
359,455 |
|
— |
|
459,455 |
|
Alan R. Mulally(7) |
|
75,000 |
|
— |
|
— |
|
75,000 |
|
Larry Page(4) |
|
— |
|
— |
|
1 |
|
1 |
|
K. Ram Shriram(5) |
|
75,000 |
|
359,455 |
|
— |
|
434,455 |
|
Robin L. Washington(8) |
|
75,000 |
|
359,455 |
|
— |
|
434,455 |
|
(1) |
The amounts reported in the Stock Awards column reflect the
aggregate grant date fair value of GSUs granted to our non-employee
directors in 2022 calculated in accordance with Financial
Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) Topic 718 (Compensation – Stock Compensation). The grant date
fair value of each GSU award is measured based on the closing price
of Alphabet’s Class C capital stock on the date of grant. The grant
date fair value of GSUs granted to the non-employee directors on
July 6, 2022 (the GSU grant following the 2022 Annual Meeting of
Stockholders) was $115.21 per share. The grant date fair value of
GSUs granted to Marty on August 3, 2022 was $118.78 per
share. |
| (2) |
On December 31, 2022, there were 9,340 Class C GSUs outstanding
for Frances. |
| (3) |
On December 31, 2022, there were 8,824 Class C GSUs outstanding
for Marty. |
| (4) |
Co-Founders Larry and Sergey serve as employee directors and do
not receive any compensation for their services as members of our
Board. Their “All Other Compensation” reflects an annual employee
salary of $1. |
| (5) |
On December 31, 2022, there were 7,140 Class C GSUs outstanding
for John Doerr, Roger, Ann, and Ram. |
| (6) |
On December 31, 2022, there were 10,180 Class C GSUs outstanding
for John Hennessy. |
| (7) |
Alan’s term as a member of our Board and the Audit Committee
ended on June 2, 2022. |
| (8) |
On December 31, 2022, there were 8,220 Class C GSUs outstanding
for Robin. |
ALPHABET ● 2023 PROXY
STATEMENT 45
 |
EXECUTIVE COMPENSATION
TABLE OF CONTENTS
|
— COMPENSATION DISCUSSION AND
ANALYSIS
Overview
Our
Compensation Discussion and Analysis (CD&A) includes a detailed
discussion of compensation for five named executive officers during
the fiscal year ended December 31, 2022:
Section 1—Executive Summary
Compensation Philosophy
We
designed our employee and executive compensation programs to
support three goals:
|
● |
Attract and retain the
world’s best talent |
| ● |
Support our culture of
innovation and performance |
| ● |
Align employee and
stockholder interests |
We pay employees competitively compared to other opportunities
they might have in the market. We also offer competitive
benefits to promote the health and wellbeing of our employees,
provide certain perks that make life and work more convenient,
design compelling job opportunities aligned with our mission, and
create a fun and energizing work environment.
We believe in pay for performance, which is reflected in our
compensation design. The proportion of overall pay tied to
performance is higher for employees at more senior levels in the
organization, reflecting their opportunity to have more impact on
company performance.
We use equity awards that vest over time to align employee and
stockholder interests and provide incentive for continued
service. We believe that retaining and developing the best
talent over the long-term is a key factor in our business success
and ability to continue creating value for our stockholders. We
require our named executive officers and other senior executives to
maintain certain levels of holdings of Alphabet stock. See Section
4 of this CD&A for a description of our minimum stock ownership
requirements.
ALPHABET ● 2023 PROXY
STATEMENT 46
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Section 2—Determining Competitive Levels of Pay
Our executive compensation decisions are informed by competitive
market data in addition to the reviews of individual roles and
performance. We use peer group data to obtain compensation
benchmarks for our named executive officers.
Each year, we review our peer group and our evaluation criteria.
For 2022, we determined our peer group by evaluating potential peer
companies against the following criteria:
|
● |
High-technology or media
company |
|
● |
Key talent
competitor |
|
● |
High-growth,
with a minimum of 50% of Alphabet’s revenue growth and/or headcount
growth over the previous two-year period |
|
● |
$25 billion or
more in annual revenue |
|
● |
$100 billion or more in
market capitalization Considering these criteria, in October 2021,
the Compensation |
Committee selected the following peer companies for 2022 (which
were the same peer companies our Compensation Committee used for
2021):
|
Amazon.com,
Inc. |
Intel
Corporation |
Netflix,
Inc. |
|
Apple
Inc. |
International
Business Machines Corporation |
Oracle
Corporation |
|
Cisco
Systems, Inc. |
Meta
Platforms, Inc. |
Salesforce,
Inc. |
|
Comcast
Corporation |
Microsoft
Corporation |
The
Walt Disney Company |
When
appropriate, we supplement publicly available peer group data with
compensation data for comparable opportunities at other S&P 500
companies and startup organizations.
Process for Determining Compensation
We regularly review our compensation levels against our peer group
and comparable opportunities. We also assess executives based on
their individual performance and overall company performance.
Management uses this information to develop compensation
recommendations for our named executive officers. The Compensation
Committee, comprised entirely of independent directors, then
reviews these recommendations, considers any relevant guidance from
their independent compensation consultants, and makes the final
decision on compensation for our named executive officers.
Compensation Consultants
The Compensation Committee directly engaged both Compensia Inc. and
Semler Brossy Consulting Group LLC as independent compensation
consultants in 2022. The consulting firms provide input, analysis,
and guidance on Alphabet and Google’s executive compensation, peer
groups, compensation design, equity usage and allocation, risk
assessment, and human capital management. Both firms report
directly to the Compensation Committee rather than to management,
and the firms provided no services to Alphabet other than those in
support of the Compensation Committee. The Compensation Committee
has evaluated the independence of both consultants and concluded
that their work does not raise any conflicts of interest.
Say-on-Pay and Say-When-on-Pay
We hold our advisory vote on named executive officer compensation
(commonly known as a “say-on-pay” vote) every three years, and hold
our advisory vote on the frequency of future say-on-pay votes
(commonly known as “say-when-on-pay” vote) every six years. We are
holding both the advisory say-on-pay and say-when-on-pay votes at
the Annual Meeting (see Proposals Number 4 and 5 in this proxy
statement). The Compensation Committee annually reevaluates our
compensation practices to determine how they might be improved and
considers prior say-on-pay vote results, among other
considerations, in such reevaluation.
Section 3—Elements of Pay and Fiscal Year 2022 Pay
Decisions
Base Salary
We use salaries to provide employees, including our named executive
officers, a steady income in line with their contributions to our
business, skills, experiences, and the job opportunities available
to them outside of Alphabet, as appropriate.
ALPHABET ● 2023 PROXY
STATEMENT 47
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Effective January 2022, the Compensation Committee increased the
annual salaries of Ruth, Prabhakar, Philipp, and Kent from $650,000
to $1.0 million. We last adjusted senior executive base salaries
(excluding Sundar) in January 2011, and the increases were intended
to align with market compensation trends during that time period.
Sundar’s base salary remained at $2.0 million.
Environmental, Social, and Governance Bonus
In January 2022, we adopted an Environmental, Social, and
Governance Bonus (ESG Bonus) for members of Alphabet’s senior
executive team, including our named executive officers Ruth,
Prabhakar, Philipp, and Kent (ESG Participants). The ESG Bonus
provides individual participants with a maximum $2.0 million annual
cash bonus opportunity, based on contributions to the company’s
performance against environmental and social goals. The ESG Bonus
consists of two components – Environmental and Social – each with a
maximum potential payout of $1.0 million. The Compensation
Committee is responsible for determining payout of the ESG Bonus
for each ESG Participant, in conjunction with the CEO’s review of
company-wide performance and individual contributions made by each
ESG Participant.
For the Environmental component, key accomplishments include
progress toward advancing carbon-free energy across our global
operations – as of 2022, we achieved five consecutive years of 100%
renewable energy annual matching1. We also took steps to
drive net-positive impact through user engagement with Google
technologies, platforms, products, and services. For the Social
component in 2022, key accomplishments include progress toward our
DEI goals, including our 2020 Racial Equity Commitments. We also
took concrete steps to foster a culture of belonging, which helps
us better design and build products with everyone in mind. For more
information on how we are progressing toward our Environmental and
Social goals, please see our most recent Environmental Report and
Diversity Annual Report.
To acknowledge the central role each ESG Participant played, both
as individuals and as a group, in advancing progress toward
Alphabet’s Environmental and Social goals as outlined above, the
Compensation Committee decided to align the amounts of the 2022 ESG
Bonus payouts for all four individuals. Based on the strong Google
and individual performance against ESG goals in 2022, the
Compensation Committee initially proposed a bonus amount of $1.55
million for each ESG Participant. However, in light of
macroeconomic conditions, the Compensation Committee decided to
reduce ESG Bonus payouts for the ESG Participants by 50%. As a
result, each individual’s 2022 ESG Bonus payout is $775,000. While
both the Compensation Committee and the ESG Participants recognize
each ESG Participant’s strong individual performance against ESG
goals in 2022, each ESG Participant also encouraged the
Compensation Committee’s decision, in its sole discretion, to
adjust ESG bonuses downward in order to reflect macroeconomic
conditions.
Equity Awards
We grant equity awards to our named executive officers to reinforce
management’s focus on long-term stockholder value and commitment to
the company. The Compensation Committee regularly evaluates the
structure of these equity awards to ensure the right balance of
time- and performance-based equity that supports the objectives of
our compensation philosophy, aligns with our business priorities,
and considers the perspectives of our stockholders.
The Compensation Committee utilizes a combination of GSUs and
performance stock units (PSUs) to award our named executive
officers. To determine individual grant values and the proportion
of GSUs and PSUs, the Compensation Committee considers the
following elements:
|
● |
Market compensation values
and practices for performance-based equity awards, including peers
and S&P 100 companies. |
|
● |
Alphabet’s overall
business performance, and the scope of role, impact, and
performance of each recipient. |
|
● |
Each recipient’s
outstanding and unvested equity awards, and the vesting schedules
of those awards. |
|
● |
The resulting compensation
at target and maximum performance values for each
recipient. |
| 1 |
Alphabet’s renewable
energy methodology is a custom calculation and is based on a global
approach. The numerator includes all renewable energy procured,
regardless of the market in which the renewable energy was
consumed. Additional details on Alphabet’s criteria and methodology
can be found in the Achieving Our 100% Renewable Energy
Purchasing Goal and Going Beyond disclosure. |
ALPHABET ● 2023 PROXY
STATEMENT 48
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Based
on the above criteria, in 2022, the Compensation Committee
determined to grant the following equity awards for each of our
named executive officers. See the sections below and the “Grants of
Plan-Based Awards in 2022” table on page 54 for further details on
the awards’ performance criteria and vesting.
|
Named Executive |
|
Number of GSUs
Granted |
|
Target GSU
Award Value ($) |
|
Number of PSUs
Granted(1) |
|
Target PSU
Award Value ($) |
|
Aggregate
Target Award
Value ($) |
|
Grant
Cadence |
|
Sundar Pichai |
|
892,573(1) |
|
84,000,000 |
|
1,338,859 |
|
126,000,000 |
|
210,000,000 |
|
Triennial |
|
Ruth M. Porat |
|
123,600(2) |
|
18,000,000 |
|
34,340 |
|
5,000,000 |
|
23,000,000 |
|
Annual |
|
Prabhakar Raghavan |
|
157,920(2) |
|
23,000,000 |
|
82,400 |
|
12,000,000 |
|
35,000,000 |
|
Annual |
|
Philipp Schindler |
|
157,920(2) |
|
23,000,000 |
|
82,400 |
|
12,000,000 |
|
35,000,000 |
|
Annual |
|
Kent Walker |
|
123,600(2) |
|
18,000,000 |
|
34,340 |
|
5,000,000 |
|
23,000,000 |
|
Annual |
|
(1) |
The exact
number of GSUs and PSUs comprising the equity awards was calculated
by dividing the target dollar value of the award by the average
closing price of Alphabet’s Class C capital stock during the month
of November 2022 ($94.11 per share), rounded up to the nearest
whole share. |
|
(2) |
The exact number of
GSUs and PSUs comprising the equity awards was calculated by
dividing the target dollar value of the award by the average
closing price of Alphabet’s Class C capital stock during the month
of December 2021 ($145.65 per share), rounded up to the nearest
whole share. |
2022 CEO Equity Award for Sundar
The Compensation Committee currently follows a triennial grant
cadence for CEO equity awards. Sundar’s last equity award was
granted in December 2019, and fully vested at the end of December
2022. In December 2022, the Compensation Committee granted a new
equity award to Sundar to recognize his strong performance as our
CEO.
As with the 2019 award, the 2022 award consisted of both GSUs and
PSUs. The on-target value of the award was unchanged from the 2019
award. However, relative to the 2019 award, the Compensation
Committee made two design changes such that more of the award’s
vesting is dependent on performance: (1) increased the proportion
of PSUs to 60% of the total award from 43%; and (2) increased
the performance requirement for on-target PSU payout to the
55th percentile from the 50th percentile of
Alphabet’s relative total shareholder return (TSR). These changes
further align Sundar’s compensation to long-term shareholder value
creation and Alphabet’s stock performance relative to the S&P
100 over the applicable performance periods.
The GSU portion of the award vests quarterly over three years in 12
equal installments beginning March 25, 2023. The PSU portion of the
award includes two tranches. The PSUs will vest, if at all, based
on Alphabet’s TSR performance relative to the companies comprising
the S&P 100 over a 2023-2024 performance period for the first
tranche (2022 Tranche A) and over a 2023-2025 performance period
for the second tranche (2022 Tranche B), subject to continued
employment on each applicable vesting date. The number of PSUs
vesting will be determined after the end of each performance period
based on the payout curve illustrated below. Depending upon
performance, the number of PSUs that vest will range from 0%-200%
of the target number of PSUs. Upon vesting, each PSU and GSU will
entitle Sundar to receive one share of Alphabet’s Class C capital
stock.
|
(1) |
The number
of PSUs vesting will be determined by linear interpolation for
relative TSR ranks between the 25th and
55th percentile and between the
55th and 75th
percentile. |
ALPHABET ● 2023 PROXY
STATEMENT 49
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
2019 Tranche B PSU Award Vest for Sundar
The performance period for the second
tranche (2019 Tranche B) of the PSUs awarded to Sundar in December
2019 ended on December 31, 2022. Sundar’s 2019 Tranche B award
provided that if the TSR performance of Alphabet relative to
companies comprising the S&P 100 was between the 50th
percentile (for 100% payout) and the 75th percentile (for the
maximum 200% payout) for the three-year performance period ending
December 31, 2022, the PSU payout would be determined by linear
interpolation. Alphabet’s TSR for the three-year performance period
was 47.53%, which ranked Alphabet’s TSR at the 73.20th percentile.
On January 5, 2023, Sundar earned 192.78% of his target PSU award
(for a total of 1,330,260 shares of Class C capital stock) upon the
certification by the Compensation Committee based on the
satisfaction of the performance criteria underlying the
award.
2022 Equity Awards for Ruth, Prabhakar, Philipp, and
Kent
In January 2022, the Compensation Committee granted a combination
of GSUs and PSUs to our named executive officers, Ruth, Prabhakar,
Philipp, and Kent, as part of our annual equity award structure.
The 2022 equity awards are the conclusion of a multi-year
transition from the previous compensation structure of biennial GSU
awards that vested over a four-year period to our current structure
of annual awards divided into GSUs and PSUs that each vest over a
three-year period.
The GSU awards vest quarterly over three years in equal
installments beginning March 25, 2022. The PSU awards will vest, if
at all, on December 31, 2024, based on Alphabet’s TSR performance
relative to the companies comprising the S&P 100 over a
2022-2024 performance period, subject to continued employment on
the vesting date. The payout structure and time period of these
PSUs mirror the structure of the three-year performance period PSUs
granted to Sundar in 2019. The number of PSUs vesting will be
determined after the end of the performance period based on the
payout curve illustrated below. Depending upon performance, the
number of PSUs that vest will range from 0%-200% of the target
number of PSUs. Upon vesting, each PSU and GSU will entitle the
recipient to receive one share of Alphabet’s Class C capital
stock.
|
(1) |
The number of PSUs
vesting will be determined by linear interpolation for relative TSR
ranks between the 25th and 50th
percentile and between the 50th and
75th percentile. |
2023 Equity Awards for Ruth, Prabhakar, Philipp, and
Kent
In April 2023, the Compensation Committee approved annual equity
awards (GSUs and PSUs) to our named executive officers Ruth,
Prabhakar, Philipp, and Kent. The awards will be granted on May 3,
2023.
The GSUs vest quarterly from May 2023 through December 2025. The
PSUs will vest, if at all, based on the TSR performance of Alphabet
relative to the companies comprising the S&P 100 over a
2023-2025 performance period, subject to continued employment on
the vesting date. Depending upon performance, the number of PSUs
that vest will range from 0%-200% of target. Upon vesting, each GSU
and PSU will entitle the grantee to receive one share of Alphabet’s
Class C capital stock.
ALPHABET ● 2023 PROXY
STATEMENT 50
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Section 4—Other Compensation Information
The first three sections of this CD&A describe how we think
about compensation and how that affects our pay practices. Other
compensation-related details that may be important considerations
for our investors are discussed below.
Risk Considerations
The Compensation Committee reviews our compensation programs
continuously throughout the year to assess and mitigate against
material risks. In addition, in January 2023, the Compensation
Committee reviewed a comprehensive evaluation conducted by Alphabet
management of all our 2022 compensation programs and concluded that
these programs do not create risks that are reasonably likely to
have a material adverse effect on the company.
The Compensation Committee believes that the design of our annual
and long-term incentives focuses performance on long-term value
creation and discourages short-term risk taking at the expense of
long-term results. A substantial portion of employees’
compensation is delivered in the form of equity awards, further
aligning their interests with those of stockholders.
The Compensation Committee believes that the following risk
oversight and compensation design features safeguard against
excessive risk-taking:
|
● |
Our
Board as a whole has responsibility for risk oversight and
regularly reviews reports on the deliberations of its committees.
In addition, our Board reviews the strategic, financial, and
execution risks and exposures associated with the financial,
operational, and capital decisions that serve as inputs to our
compensation programs. |
|
● |
Through
discussions with management, the Compensation Committee gains
insight into a reasonable range of future company performance
expectations. This information is incorporated into decisions
regarding the compensation of our named executive
officers. |
|
● |
The
majority of compensation provided to our named executive officers
is delivered through equity awards, with payout based on long-term
company performance. Our GSUs awards vest over a long-term period,
and our PSUs awards are earned based on company performance. As the
compensation of our named executive officers is tied to long-term
performance, their interests are closely aligned with our
stockholders’ interests and they are motivated to carefully assess
risks to the company to protect their compensation. |
|
● |
Given
that equity compensation comprises a high percentage of our named
executive officers’ overall pay: |
| |
● |
Our
equity awards are subject to vesting conditions and performance
goals that promote focus on long-term interests rather than only
short-term results and create compelling incentives for executive
retention. |
| |
● |
Our named executive
officers are subject to, and are in compliance with, Alphabet’s
minimum stock ownership requirements (detailed in the Minimum Stock
Ownership Requirements section below). This ensures that each named
executive officer will hold a certain amount of our equity to
further align his or her interests with those of our stockholders
over the long term. |
| |
● |
We prohibit all
speculative, short-sale, short-term and hedging transactions
involving our securities. As a result, our named executive officers
cannot insulate themselves from the effects of poor stock price
performance. |
| |
● |
We have internal controls
over financial reporting, the measurement and calculation of
performance relative to goals, and other financial, operational,
and compliance policies and practices designed to protect our
compensation programs from manipulation by any
employee. |
Timing of Equity Award Grants
The effective grant date for equity awards to employees, members of
our Board, and non-employee advisors is typically the first
non-holiday Wednesday of the month following the date on which the
equity award is approved by the Compensation Committee, unless
otherwise specified by our Board or the Compensation Committee.
The Compensation Committee does not grant equity awards in
anticipation of the release of material nonpublic information.
Similarly, we do not time the release of material nonpublic
information based on equity award grant dates.
Minimum Stock Ownership Requirements
To align our named executive officers’ interests with those of our
stockholders, our Board has instituted minimum stock ownership
requirements under our Corporate Governance Guidelines.
In April 2022, we increased our minimum stock ownership
requirements as follows: (i) the Founders of Google and the Chief
Executive Officer of Alphabet and Google shall each own shares of
Alphabet stock equal in value to at least $35.0 million; and (ii)
senior vice presidents of Alphabet or Google shall each own shares
of Alphabet stock equal in value to at least $7.5 million.
ALPHABET ● 2023 PROXY
STATEMENT 51
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
The Chief Executive Officer of Alphabet and Google, and senior vice
presidents of Alphabet or Google shall have until the later of: (i)
April 20, 2024; or (ii) five years from hire or promotion to their
respective levels to comply with the minimum stock ownership
requirements. Alphabet advisors who do not receive annual equity
awards and the chief executive officers of Alphabet’s Other Bets
are exempt from the minimum stock ownership requirements.
All of our named executive officers met the applicable minimum
stock ownership requirements as of December 31, 2022.
Insider Trading, Hedging, and Pledging Policies
Our policy against insider trading prohibits all employees and our
non-employee directors from engaging in any speculative or hedging
transactions in our securities. We prohibit hedging transactions
such as puts, calls, collars, swaps, forward sale contracts,
exchange funds, and similar arrangements or instruments designed to
hedge or offset decreases in the market value of Alphabet’s
securities. No employee or non-employee director may engage in
short sales of Alphabet securities, hold Alphabet securities in a
margin account, or pledge Alphabet securities as collateral for a
loan.
Perquisites and Other Benefits
Like all employees, our named executive officers are eligible to
participate in various employee benefit plans, including medical,
dental, and vision care plans; flexible spending accounts for
health and dependent care; life, accidental death and
dismemberment, disability, and travel insurance; survivor income
benefit; employee assistance programs (e.g., confidential
counseling); matching gift program; and paid time off. We also pay
life insurance premiums for all employees (other than Larry and
Sergey).
In addition, we maintain a tax-qualified 401(k) retirement savings
plan with both pre-tax and after-tax Roth savings features for
eligible employees, including our named executive officers. In
2022, we provided a company match equal to the greater of 100% of
contributions up to $3,000, or 50% of $20,500, the maximum
contribution under the Internal Revenue Code for employees younger
than 50, for a maximum match of $10,250 per employee (other than
Larry and Sergey). Our company match is fully vested at the time of
contribution. Participants are not taxed on their pre-tax
contributions or earnings on those contributions until
distribution, but pre-tax contributions and all company matching
contributions are deductible by us when made. Participants are
taxed on their after-tax Roth contributions, and all company
matching contributions and after-tax Roth contributions are
deductible by us when made.
In 2022, we paid for personal security for Sundar, and incremental
costs related to the personal use of non-commercial aircraft for
Sundar, Ruth, Prabhakar, Philipp, and Kent. Pursuant to our
Non-Commercial Aircraft Policy, which sets forth the guidelines and
procedures for the personal use of non-commercial aircraft, named
executive officers and their guests may use company aircraft with
appropriate approvals and pay tax on any associated imputed
income.
No Additional Executive Benefit Plans
Since we do not generally differentiate the benefits we offer our
named executive officers from the benefits we offer other
employees, we do not maintain any benefit plans that cover only
named executive officers. We also do not maintain any executive
retirement programs such as executive pension plans or supplemental
executive retirement plans.
— LEADERSHIP
DEVELOPMENT, INCLUSION AND COMPENSATION COMMITTEE REPORT
The Leadership Development, Inclusion and Compensation Committee
has reviewed and discussed the Compensation Discussion and Analysis
with management. Based on its review and discussions with
management, the Leadership Development, Inclusion and Compensation
Committee recommended to our Board of Directors that the
Compensation Discussion and Analysis be included in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2022 and
in this proxy statement.
LEADERSHIP DEVELOPMENT, INCLUSION AND COMPENSATION COMMITTEE
Robin
L. Washington, Chair
L.
John Doerr
K. Ram
Shriram
ALPHABET ● 2023 PROXY
STATEMENT 52
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
— 2022 SUMMARY
COMPENSATION TABLE
The
following table sets forth information regarding the compensation
paid to, or earned or received by, our named executive officers for
the fiscal years ended December 31, 2022, 2021, and 2020.
Name and
Principal Position |
|
Year |
|
Salary
($) |
(1) |
Stock
Awards
($) |
(2) |
Non-Equity
Incentive Plan
Compensation |
(3) |
All Other
Compensation
($) |
(4) |
Total
($) |
Sundar Pichai
Chief Executive Officer, Alphabet and Google, and Director |
|
2022 |
|
2,000,000 |
|
218,037,684 |
(5) |
— |
|
5,947,461 |
(10) |
225,985,145 |
| |
2021 |
|
2,000,000 |
|
— |
|
— |
|
4,322,599 |
|
6,322,599 |
|
|
2020 |
|
2,000,000 |
|
— |
|
— |
|
5,410,162 |
|
7,410,162 |
Ruth M. Porat
Senior Vice President, Chief Financial Officer, Alphabet and
Google |
|
2022 |
|
1,000,000 |
|
22,663,723 |
(6) |
775,000 |
|
15,046 |
|
24,453,769 |
| |
2021 |
|
650,000 |
|
13,995,065 |
(7) |
— |
|
17,411 |
|
14,662,476 |
|
|
2020 |
|
650,000 |
|
50,217,913 |
|
— |
|
17,770 |
|
50,885,683 |
Prabhakar Raghavan
Senior Vice President, Knowledge and Information, Google |
|
2022 |
|
1,000,000 |
|
35,295,496 |
(8) |
775,000 |
|
10,329 |
|
37,080,824 |
| |
2021 |
|
650,000 |
|
27,984,366 |
(9) |
— |
|
13,643 |
|
28,648,009 |
|
|
2020 |
|
650,000 |
|
54,585,860 |
|
— |
|
9,750 |
|
55,245,610 |
Philipp Schindler
Senior Vice President, Chief Business Officer, Google |
|
2022 |
|
1,000,000 |
|
35,295,496 |
(8) |
775,000 |
|
10,814 |
|
37,081,309 |
| |
2021 |
|
650,000 |
|
27,984,366 |
(9) |
— |
|
27,617 |
|
28,661,983 |
|
|
2020 |
|
650,000 |
|
65,501,684 |
|
— |
|
226,816 |
|
66,378,500 |
Kent Walker
President, Global Affairs, Chief Legal Officer, and Secretary,
Alphabet and Google |
|
2022 |
|
1,000,000 |
|
22,663,723 |
(6) |
775,000 |
|
12,541 |
|
24,451,264 |
| |
2021 |
|
650,000 |
|
13,995,065 |
(7) |
— |
|
12,697 |
|
14,657,762 |
|
|
2020 |
|
650,000 |
|
50,217,913 |
|
— |
|
9,750 |
|
50,877,663 |
|
(1) |
Salaries
reflect each named executive officer’s stated annual salary for the
relevant fiscal year. Salaries include amounts deferred pursuant to
Section 401(k) of the Internal Revenue Code. |
|
(2) |
Amounts
reflect the aggregate grant date fair value of GSUs and PSUs
computed in accordance with FASB ASC Topic 718 and are not
necessarily an indication of the value that will be realized if and
when vesting occurs. The grant date fair value of each GSU award is
measured based on the closing price of Alphabet’s Class C capital
stock on the date of grant. The grant date fair value of each PSU
award is measured using a Monte Carlo simulation model as PSUs
contain a market condition at the time of grant (as calculated in
accordance with FASB ASC Topic 718 and SEC Staff Accounting
Bulletin Topic 14). The Monte Carlo simulation model for the
PSUs assumes that the stock prices of Alphabet and the peer firms
follow a correlated geometric Brownian motion. Under this model,
the daily stock prices for Alphabet and peer firms were simulated
over the remaining performance period using volatilities and
correlations calculated from daily stock returns over a lookback
term from the grant date. The valuation was done under a
risk-neutral framework using the term-matched zero-coupon risk-free
interest rate derived from the Treasury Constant Maturities yield
curve on the grant date. |
|
(3) |
As
described under the “Environmental, Social, and Governance Bonus”
section, these amounts reflect ESG bonus awards paid out on March
10, 2023 for performance in 2022. |
|
(4) |
Generally
consists of our 401(k) plan or Roth plan company match of up to
$10,250 and personal use of company aircraft, unless otherwise
noted. The aggregate incremental cost of personal use of the
company aircraft is calculated based on a cost-per-flight-hour
charge developed by a nationally recognized and independent
service. The charge reflects the direct operating cost of the
aircraft, including fuel, additives and lubricants, an allocable
allowance for airframe, engine and APU maintenance and restoration,
crew travel expenses, on-board catering, and trip-related
landing/hangar/ramp fees and parking costs. This charge does not
include any fixed costs that do not change based on usage, such as
pilots’ and other employees’ salaries, home hangar expenses, and
general taxes and insurance. |
|
(5) |
The grant
date fair value of the GSU award, $79,572,883, is measured based on
the closing price of Alphabet’s Class C capital stock on the date
of grant. The grant date fair value of the PSU award, $138,464,801,
is measured using a Monte Carlo simulation model as PSUs contain a
market condition at the time of grant. Assuming the maximum
achievement of the TSR performance goals, the aggregate market
value of the PSUs on the date of grant would be $238,718,560. See
“Equity Awards” under Section 3 of the CD&A and the “Grants of
Plan-Based Awards in 2022” table for details on the GSUs and PSUs
awarded. |
|
(6) |
The grant
date fair value of the GSU award, $17,013,540, is measured based on
the closing price of Alphabet’s Class C capital stock on the date
of grant. The grant date fair value of the PSU award, $5,650,183,
is measured using a Monte Carlo simulation model as PSUs contain a
market condition at the time of grant. Assuming the maximum
achievement of the TSR performance goals, the aggregate market
value of the PSUs on the date of grant would be $9,453,802.
See “Equity Awards” under Section 3 of the CD&A and the
“Grants of Plan-Based Awards in 2022” table for details on the GSUs
and PSUs awarded. |
|
(7) |
Assuming
the maximum achievement of the TSR performance goals, the aggregate
market value of the 2021 PSUs on the date of grant would be
$10,924,058. |
|
(8) |
The grant
date fair value of the GSU award, $21,737,688, is measured based on
the closing price of Alphabet’s Class C capital stock on the date
of grant. The grant date fair value of the PSU award, $13,557,808,
is measured using a Monte Carlo simulation model as PSUs contain a
market condition at the time of grant. Assuming the maximum
achievement of the TSR performance goals, the aggregate market
value of the PSUs on the date of grant would be $22,684,720. See
“Equity Awards” under Section 3 of the CD&A and the “Grants of
Plan-Based Awards in 2022” table for details on the GSUs and PSUs
awarded. |
|
(9) |
Assuming
the maximum achievement of the TSR performance goals, the aggregate
market value of the 2021 PSUs on the date of grant would be
$21,843,616. |
| (10) |
Includes $5,935,084 for personal
security. |
ALPHABET ● 2023 PROXY
STATEMENT 53
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
— GRANTS OF
PLAN-BASED AWARDS IN 2022
The
following table provides information regarding the equity awards
granted in 2022 to our named executive officers.
| |
|
|
|
|
|
Estimated Future Payouts under
Non-Equity Incentive Plan Awards(1) |
|
Estimated Future Payouts Under
Equity Incentive Plan Awards |
|
Equity Grants |
|
|
Name |
|
Grant Date |
|
Date of
Approval of
Equity Awards
by Committee |
|
Threshold |
|
Target |
|
Maximum |
|
Threshold
(#) |
|
Target
(#) |
|
Maximum
(#) |
|
All Other
Stock Awards:
Number of
Shares of Stock
or Units
(#) |
|
Grant Date
Fair Value of
Stock Awards
($) |
(2) |
|
Sundar Pichai |
|
12/19/2022 |
|
12/19/2022 |
|
|
|
|
|
|
|
— |
|
— |
|
— |
|
892,573 |
(3) |
79,572,883 |
|
|
Sundar Pichai |
|
12/19/2022 |
|
12/19/2022 |
|
|
|
|
|
|
|
669,430 |
|
1,338,859 |
(3) |
2,677,718 |
|
|
|
138,464,801 |
|
|
Ruth M. Porat |
|
N/A |
|
N/A |
|
— |
|
2,000,000 |
|
2,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Ruth M. Porat |
|
1/5/2022 |
|
12/28/2021 |
|
|
|
|
|
|
|
— |
|
— |
|
— |
|
123,600 |
(4) |
17,013,540 |
|
|
Ruth M. Porat |
|
1/5/2022 |
|
12/28/2021 |
|
|
|
|
|
|
|
17,170 |
|
34,340 |
(4) |
68,680 |
|
— |
|
5,650,183 |
|
|
Prabhakar Raghavan |
|
N/A |
|
N/A |
|
— |
|
2,000,000 |
|
2,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Prabhakar Raghavan |
|
1/5/2022 |
|
12/28/2021 |
|
|
|
|
|
|
|
— |
|
— |
|
— |
|
157,920 |
(4) |
21,737,688 |
|
|
Prabhakar Raghavan |
|
1/5/2022 |
|
12/28/2021 |
|
|
|
|
|
|
|
41,200 |
|
82,400 |
(4) |
164,800 |
|
— |
|
13,557,808 |
|
|
Philipp Schindler |
|
N/A |
|
N/A |
|
— |
|
2,000,000 |
|
2,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Philipp Schindler |
|
1/5/2022 |
|
12/28/2021 |
|
|
|
|
|
|
|
— |
|
— |
|
— |
|
157,920 |
(4) |
21,737,688 |
|
|
Philipp Schindler |
|
1/5/2022 |
|
12/28/2021 |
|
|
|
|
|
|
|
41,200 |
|
82,400 |
(4) |
164,800 |
|
— |
|
13,557,808 |
|
|
Kent Walker |
|
N/A |
|
N/A |
|
— |
|
2,000,000 |
|
2,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Kent Walker |
|
1/5/2022 |
|
12/28/2021 |
|
|
|
|
|
|
|
— |
|
— |
|
— |
|
123,600 |
(4) |
17,013,540 |
|
|
Kent Walker |
|
1/5/2022 |
|
12/28/2021 |
|
|
|
|
|
|
|
17,170 |
|
34,340 |
(4) |
68,680 |
|
— |
|
5,650,183 |
|
| (1) |
The
company’s non-equity incentive plan award plan is determined based
on the ESG bonus opportunity which consists only of a maximum of
$2,000,000 and no threshold or target value. |
| (2) |
GSUs and
PSUs are shown at their aggregate grant date fair value in
accordance with FASB ASC Topic 718. The fair value of GSUs is
measured based on the closing price of Alphabet’s Class C capital
stock on the date of grant, and the fair value of PSUs is measured
using a Monte Carlo simulation model, as PSUs contain a market
condition at the time of grant (as calculated in accordance with
FASB ASC Topic 718 and SEC Staff Accounting Bulletin
Topic 14). The Monte Carlo simulation model for the PSUs
assumes that the stock prices of Alphabet and the peer firms follow
a correlated geometric Brownian motion. Under this model, the daily
stock prices for Alphabet and peer firms were simulated over the
remaining performance period using volatilities and correlations
calculated from daily stock returns over a lookback term from the
grant date. The valuation was done under a risk-neutral framework
using the term-matched zero-coupon risk-free interest rate derived
from the Treasury Constant Maturities yield curve on the grant
date. See “Equity Awards” under Section 3 of the CD&A for
details on the GSUs and PSUs awarded. |
| (3) |
The exact
number of GSUs and PSUs comprising the equity award was calculated
by dividing the target GSU and PSU grant values by the average
closing price of Alphabet’s Class C capital stock during the month
of November 2022 ($94.11 per share), rounded up to the nearest
whole share number. |
| (4) |
The exact number of GSUs and
PSUs comprising the equity award was calculated by dividing the
target GSU and PSU grant values by the average closing price of
Alphabet’s Class C capital stock during the month of December 2021
($145.65 per share), rounded up to the nearest whole share
number. |
— DESCRIPTION
OF PLAN-BASED AWARDS
The GSUs and PSUs granted to our named executive officers in 2022
were granted under Alphabet’s Amended and Restated 2021 Stock Plan
in accordance with its terms and the applicable award agreements.
See footnotes to the “Outstanding Equity Awards at 2022 Fiscal
Year-End” table on page 55 for a description of the vesting
schedule of the GSUs and PSUs reported in the “Grants of Plan-Based
Awards in 2022” table above.
ALPHABET ● 2023 PROXY
STATEMENT 54
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
— OUTSTANDING
EQUITY AWARDS AT 2022 FISCAL YEAR-END
The
following table provides information on the current holdings of
unvested GSUs and PSUs by our named executive officers as of
December 31, 2022. There are no longer any stock options
outstanding for any of our named executive officers.
|
|
|
|
|
Stock Awards |
|
Name |
|
Grant Date |
|
Number of
Shares or
Units of Stock
That Have Not
Vested
(#) |
|
Market Value of
Shares or Units
of Stock That
Have Not
Vested
($) |
(1) |
Number of
Unearned
Shares or Units
of Stock That
Have Not
Vested
(#) |
(2) |
Market Value
of Unearned
Shares or Units
of Stock That
Have Not
Vested
($) |
(1) |
|
Sundar Pichai |
|
12/19/2022 |
(3) |
892,573 |
|
79,198,002 |
|
— |
|
— |
|
|
|
|
12/19/2022 |
(4) |
— |
|
— |
|
1,338,859 |
|
118,796,959 |
|
|
|
|
12/19/2019 |
(5) |
— |
|
— |
|
1,330,260 |
|
118,033,970 |
|
|
Ruth M. Porat |
|
1/5/2022 |
(6) |
82,400 |
|
7,311,352 |
|
— |
|
— |
|
|
|
|
1/5/2022 |
(7) |
— |
|
— |
|
34,340 |
|
3,046,988 |
|
|
|
|
4/7/2021 |
(8) |
— |
|
— |
|
48,560 |
|
4,308,729 |
|
|
|
|
5/6/2020 |
(9) |
186,380 |
|
16,537,497 |
|
— |
|
— |
|
|
Prabhakar Raghavan |
|
1/5/2022 |
(6) |
105,280 |
|
9,341,494 |
|
— |
|
— |
|
|
|
|
1/5/2022 |
(10) |
— |
|
— |
|
82,400 |
|
7,311,352 |
|
|
|
|
4/7/2021 |
(11) |
— |
|
— |
|
97,100 |
|
8,615,683 |
|
|
|
|
5/6/2020 |
(9) |
202,580 |
|
17,974,923 |
|
— |
|
— |
|
|
Philipp Schindler |
|
1/5/2022 |
(6) |
105,280 |
|
9,341,494 |
|
|
|
|
|
|
|
|
1/5/2022 |
(10) |
|
|
|
|
82,400 |
|
7,311,352 |
|
|
|
|
4/7/2021 |
(11) |
|
|
|
|
97,100 |
|
8,615,683 |
|
|
|
|
5/6/2020 |
(9) |
243,100 |
|
21,570,263 |
|
|
|
|
|
|
Kent Walker |
|
1/5/2022 |
(6) |
82,400 |
|
7,311,352 |
|
|
|
|
|
|
|
|
1/5/2022 |
(7) |
|
|
|
|
34,340 |
|
3,046,988 |
|
|
|
|
4/7/2021 |
(8) |
|
|
|
|
48,560 |
|
4,308,729 |
|
|
|
|
5/6/2020 |
(9) |
186,380 |
|
16,537,497 |
|
|
|
|
|
|
(1) |
The market
value of unvested GSUs and PSUs is calculated by multiplying the
number of unvested GSUs and PSUs held by the named executive
officer by the closing price of Alphabet’s Class C capital stock on
December 30, 2022, which was $88.73 per share. |
|
(2) |
The number
of PSUs included in the table assumes achievement of market-based
goals at the target level, except for Sundar’s 2019 Tranche B PSUs,
which are shown at a payout of 192.78% payout based on actual
performance for the performance period that ended December 31,
2022. |
|
(3) |
This
award vests as follows: 1/12th of GSUs vested on March
25, 2023 and an additional 1/12th will vest quarterly thereafter
until the units are fully vested, subject to continued employment
on such vesting dates. |
|
(4) |
This award
vests as follows: Any PSUs vesting per the applicable grant
agreement with respect to the January 1, 2023 to December 31, 2024
performance period (Target = 669,429, but between 0 and 1,338,858
may vest in accordance with the performance requirements in the
applicable grant agreement) shall vest within 45 days after
December 31, 2024 (2022 Tranche A); and any PSUs vesting per the
applicable grant agreement with respect to the January 1, 2023 to
December 31, 2025 performance period (Target = 669,430, but between
0 and 1,338,860 may vest in accordance with the performance
requirements in the applicable grant agreement) shall vest within
45 days after December 31, 2025 (2022 Tranche B). |
|
(5) |
This award
vests as follows: The number of PSUs earned per the applicable
grant will be determined by the Compensation Committee based on the
Company’s achievement of performance goals set forth in the grant
agreement and shall vest within 45 days after the performance
period ends. With respect to the January 1, 2020 to December 31,
2022 performance period (2019 Tranche B), the Compensation
Committee determined on January 5, 2023 that based on the Company’s
performance, Sundar earned 192.78% of the target number of PSUs
(1,330,260 shares) |
|
(6) |
This
award vests as follows: 1/12th of GSUs vested on May 25,
2022 and an additional 1/12th will vest quarterly
thereafter until the units are fully vested, subject to continued
employment on such vesting dates. |
|
(7) |
This award
vests as follows: The number of PSUs earned per the applicable
grant will be determined by the Compensation Committee based on the
Company’s achievement of performance goals set forth in the grant
agreement and shall vest within 45 days after the performance
period ends. With respect to the January 1, 2022 to December 31,
2024 performance period, the target is 34,340 shares, but between 0
and 68,680 shares may be earned in accordance with the market-based
performance goals. |
| (8) |
This award vests as
follows: The number of PSUs earned per the applicable grant will be
determined by the Compensation Committee based on the Company’s
achievement of performance goals set forth in the grant agreement
and shall vest within 45 days after the performance period ends.
With respect to the January 1, 2021 to December 31, 2023
performance period, the target is 48,560 shares, but between 0 and
97,100 shares may be earned in accordance with the market-based
performance goals. |
ALPHABET ● 2023 PROXY
STATEMENT 55
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
|
(9) |
This
award vests as follows: 1/8th of GSUs vested on June 25,
2020 and an additional 1/16th will vest quarterly
thereafter until the units are fully vested, subject to continued
employment on such vesting dates. |
| (10) |
This award
vests as follows: The number of PSUs earned per the applicable
grant will be determined by the Compensation Committee based on the
Company’s achievement of performance goals set forth in the grant
agreement and shall vest within 45 days after the performance
period ends. With respect to the January 1, 2022 to December 31,
2024 performance period, the target is 82,400 shares, but between 0
and 164,800 shares may be earned in accordance with the
market-based performance goals. |
| (11) |
This award vests as
follows: The number of PSUs earned per the applicable grant will be
determined by the Compensation Committee based on the Company’s
achievement of performance goals set forth in the grant agreement
and shall vest within 45 days after the performance period ends.
With respect to the January 1, 2021 to December 31, 2023
performance period, the target is 97,100 shares, but between 0 and
194,200 shares may be earned in accordance with the market-based
performance goals. |
— OPTIONS
EXERCISED AND STOCK VESTED IN FISCAL 2022
The following table provides information for the named executive
officers regarding stock option exercises during the year ended
December 31, 2022, including the number of shares acquired
upon exercise and the value realized, before payment of any
applicable withholding tax and broker commissions, and GSUs that
vested during the same period, before payment of any applicable
withholding tax.
| |
Option
Awards |
|
Stock
Awards |
|
Name |
|
Number of Shares
Acquired on
Exercise
(#) |
|
Value Realized
on Exercise
($) |
(1) |
|
Number of Shares
Acquired on
Vesting
(#) |
|
Value Realized
on Vesting
($) |
(2) |
|
Sundar Pichai |
|
345,840 |
|
39,618,219 |
|
|
1,993,460 |
|
262,060,740 |
|
|
Ruth M. Porat |
|
— |
|
— |
|
|
276,120 |
|
30,983,056 |
|
|
Prabhakar Raghavan |
|
— |
|
— |
|
|
352,320 |
|
39,532,104 |
|
|
Philipp Schindler |
|
— |
|
— |
|
|
392,820 |
|
44,077,089 |
|
|
Kent Walker |
|
— |
|
— |
|
|
276,120 |
|
30,983,056 |
|
|
(1) |
The value
realized on exercise is calculated as the product of (a) the number
of shares of Alphabet’s Class A common stock or Class C capital
stock, as applicable, for which the stock options were exercised
and (b) the excess of the closing price of Alphabet’s Class A
common stock or Class C capital stock, as applicable, on the NASDAQ
Global Select Market on the date of the exercise over the
applicable exercise price per share of the stock
options. |
| (2) |
The value realized on
vesting is calculated as the product of (a) the number of shares of
Class C capital stock underlying the GSUs that vested and (b) the
closing price of Class C capital stock on the NASDAQ Global Select
Market on the day before vesting. The value realized on vesting for
vesting events prior to our July 15, 2022 stock split is calculated
as the product of (a) the number of pre-stock split shares of Class
C Capital stock underlying the GSUs that vested and (b) the
pre-stock split closing price of Class C capital stock on the
NASDAQ Global Select market on the day before
vesting. |
— POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
We have no agreements with our named executive officers that
provide for additional or accelerated compensation upon termination
of the named executive officer’s employment or a change in control
of Alphabet, except as set forth below.
In the event of a change in control of Alphabet and, unless our
Board or the Compensation Committee determines otherwise, if the
successor corporation does not assume or substitute the equity
awards held by our employees, including our named executive
officers, all unvested stock options and unvested GSUs will fully
vest and the target number of PSUs awarded to each of our named
executive officers will fully vest.
Effective December 17, 2019, the Compensation Committee approved an
amendment to Alphabet’s form of restricted stock unit agreement for
future grants, such that, similar to GSUs granted to all other
Alphabet employees, GSUs granted to our non-employee directors and
named executive officers of Alphabet will immediately vest in full
upon termination of service on the Board, or of employment, by
reason of death.
ALPHABET ● 2023 PROXY
STATEMENT 56
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
In
respect to PSUs awarded to our named executive officers:
|
● |
Upon a termination of
employment by reason of death (i) prior to the start of the
performance period of a PSU award or during the performance period
of a PSU award, the target number of PSUs for such award will
immediately vest in full as of the date of such termination of
employment and (ii) following the end of the performance period of
an award but prior to the determination date with respect to such
award, the number of PSUs earned based on actual performance will
immediately vest as of the determination date. |
| ● |
Upon a termination of
employment by Alphabet without cause (as defined in the PSU
agreement) prior to the determination date for an award but after
the start of the performance period with respect to such award, the
number of PSUs earned based on actual performance will be prorated
based on the number of calendar days in the performance period a
named executive officer performed services and the pro rata portion
will vest as of the determination date. |
The following are our estimates of the value each of our named
executive officers would have received as the result of GSU and/or
PSU vesting, as applicable, following a change in control, death or
termination without cause (as defined in the PSU agreement)
occurring on December 31, 2022.
Upon a change in control or upon death, the estimated benefits of
equity acceleration are as follows: $259,222,211 for Sundar,
$31,204,566 for Ruth, $43,243,453 for Prabhakar, $46,838,792 for
Philipp, and $31,204,566 for Kent. These estimates were calculated
by multiplying the number of unvested GSUs and the target number of
PSUs, by the closing price of Class C capital stock on
December 30, 2022 (the last business day of Alphabet’s fiscal
year 2022), which was $88.73 per share.
The performance period for Sundar’s 2019 Tranche B PSU award ended
on December 31, 2022, and the award vested on January 5, 2023. As
such, upon termination without cause, the estimated vested equity
value for Sundar is $118,007,365, which reflects the actual value
of Sundar’s 2019 Tranche B PSU award. The value was calculated by
multiplying 192.78% of the target PSU award for Tranche B by the
closing price of Alphabet’s Class C capital stock on January 4,
2023 (the business day immediately prior to vesting), which was
$88.71 per share.
Upon termination without cause, the estimated vested equity value
is $7,774,444 for Ruth, $16,357,365 for Prabhakar, $16,357,365 for
Philipp, and $7,774,444 for Kent. The estimated vested equity value
reflects prorated achievement of market-based goals at the maximum
level for the PSU awards granted in 2021 and 2022. As of December
31, 2022, two-thirds of the performance period for the 2021 PSU
awards (January 2021 to December 2022) had been completed, and
365/1096 of the performance period for the 2022 PSU awards (January
2022 to December 2022) had been completed. The estimated vested
equity value shown was calculated by multiplying two-thirds of the
maximum number of PSUs for the 2021 PSU awards and 365/1096 of the
maximum number of PSUs for the 2022 PSU awards by the closing price
of Alphabet’s Class C capital stock on December 30, 2022 (the last
business day of Alphabet’s fiscal year 2022), which was $88.73 per
share.
— ALPHABET CEO
PAY RATIO
The following table sets forth the ratio of Alphabet Chief
Executive Officer Sundar’s total compensation to the median of the
annual total compensation of all our employees (except Sundar) for
the year ended December 31, 2022.
|
Chief
Executive Officer total compensation in 2022 |
$225,985,145 |
| Median Employee total
compensation in 2022 |
$279,802 |
| Ratio of Chief Executive
Officer to Median Employee total compensation |
808:1 |
The Chief Executive Officer total compensation reflects Sundar’s
2022 total compensation as shown in the Summary Compensation Table
on page 53, including the triennial equity award that was granted
to Sundar in December 2022. Given that CEO equity awards are
currently made on a triennial cadence, while our broad-based
employee equity awards are typically made on an annual cadence, the
pay ratio can fluctuate significantly across years. For example,
our 2020 pay ratio was 27:1; our 2021 pay ratio was 21:1; and our
2022 pay ratio is 808:1.
To determine the median employee compensation, we analyzed all of
Alphabet’s employees, excluding Alphabet’s Chief Executive Officer,
as of December 31, 2022. We annualized wages and salaries for
employees that were not employed for the full year. We used base
salary and actual bonus as the consistently applied compensation
measure to determine the median employee. If this resulted in more
than one individual at the median level, we assessed the grant date
fair value of standard equity awards for these individuals and
selected the employee with the median award value. After
identifying the median employee, we calculated annual total
compensation for the median employee according to the methodology
used to report the annual total compensation of our named executive
officers in the 2022 Summary Compensation Table on page 53.
ALPHABET ● 2023 PROXY
STATEMENT 57
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
— ALPHABET PAY
VS. PERFORMANCE
Compensation Actually Paid
As outlined in the CD&A above, the Compensation Committee has
implemented an executive compensation program that prioritizes
performance and aims to align employee and stockholder interests.
The following table sets forth additional compensation information
for our principal executive officer (PEO) and our non-PEO named
executive officers (Non-PEO NEOs), calculated in accordance with
Item 402(v) of Regulation S-K, for fiscal years 2022, 2021, and
2020.
|
Year |
|
Summary
Compensation
Table
(SCT) Total
for PEO
($) |
|
Compensation
Actually Paid to
PEO
($) |
|
Average SCT
Total for
Non-PEO NEOs
($) |
(1) |
Average
Compensation
Actually Paid to
Non-PEO NEOs
($) |
(1) |
Alphabet
TSR
($) |
(2) |
Peer Group
TSR (RDG
Internet
Composite
Index)
($) |
(2) |
Net Income
(Millions)
($) |
|
1-Year TSR
Relative to
S&P 100 |
(3) |
|
2022 |
|
225,985,145 |
|
115,820,786 |
|
30,766,792 |
|
(15,249,938 |
) |
131.03 |
|
81.50 |
|
59,972 |
|
14 |
th |
|
2021 |
|
6,322,599 |
|
267,277,583 |
|
21,657,558 |
|
72,131,743 |
|
216.42 |
|
134.41 |
|
76,033 |
|
94 |
th |
|
2020 |
|
7,410,162 |
|
121,360,289 |
|
55,846,864 |
|
76,136,650 |
|
132.73 |
|
137.32 |
|
40,269 |
|
72 |
nd |
|
(1) |
The Non-PEO
NEOs represent the following individuals for each of the years
shown: Ruth M. Porat, Prabhakar Raghavan, Philipp Schindler, and
Kent Walker. |
| (2) |
Alphabet
TSR reflects TSR for Alphabet’s Class C shares (ticker: GOOG). Peer
Group TSR is calculated based on the RDG Internet Composite index,
which is used for purposes of Item 201(e) of Regulation S-K under
the Exchange Act. The calculation is weighted according to the
constituent companies’ market capitalization at the beginning of
each period for which a return is indicated. |
| (3) |
1-Year Relative TSR is
calculated as a percentile ranking, and reflects TSR for Alphabet’s
Class C shares (ticker: GOOG) for each period as a percentile
ranking when compared to the TSR for the S&P 100 index (which
is the peer group used for purposes of the performance-based awards
outlined in the CD&A above). |
To calculate Compensation Actually Paid (CAP), the following
amounts were deducted from and added to Summary Compensation Table
(SCT) total compensation:
| |
|
2022 |
|
2021 |
|
2020 |
|
|
|
|
PEO
($) |
|
Average for
Non-PEO
NEOs
($) |
|
PEO
($) |
|
Average for
Non-PEO
NEOs
($) |
|
PEO
($) |
|
Average for
Non-PEO
NEOs
($) |
|
|
SCT Total |
|
225,985,145 |
|
30,766,792 |
|
6,322,599 |
|
21,657,558 |
|
7,410,162 |
|
55,846,864 |
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deduction for Amounts Reported Under the “Stock Awards” Column in
the SCT (i) |
|
(218,037,684 |
) |
(28,979,610 |
) |
0 |
|
(20,989,716 |
) |
0 |
|
(55,130,843 |
) |
|
Increase for Fair Value of Awards Granted during year that Remain
Unvested as of Year End (ii) |
|
213,860,445 |
|
10,808,316 |
|
0 |
|
29,055,529 |
|
0 |
|
53,762,742 |
|
|
Increase for Fair Value of Awards Granted during year that Vest
during year (ii) |
|
0 |
|
5,264,776 |
|
0 |
|
0 |
|
0 |
|
15,423,645 |
|
|
Increase/deduction for Change in Fair Value from Prior Year-end to
Current Year-end of Awards Granted Prior to year that were
Outstanding and Unvested as of Year-end (ii) |
|
(79,637,516 |
) |
(24,101,414 |
) |
234,908,651 |
|
23,361,513 |
|
108,778,718 |
|
5,059,005 |
|
|
Increase/deduction for Change in Fair Value from Prior Year-end to
Vesting Date of Awards Granted Prior to year that Vested during
year (ii) |
|
(26,349,603 |
) |
(9,008,799 |
) |
26,046,332 |
|
19,046,859 |
|
5,171,409 |
|
1,175,237 |
|
|
Compensation Actually Paid |
|
115,820,786 |
|
(15,249,938 |
) |
267,277,583 |
|
72,131,743 |
|
121,360,289 |
|
76,136,650 |
|
|
(i) |
Represents
the grant date fair value of equity-based awards granted each
year. |
| (ii) |
Reflects the value of
equity calculated in accordance with the SEC methodology for
determining CAP for each year shown. For all equity awards, our
methodology for calculating the value of equity remained consistent
between the grant date fair value measurement reflected in row (i)
and the point-in-time fair value measurements reflected in the
adjustment rows that follow. In all cases, we use the closing price
on the applicable date as a basis for fair value. Fair values for
each PSU award are measured using a Monte Carlo simulation model as
PSUs contain a market condition at the time of grant
(as calculated in accordance with FASB ASC Topic
718). |
ALPHABET ● 2023 PROXY
STATEMENT 58
|
1 |
Corporate
Governance |
2 |
Director
and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
As outlined in our CD&A, the only financial performance measure
we currently incorporate within our executive pay program is
Alphabet’s TSR relative to the companies comprising the S&P
100. As such, and as outlined below, relative TSR is the sole and
most important financial performance measure as it relates to
CAP.
|
Most
Important Performance Measures |
|
Relative Total
Shareholder Return |
The PEO’s CAP amounts are aligned with the Company’s TSR, Net
Income, and 1-Year TSR ranking relative to the S&P 100 (the
Alphabet-selected measure in the CAP table above), with the highest
PEO CAP in 2021 when Alphabet TSR, Net Income and 1-Year Relative
TSR were at their highest during the three-year period being
reported. The reported 2021 Peer Group TSR was slightly down from
2020. The reduced value of the PEO’s outstanding awards in 2022,
caused by a decline in our share price, was offset by a new equity
award granted in December 2022. For non-PEO NEOs, CAP amounts are
generally aligned with the aforementioned measures. However, 2021
was a transition year during which their equity award mix was
updated to include performance-based awards, thereby reducing the
target-value of grants compared to 2020. This resulted in a decline
in non-PEO CAP for 2021 relative to 2020, despite the increase in
the Company’s TSR, Net Income, and 1-Year TSR ranking relative to
the S&P 100 for 2021 relative to 2020.
ALPHABET ● 2023 PROXY
STATEMENT 59
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes our equity compensation plan
information as of December 31, 2022. Information is included for
equity compensation plans approved by our stockholders. As of
December 31, 2022, we did not have any active equity compensation
plans not approved by our stockholders. Neither shares of Class B
common stock nor stock options are issued and outstanding under any
of our current equity compensation plans.
|
Plan Category |
|
Class of
Common
Stock/Capital
Stock |
|
(a)
Common/
Capital
Shares to be
Issued Upon
Exercise of
Outstanding
Options and
Rights
(#) |
|
|
(b)
Common/
Capital Shares
Available for
Future Issuance
Under Equity
Compensation
Plans (Excluding
Securities
Reflected in
Column (a))
(#) |
|
|
Equity compensation plans approved by our stockholders |
|
Class A |
|
|
160 |
(1) |
|
|
— |
(2) |
|
Equity compensation plans approved by our stockholders |
|
Class C |
|
|
324,139,026 |
(3) |
|
|
706,859,701 |
(4) |
|
Total |
|
Class A and Class C |
|
|
324,139,186 |
|
|
|
706,859,701 |
(4) |
| (1) |
Consists of
GSUs representing the right to acquire shares of our Class A common
stock outstanding under our 2004 Stock Plan. |
| (2) |
We granted
Class A common stock under the 2004 Stock Plan that expired in
April 2014. No further grants may be made under the 2004 Stock
Plan. |
| (3) |
Consists of
GSUs representing the right to acquire 160 shares of Class C
capital stock outstanding under our 2004 Stock Plan, GSUs
representing the right to acquire 133,984,771 shares of Class C
capital stock outstanding under our Amended and Restated 2012 Stock
Plan, and GSUs representing the right to acquire 190,154,095 shares
of Class C capital stock outstanding under our Amended and Restated
2021 Stock Plan. |
| (4) |
Consists of
shares of Class C capital stock authorized to be issued pursuant to
the Alphabet Inc. Amended and Restated 2021 Stock Plan, which was
approved by our stockholders at the 2021 Annual Meeting of
Stockholders and amended by our stockholders at the 2022 Annual
Meeting of Stockholders. No further grants may be made under the
2004 Stock Plan and the Alphabet Inc. Amended and Restated 2012
Stock Plan. |
ALPHABET ● 2023 PROXY
STATEMENT 60
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
— PRINCIPAL
ACCOUNTANT FEES AND SERVICES
The following table sets forth all fees paid or accrued by us for
the audit and other services provided by Ernst & Young LLP
during the years ended December 31, 2021 and 2022 (in
thousands):
|
|
|
2021
($) |
|
|
2022
($) |
|
|
Audit Fees(1) |
|
|
23,880 |
|
|
|
27,676 |
|
|
Audit-Related Fees(2) |
|
|
8,715 |
|
|
|
10,474 |
|
|
Tax Fees(3) |
|
|
1,155 |
|
|
|
1,407 |
|
|
Other Fees(4) |
|
|
625 |
|
|
|
1,663 |
|
|
TOTAL FEES |
|
|
34,375 |
|
|
|
41,220 |
|
| (1) |
Audit
Fees: This category represents fees for professional
services provided in connection with the audit of our financial
statements, audit of our internal control over financial reporting,
review of our quarterly financial statements, and audit services
provided in connection with other regulatory or statutory filings
for which we have engaged Ernst & Young LLP. |
| (2) |
Audit-Related Fees: This category consists
primarily of system and organization controls reporting and other
attest services related to information systems. |
| (3) |
Tax
Fees: This category consists of tax compliance, tax
planning, and tax advice, including foreign tax return preparation
and requests for rulings or technical advice from tax
authorities. |
| (4) |
Other
Fees: This category consists of fees for permitted
services other than the services reported in audit fees,
audit-related fees, and tax fees. |
— AUDITOR
INDEPENDENCE
We maintain a policy that aims to help maintain auditor
independence and our compliance with regulatory requirements by
ensuring a process for: (1) internal and external auditor review of
proposed services for independence; and (2) pre-approval of the
services by the Audit Committee. The Audit Committee considers
whether the provision of services other than audit services is
compatible with maintaining Ernst & Young LLP’s
independence.
ALPHABET ● 2023 PROXY
STATEMENT 61
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
— PRE-APPROVAL
POLICIES AND PROCEDURES
All audit and non-audit services provided by Ernst & Young
LLP to us must be pre-approved in advance by the Audit
Committee.
If the following conditions are met, the service will be considered
pre-approved by the Audit Committee (without any further action
from the Audit Committee):
| ● |
the service is
identified as a permitted service, as determined by the Audit
Committee each year, and |
| ● |
the estimated fee for the permitted
service is less than or equal to $500,000. |
If the service does not meet the conditions noted above, explicit
approval must be obtained from the Audit Committee, or the delegate
of the Audit Committee who has been granted the authority to grant
pre-approvals, before the professional from the independent
registered accounting firm is engaged by Alphabet or its
subsidiaries to render the service. If a pre-approval is obtained
from the Audit Committee delegate, the auditor may be engaged to
commence the service, but the service must still be presented to
the full Audit Committee at its next scheduled meeting.
All services provided to us by Ernst & Young LLP in 2021
and 2022 were pre-approved by the Audit Committee.
ALPHABET ● 2023 PROXY
STATEMENT 62
REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE OF THE BOARD OF
DIRECTORS
The Audit and Compliance Committee of the Board of Directors of
Alphabet is comprised entirely of independent directors who meet
the independence requirements of the Listing Rules of the NASDAQ
Stock Market and the SEC. The Audit and Compliance Committee
operates pursuant to a charter that is available on our Investor
Relations website at https://abc.xyz/investor/other/board/#audit-committee.
The Audit and Compliance Committee oversees Alphabet’s financial
reporting process and internal control structure on behalf of our
Board. Management is responsible for the preparation, presentation,
and integrity of the financial statements and the effectiveness of
Alphabet’s internal control over financial reporting. Alphabet’s
independent auditors are responsible for expressing an opinion as
to the conformity of Alphabet’s consolidated financial statements
with generally accepted accounting principles and as to the
effectiveness of Alphabet’s internal control over financial
reporting.
In performing its responsibilities, the Audit and Compliance
Committee has reviewed and discussed with management and the
independent auditors the audited consolidated financial statements
in Alphabet’s Annual Report on Form 10-K for the year ended
December 31, 2022. The Audit and Compliance Committee has also
discussed with Ernst & Young LLP, Alphabet’s independent
auditors, the matters required to be discussed by Auditing Standard
No. 1301, “Communications with Audit and Compliance Committees”
issued by the Public Company Accounting Oversight Board
(PCAOB).
The Audit and Compliance Committee received written disclosures and
the letter from the independent auditors pursuant to the applicable
requirements of the PCAOB regarding the independent auditors’
communications with the Audit and Compliance Committee concerning
independence, and the Audit and Compliance Committee discussed with
the auditors their independence.
Based on the reviews and discussions referred to above, the Audit
and Compliance Committee unanimously recommended to our Board that
the audited consolidated financial statements be included in
Alphabet’s Annual Report on Form 10-K for the year ended December
31, 2022.
AUDIT AND COMPLIANCE COMMITTEE
Ann Mather, Chair
R. Martin “Marty” Chávez
Roger W. Ferguson Jr.
ALPHABET ● 2023 PROXY
STATEMENT 63
MANAGEMENT PROPOSALS TO BE VOTED ON
Proposal Number
1 Election of
Directors
Nominees
The Governance Committee recommended, and our Board nominated:
| ● |
Larry Page, |
| ● |
Sergey Brin, |
| ● |
Sundar Pichai, |
| ● |
John L. Hennessy, |
| ● |
Frances H. Arnold, |
| ● |
R. Martin “Marty” Chávez, |
| ● |
L. John Doerr, |
| ● |
Roger W. Ferguson Jr., |
| ● |
Ann Mather, |
| ● |
K. Ram Shriram, and |
| ● |
Robin L. Washington |
as nominees for election as members of our Board at the Annual
Meeting. At the Annual Meeting, eleven directors will be elected to
our Board.
Except as set forth below, unless otherwise instructed, the persons
appointed in the accompanying form of proxy will vote the proxies
received by them for these nominees, who are all presently
directors of Alphabet. In the event that any nominee becomes
unavailable or unwilling to serve as a member of our Board, the
proxy holders will vote in their discretion for a substitute
nominee. The term of office of each person elected as a director
will continue until the next annual meeting or until a successor
has been elected and qualified, or until the director’s earlier
death, resignation, or removal.
The sections titled “Directors and Executive Officers” and
“Director Selection Process and Qualifications” on pages 22 and 34
of this proxy statement contain more information about the
leadership skills and other experiences that caused the Governance
Committee and our Board to determine that these nominees should
serve as directors of Alphabet.
Required Vote
We have implemented a majority voting standard for elections of
directors. To be elected, a nominee must receive the affirmative
FOR vote of the holders of a majority of the voting power of
Alphabet’s shares of Class A common stock and Class B common stock
present or represented by proxy at the Annual Meeting and entitled
to vote thereon, voting together as a single class. Unless marked
to the contrary, proxies received will be voted FOR these
nominees.
Our Board expects a director to tender his or her resignation if he
or she fails to receive the required number of votes for
re-election. If an incumbent director fails to receive the required
number of votes for re-election, the Governance Committee will act
on a prompt basis to determine whether to recommend that our Board
accept the director’s resignation and will submit such
recommendation for prompt consideration by our Board. Our Board may
accept the resignation, refuse the resignation, or refuse the
resignation subject to such conditions as our Board may impose.
Additional details about this process are specified in our
Corporate Governance Guidelines, which are available on our
Investor Relations website at
https://abc.xyz/investor/other/corporate-governance-guidelines/.
Alphabet Recommendation
| OUR BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE ELECTION TO THE BOARD OF DIRECTORS
OF EACH OF THE ABOVEMENTIONED NOMINEES. |
ALPHABET ● 2023 PROXY
STATEMENT 64
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Proposal Number
2 Ratification of Appointment
of Independent Registered Public Accounting Firm
The Audit Committee has appointed Ernst & Young LLP as the
independent registered public accounting firm to audit our
consolidated financial statements for the fiscal year ending
December 31, 2023. During the fiscal year ended December 31, 2022,
Ernst & Young LLP served as our independent registered
public accounting firm and also provided certain audit-related,
tax, and other services. See “Independent Registered Public
Accounting Firm” on page 61 of this proxy statement.
The Audit Committee believes that the continued retention of
Ernst & Young LLP as our independent registered public
accounting firm is in the best interests of Alphabet and our
stockholders. Notwithstanding its selection, the Audit Committee,
in its discretion, may appoint another independent registered
public accounting firm at any time during the year if the Audit
Committee believes that such a change would be in the best
interests of Alphabet and our stockholders. If our stockholders do
not ratify the appointment, the Audit Committee may reconsider
whether it should appoint another independent registered public
accounting firm. Representatives of Ernst & Young LLP are
expected to participate in the Annual Meeting, where they will be
available to respond to appropriate questions and, if they desire,
to make a statement.
Required Vote
Ratification of the appointment of Ernst & Young LLP as
our independent registered public accounting firm for the fiscal
year ending December 31, 2023 requires the affirmative FOR vote of
the holders of a majority of the voting power of Alphabet’s shares
of Class A common stock and Class B common stock present or
represented by proxy at the Annual Meeting and entitled to vote
thereon, voting together as a single class. Unless marked to the
contrary, proxies received will be voted FOR ratification of the
appointment of Ernst & Young LLP.
Alphabet Recommendation
| OUR BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF
ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023. |
ALPHABET ● 2023 PROXY
STATEMENT 65
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Proposal Number
3 Approval of the Amendment
and Restatement of Alphabet Inc. Amended and Restated 2021 Stock
Plan
At the Annual Meeting, stockholders will be asked to approve the
amendment and restatement of the Alphabet Inc. Amended and Restated
2021 Stock Plan (the Plan), in order to increase the maximum number
of shares of our Class C capital stock that may be issued under the
Plan by 170,000,0001 shares. The amended and restated
Plan also includes a recoupment provision and certain revisions to
clarify the treatment of awards during an authorized leave of
absence.
In April 2023, the Compensation Committee recommended, and our full
Board adopted, subject to stockholder approval, the amendment and
restatement of the Plan, which increases the share reserve by
170,000,000 shares of Class C capital stock. Our stockholders have
previously authorized us to issue under the Plan up to a total of
1,280,200,040 shares of Class C capital stock, subject to
adjustment upon certain changes in our capital structure.
The Compensation Committee and our full Board believe that in order
to successfully attract and retain the best possible candidates, we
must continue to offer a competitive equity incentive program. The
proposed share reserve increase would allow Alphabet to continue
its current granting practices.
As of December 31, 2022, of the 1,280,200,040 shares of Class C
capital stock authorized for issuance under the Plan, 706,859,701
shares of stock remained available for future grants of stock
awards, a number that the Compensation Committee and our full Board
believes to be insufficient to meet our anticipated needs.
Therefore, the Compensation Committee recommended, and our full
Board approved, subject to stockholder approval, an increase in the
maximum number of shares of Class C capital stock issuable under
the Plan by 170,000,000 shares to a total of 1,450,200,040 shares
of our Class C capital stock, subject to adjustment upon certain
changes in our capital structure.
Further, in April 2023, the Compensation Committee recommended, and
our full Board adopted, amendments to the Plan to: (1) reflect
Alphabet’s entitlement to recoup compensation, to the extent
permitted or required by applicable law, Alphabet policy and/or the
requirements of an exchange on which the Alphabet’s shares of
Capital Stock are listed for trading, including recoupment of
incentive compensation from executive officers in compliance with
the SEC’s recently adopted clawback rules; and (2) clarify that the
awards granted under the Plan will be subject to the company’s
leave policies as may be in effect from time to time.
Summary of the Plan
The material features of the Plan are summarized below. This
summary is qualified in its entirety by reference to the full text
of the Plan, which is set forth in Appendix A to this proxy
statement.
Purpose
The Plan is intended to promote the interests of Alphabet and its
subsidiaries (collectively, the company) and its stockholders by
providing the employees and consultants of the company and members
of our Board with incentives and rewards to encourage them to
continue in the service of the company and with a proprietary
interest in pursuing the long-term growth, profitability and
financial success of the company.
Administration
The Compensation Committee shall administer the Plan in accordance
with its terms. The Compensation Committee has full discretionary
authority to administer the Plan, including, without limitation,
the authority to (1) designate the employees and consultants of the
Company and members of our Board who shall be granted incentive
awards under the Plan and the amount, type and other terms and
conditions of such incentive awards, and (2) interpret and construe
any and all provisions of the Plan and the terms of any incentive
award (and any agreement evidencing the grant of an incentive
award). The Compensation Committee may exercise all discretion
granted to it under the Plan in a non-uniform manner among
participants. The Compensation Committee may delegate to a
subcommittee of one or more members of our Board or employees of
the company the authority to grant incentive awards, subject to
such limitations as the Compensation Committee shall specify and to
the requirements of applicable law.
| 1 |
On July 15, 2022, Alphabet
executed a 20-for-one stock split with a record date of July 1,
2022, effected in the form of a one-time special stock dividend on
each share of Class A common stock, Class B common stock, and Class
C capital stock. All references made to the number of shares in
this proposal and in the Plan, as well as all outstanding awards,
reflect the stock dividend in accordance with the terms of the
Plan. |
ALPHABET ● 2023 PROXY
STATEMENT 66
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Eligibility
Any employee or consultant of, or person who renders services
directly or indirectly to, the company and any member of our Board
is eligible for selection by the Compensation Committee to receive
an incentive award under the Plan (such a person who is selected to
receive an incentive award is referred to herein as a participant).
As of December 31, 2022, the company had approximately 190,234
employees and eleven members of our Board (including three employee
directors).
Shares Subject to the Plan
Currently, the maximum number of shares of Class C capital stock
that may be covered by incentive awards granted under the Plan
shall not exceed 1,280,200,040 shares in the aggregate, and the
maximum number of shares of Class C capital stock that may be
covered by incentive awards granted under the Plan that are
intended to be incentive stock options (ISOs) shall not exceed
1,280,200,040 shares in the aggregate. As of December 31, 2022, of
the 1,280,200,040 shares of Class C capital stock authorized for
issuance under the Plan, 706,859,701 shares of stock remained
available for future grants of stock awards. Assuming stockholders
approve this proposal, a total of 1,450,200,040 shares of Class C
capital stock will have been authorized and reserved for issuance
pursuant to the Plan. Assuming stockholders approve this proposal,
the maximum number of shares of Class C capital stock that may be
covered by incentive awards granted under the Plan that are
intended to be ISOs shall not exceed 1,450,200,040.
For purposes of these maximum share limitations, shares of Class C
capital stock shall only be counted as used to the extent that they
are actually issued and delivered to a participant (or such
participant’s permitted transferees as described in the Plan)
pursuant to the Plan. Accordingly, if an incentive award is settled
for cash or if shares of Class C capital stock are withheld to pay
the exercise price of a stock option or to satisfy any tax
withholding requirements in connection with an incentive award,
only the shares issued (if any), net of the shares withheld, will
be deemed delivered for purposes of determining the number of
shares of Class C capital stock that are available for delivery
under the Plan. In addition, shares of Class C capital stock
related to incentive awards that expire, are forfeited or
cancelled, or terminate for any reason without the issuance of
shares shall not be treated as issued pursuant to the Plan. In
addition, if shares of Class C capital stock owned by a participant
(or such participant’s permitted transferees as described in the
Plan) are tendered (either actually or through attestation) to the
company in payment of any obligation in connection with an
incentive award, the number of shares tendered shall be added to
the number of shares of Class C capital stock that are available
for delivery under the Plan. Notwithstanding anything to the
contrary herein, shares of Class C capital stock attributable to
incentive awards transferred under any incentive award transfer
program (as described below) shall not again be available for
delivery under the Plan. As of April 4, 2023, the market value of a
share of Class C capital stock was $105.12 (representing the
closing price on NASDAQ on such day).
Award Types
The Plan permits grants of the following types of incentive awards
subject to such terms and conditions as the Compensation Committee
shall determine, consistent with the terms of the Plan: (1) stock
options, including stock options intended to qualify as ISOs, (2)
other stock-based awards, including in the form of stock
appreciation rights, phantom stock, restricted stock, restricted
stock units, performance shares, deferred share units or
share-denominated performance units and (3) cash awards. Subject to
the terms and conditions set forth in the Plan, incentive awards
may be settled in cash or shares of Class C capital stock and may
be subject to performance-based and/or service-based
conditions.
Stock Options
The Plan permits the Compensation Committee to grant stock options,
including ISOs, which are stock options that are designated by the
Compensation Committee as incentive stock options and which meet
the applicable requirements of incentive stock options pursuant to
Section 422 of the Code, subject to certain terms and
conditions.
Exercise Price. The exercise price per share of Class C
capital stock covered by a stock option shall not be less than 100%
of the fair market value of a share of Class C capital stock on the
date on which such stock option is granted. For this purpose, fair
market value (Fair Market Value) is determined as being equal to
the closing sales price on the date of grant or, if not so reported
for such day, the immediately preceding business day, of a share of
Class C capital stock as reported on the principal securities
exchange on which shares of Class C capital stock are listed and
admitted to trading.
Terms Applicable to Stock Options. A stock option granted to
a participant under the Plan allows a participant to purchase up to
a specified total number of shares of Class C capital stock at a
specified exercise price per share during specified time periods,
each as determined by the Compensation Committee in its discretion,
provided that no stock option may have a term of longer than ten
(10) years.
Additional Terms for ISOs. Stock options granted under the
Plan that are intended to qualify as ISOs are subject to certain
additional terms and conditions as set forth in the Plan,
including: (1) each stock option that is intended to qualify as an
ISO must be designated as an ISO in the agreement evidencing its
grant, (2) ISOs may only be granted to individuals who are
employees of the Company,
ALPHABET ● 2023 PROXY
STATEMENT 67
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
(3) the aggregate Fair Market Value (determined as of the date of
grant of the ISOs) of the number of shares of Class C capital stock
with respect to which ISOs are exercisable for the first time by
any participant during any calendar year under all plans of the
Company cannot exceed $100,000, or such other maximum amount as is
then applicable under Section 422 of the Code and (4) no ISO may be
granted to a person who, at the time of the proposed grant, owns
(or is deemed to own under the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of
common stock of the Company unless (a) the exercise price of such
ISO is at least one hundred ten percent (110%) of the Fair Market
Value of a share of Class C capital stock at the time such ISO is
granted, and (b) such ISO is not exercisable after the expiration
of five years from the date it is granted. Any stock option granted
under the Plan that is designated as an ISO but for any reason
fails to meet the requirements of an ISO shall be treated under the
Plan as a nonstatutory stock option.
Repricing Prohibited. Alphabet may not reprice any stock
option granted under the Plan without the approval of the
stockholders of Alphabet. For this purpose, “reprice” means (1) any
of the following or any other action that has the same effect: (a)
lowering the exercise price of a stock option after it is granted,
(b) any other action that is treated as a repricing under U.S.
generally accepted accounting principles (GAAP), or (c) cancelling
a stock option at a time when its exercise price exceeds the fair
market value of the underlying Class C capital stock, in exchange
for another stock option, restricted stock or other equity, unless
the cancellation and exchange occurs in connection with a merger,
acquisition, spin-off or other similar corporate transaction, and
(2) any other action that is considered to be a repricing under
formal or informal guidance issued by NASDAQ.
Term
No grants of incentive awards may be made under the Plan after June
2, 2033.
Non-Employee Director Awards
Any awards granted to non-employee members of our Board under the
Plan in respect of any calendar year, solely with respect to his or
her service to our Board, may not exceed $1,500,000, based on the
aggregate value of cash-based awards and the fair market value of
any stock-based awards granted under the Plan, in each case
determined as of the date of grant. Our Board will reassess this
cap at least once every five years. As of December 31, 2022, there
were eight non-employee members of our Board.
Amendment and Termination
Our Board may at any time suspend or discontinue the Plan or revise
or amend the Plan in any respect whatsoever, provided that to the
extent that any applicable law, tax requirement or rule of a stock
exchange requires stockholder approval in order for any such
revision or amendment to be effective, such revision or amendment
shall not be effective without such approval. No amendment will be
given effect to the extent that such provision would cause any tax
to become due under Section 409A of the Code. Except as expressly
provided in the Plan, no action under the Plan may, without the
consent of a participant, reduce the participant’s rights under any
previously granted and outstanding incentive award.
Adjustments Upon Certain Changes
The Plan includes provisions that require or permit the
Compensation Committee to make certain adjustments upon the
occurrence of specified events, including provisions that provide
as follows: (1) upon the occurrence of certain events affecting the
capitalization of Alphabet such as a recapitalization or stock
split, the Compensation Committee shall make appropriate
adjustments in the type and maximum number of shares available for
issuance under the Plan and the limits described above for ISOs;
(2) in the event of an increase or decrease in the number or type
of issued shares of common or capital stock of Alphabet without
receipt or payment of consideration by the Company, the
Compensation Committee shall appropriately adjust the type or
number of shares subject to each outstanding incentive award and
the exercise price per share, if any, of shares subject to each
such incentive award; (3) in the event of a merger or similar
transaction as a result of which the holders of shares of Class C
capital stock receive consideration consisting exclusively of
securities of the surviving corporation in such transaction, the
Compensation Committee shall appropriately adjust each outstanding
incentive award so that it pertains and applies to the securities
which a holder of the number of shares of Class C capital stock
subject to such incentive award would have received in such
transaction; and (4) upon the occurrence of certain specified
extraordinary corporate transactions, such as a dissolution or
liquidation of Alphabet, sale of all or substantially all of the
company’s assets, and certain mergers involving Alphabet, and upon
any other corporate change, including, but not limited to an
extraordinary cash dividend, spin-off or the sale of a subsidiary
or business unit, the Compensation Committee has discretion to make
certain adjustments to outstanding incentive awards, cancel
outstanding incentive awards and provide for cash payments to
participants in consideration of such cancellation, or provide for
the exchange of outstanding incentive awards.
ALPHABET ● 2023 PROXY
STATEMENT 68
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Summary of Federal Income Tax Consequences of Awards
ISOs. A participant who is granted an ISO does not recognize
taxable income at the time the ISO is granted or upon its exercise,
but the excess of the aggregate fair market value of the shares
acquired on the exercise date (ISO shares) over the aggregate
exercise price paid by the participant is included in the
participant’s income for alternative minimum tax purposes. Upon a
disposition of the ISO shares more than two years after grant of
the ISOs and one year after exercise of the ISOs, any gain or loss
is treated as long-term capital gain or loss. In such case,
Alphabet would not be entitled to a deduction. If the participant
sells the ISO shares prior to the expiration of these holding
periods, the participant recognizes ordinary income at the time of
disposition equal to the excess, if any, of the lesser of (1) the
aggregate fair market value of the ISO shares at the date of
exercise; and (2) the amount received for the ISO shares, over the
aggregate exercise price previously paid by the participant. Any
gain or loss recognized on such a premature disposition of the ISO
shares in excess of the amount treated as ordinary income is
treated as long-term or short-term capital gain or loss, depending
on how long the shares were held by the participant prior to the
sale. The amount of ordinary income recognized by the participant
is subject to payroll taxes. Alphabet is entitled to a deduction at
the same time and in the same amount as the participant recognizes
ordinary income.
Nonstatutory Stock Options. A participant who is granted a
stock option that is not an ISO (a nonstatutory stock option) does
not recognize any taxable income at the time of grant. Upon
exercise, the participant recognizes taxable income equal to the
aggregate fair market value of the shares subject to nonstatutory
stock options over the aggregate exercise price of such shares. Any
taxable income recognized in connection with the exercise of
nonstatutory stock options by an employee is subject to payroll
taxes. Alphabet is entitled to a deduction at the same time and in
the same amount as the participant recognizes ordinary income. The
participant’s basis in the option shares will be increased by the
amount of ordinary income recognized. Upon the sale of the shares
issued upon exercise of nonstatutory stock options, any further
gain or loss recognized will be treated as long-term or short-term
capital gain or loss, depending on how long the shares were held by
the participant prior to the sale.
Restricted Stock and Restricted Stock Units. A participant
will not recognize income at the time a restricted stock award is
granted. When the restrictions lapse with regard to any portion of
restricted stock, the participant will recognize ordinary income in
an amount equal to the fair market value of the shares with respect
to which the restrictions lapse, unless the participant elected to
realize ordinary income in the year the award is granted in an
amount equal to the fair market value of the restricted stock
awarded, determined without regard to the restrictions. A
participant will not recognize income at the time an award of
restricted stock units (GSUs) or performance-based restricted stock
units (PSUs) is granted. When GSUs or PSUs vest, the participant
will recognize ordinary income in an amount equal to the cash paid
or to be paid or the fair market value of the shares delivered or
to be delivered. The amount of ordinary income recognized by the
participant is subject to payroll taxes. Alphabet is entitled to a
deduction at the same time and in the same amount as the
participant recognizes ordinary income.
Performance-Based Awards. A participant will not recognize
income at the time of grant of a performance-based award. The
participant will recognize ordinary income at the time the
performance-based award vests in an amount equal to the dollar
amount, or the fair market value of the shares of Class C capital
stock, subject to the award. The amount of ordinary income
recognized by the participant is subject to payroll taxes. Alphabet
is entitled to a deduction at the same time and in the same amount
as the participant recognizes ordinary income.
Section 162(m) Compensation Deduction Limitation. In
general, Section 162(m) limits Alphabet’s compensation deduction to
$1,000,000 paid in any tax year to any “covered employee” as
defined under Section 162(m), as amended. A “covered employee”
includes each individual who served as Alphabet’s Chief Executive
Officer or Chief Financial Officer at any time during the taxable
year, each of the three other most highly compensated officers of
the Company for the taxable year, and any other individual who was
a covered employee of the company for the preceding tax year
beginning after December 31, 2016.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF U.S. FEDERAL
INCOME TAXATION WITH RESPECT TO THE GRANT AND EXERCISE OF AWARDS
UNDER THE PLAN. IT DOES NOT PURPORT TO BE COMPLETE AND DOES NOT
DISCUSS THE TAX CONSEQUENCES OF AN INDIVIDUAL’S DEATH OR THE
PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR
FOREIGN COUNTRY IN WHICH ANY ELIGIBLE INDIVIDUAL MAY RESIDE.
Plan Benefits
The amount and timing of awards granted under the Plan are
determined in the sole discretion of the administrator and
therefore cannot be determined in advance. The future awards that
would be received under the Plan by executive officers and other
employees are discretionary and are therefore not determinable at
this time.
ALPHABET ● 2023 PROXY
STATEMENT 69
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Required Vote
Approval of the proposed amendment and restatement of the Plan to
increase the maximum number of shares of our Class C capital stock
that may be issued under the Plan by 170,000,000 shares requires
the affirmative FOR vote of the holders of a majority of the voting
power of Alphabet’s shares of Class A common stock and Class B
common stock present or represented by proxy at the Annual Meeting
and entitled to vote thereon, voting together as a single class.
Unless marked to the contrary, proxies received will be voted FOR
approval of the amendment and restatement of the Plan.
Alphabet Recommendation
We believe strongly that the approval of the increase in the number
shares of Class C capital stock issuable under the Plan by
170,000,000 shares is essential to our continued success. Our
employees are among our most valuable assets. Equity awards
provided under the Plan are vital to our ability to attract and
retain outstanding and highly skilled individuals. Such awards also
are crucial to our ability to motivate employees to achieve our
goals. For the reasons stated above the stockholders are being
asked to approve the Plan.
| OUR BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT AND
RESTATEMENT OF THE ALPHABET INC. AMENDED AND RESTATED 2021 STOCK
PLAN TO INCREASE THE NUMBER OF SHARES OF CLASS C CAPITAL STOCK
ISSUABLE UNDER THE PLAN BY 170,000,000 SHARES. |
ALPHABET ● 2023 PROXY
STATEMENT 70
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Proposal Number
4 Advisory Vote to Approve
Compensation Awarded to Named Executive Officers
As required by the SEC’s proxy rules, we are seeking an advisory,
non-binding stockholder vote with respect to compensation awarded
to our named executive officers.
Our executive compensation program and compensation paid to our
named executive officers are described on pages 46-58 of this proxy
statement. Our compensation programs are overseen by the
Compensation Committee and reflect our philosophy to pay all of our
employees, including our named executive officers, in ways that
support three primary business objectives:
| ● |
Attract and
retain the world’s best talent. |
| ● |
Support our
culture of innovation and performance. |
| ● |
Align employee and stockholder
interests. |
We believe in pay for performance, which is reflected in our
compensation design. The proportion of overall pay tied to
performance is higher for employees at more senior levels in the
organization, including our named executive officers, reflecting
their opportunity to have more impact on company performance.
You are being asked to approve, on an advisory basis, the
compensation awarded to Alphabet’s named executive officers as
disclosed under SEC rules, including the Compensation Discussion
and Analysis, the compensation tables, and related narrative
disclosures included in this proxy statement.
Required Vote
Approval of this proposal requires the affirmative FOR vote of the
holders of a majority of the voting power of Alphabet’s shares of
Class A common stock and Class B common stock present or
represented by proxy at the Annual Meeting and entitled to vote
thereon, voting together as a single class. Because this vote is
advisory, it will not be binding upon our Board. However, the
Compensation Committee will consider the outcome of the vote, along
with other relevant factors, in evaluating Alphabet’s executive
compensation program.
Alphabet Recommendation
| OUR BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE APPROVAL, ON AN ADVISORY BASIS, OF
THE COMPENSATION AWARDED TO ALPHABET’S NAMED EXECUTIVE OFFICERS AS
DESCRIBED IN THIS PROXY STATEMENT. |
ALPHABET ● 2023 PROXY
STATEMENT 71
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Proposal Number
5 Advisory Vote on the
Frequency of Advisory Votes to Approve Compensation Awarded to
Named Executive Officers
As required by the SEC’s proxy rules, we are seeking an advisory,
non-binding stockholder vote about how often we should present
stockholders with the opportunity to vote on compensation awarded
to our named executive officers. You may elect to have the vote
held every year, every two years, or every three years, or you may
abstain.
We recommend that this advisory vote be held once every three
years. The company and our Board believe that a triennial voting
frequency is aligned with our long-term compensation philosophy,
and provides our stockholders with an appropriate horizon over
which to evaluate the efficacy of our compensation program and
policies in achieving long-term business results. We also believe
that a three-year timeframe provides a better opportunity to
observe and evaluate the impact of any changes to our executive
compensation policies and practices that have occurred since the
last advisory vote.
Required Vote
The frequency that receives the highest number of votes will be
deemed to be the frequency selected by the stockholders. Because
this vote is advisory, it will not be binding upon our Board.
However, the Compensation Committee will consider the outcome of
the vote, along with other relevant factors, in recommending a
voting frequency to our Board.
Alphabet Recommendation
| OUR BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR A FREQUENCY OF ONCE EVERY “3 YEARS”
FOR THE STOCKHOLDER ADVISORY VOTE ON COMPENSATION AWARDED TO OUR
NAMED EXECUTIVE OFFICERS. |
ALPHABET ● 2023 PROXY
STATEMENT 72
STOCKHOLDER PROPOSALS
OUR APPROACH TO STOCKHOLDER PROPOSALS
We are committed to advancing our practices, policies, and
disclosures in ways that further the interests of the company and
our stakeholders and ultimately contribute to strong business
outcomes and stockholder value creation.
We recognize that the submission of proposals for vote at our
Annual Meeting is one mechanism for our stockholders to convey
their priorities, perspectives, and issues of concern. Our Board
and management team assess each proposal request carefully and
discuss them with internal subject matter experts who have deep
insight into our current approach to the matters raised by the
proposals. In many instances, we engage directly with the
proponents, which enables us to better understand their objectives
and give us an opportunity to elaborate on our initiatives,
policies, and practices. We prioritize those engagements where we
believe direct dialogue will be most constructive to our ongoing
efforts in these areas.
Stockholder proposals often request that we prepare a report, adopt
a policy, or implement new (or different) processes. We do
appreciate the issues raised in many of the proposals, and in many
cases we have already taken actions to address them, rendering the
implementation of a specific proposal unnecessary or not the best
use of company resources. While our actions may not be exactly as
prescribed in a proposal, they are designed to further the
long-term interests of the company, our stockholders, and other
stakeholders.
For example, we are proud of the leadership role our company has
played in advancing transparency on important issues. In 2010, we
were one of the first in our industry to issue annual Transparency
Reports, which share data on how we handle content that violates
our policies, as well as how we handle government requests for
removal content. We were also one of the first technology companies
to publish numbers about the diversity of our workforce beginning
in 2014. In 2018, we launched a quarterly YouTube Community
Guidelines Enforcement Report, which we have expanded and refined
over the years to include additional data like channel removals,
the number of comments removed, the policy reason why a video or
channel was removed, and appeals data.
We have continued to thoughtfully add to and enhance our
disclosures, often as a result of our ongoing engagement with
external experts, in alignment with the requirements of our
business as it evolves, and in ways that do not compromise
competitively sensitive information or stockholder value.
Various stockholders have submitted Proposal Numbers 6-18 for our
Annual Meeting. While a number of these proposals contain claims
that we believe are incorrect or misleading, we have not attempted
to refute all of them.
Below we describe our Board’s rationale for recommending against
each stockholder proposal submitted for our Annual Meeting.
|
Proposal |
|
Alphabet
Board Voting
Recommendation |
|
Rationale |
|
STOCKHOLDER
PROPOSALS: |
|
|
|
|
|
(6) |
Stockholder proposal regarding a lobbying report (page
76) |
|
AGAINST |
|
● We already
publish extensive lobbying disclosures, which address much of the
information requested in the proposal
● Our
lobbying transparency efforts have been recognized as best in
class
● We have
robust oversight mechanisms in place including oversight by our
Board and senior management team
|
|
(7) |
Stockholder proposal regarding a congruency report (page
78) |
|
AGAINST |
|
● We seek to
advance the best interests of the company and our stockholders in
partnering with various organizations
● Our
collaboration with organizations does not reflect an endorsement of
their entire agendas
|
ALPHABET ● 2023 PROXY
STATEMENT 73
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
|
Proposal |
|
Alphabet
Board Voting
Recommendation |
|
Rationale |
|
(8) |
Stockholder proposal regarding a climate lobbying report (page
80) |
|
AGAINST |
|
● We already
publish extensive lobbying disclosures including on climate-related
topics
● We assess
alignment of our trade association participation with the goals of
the Paris Agreement
● We engage
with our trade associations to encourage alignment between our core
public policy objectives and their policy advocacy activities,
including on climate change
|
|
(9) |
Stockholder proposal regarding a report on reproductive rights and
data privacy (page 83) |
|
AGAINST |
|
● We have
policies and procedures for evaluating and responding to requests
for user information, and routinely push back on overbroad or
otherwise inappropriate demands
● We provide
robust privacy controls and practice data minimization for users,
and are committed to improving our privacy protections when
appropriate, especially around health-related topics
|
|
(10) |
Stockholder proposal regarding a human rights assessment of data
center siting (page 86) |
|
AGAINST |
|
● Our
existing disclosures already provide transparent information on how
we oversee, evaluate and manage human rights-related risks,
including those related to data center siting
● Our human
rights governance and management structure provides effective
oversight of key human rights risks and mitigation strategies
|
|
(11) |
Stockholder proposal regarding a human rights assessment of
targeted ad policies and practices (page 89) |
|
AGAINST |
|
● Our
existing policies are designed to safeguard user privacy and work
in tandem with our human rights governance and management
structure
● Through
our Privacy Sandbox commitments, we collaborate with regulators and
others across the digital advertising ecosystem to improve privacy
and test new methodologies
● We have
already updated our Privacy Sandbox initiative to address concerns
similar to those raised in this proposal
|
|
(12) |
Stockholder proposal regarding algorithm disclosures (page
92) |
|
AGAINST |
|
● We already
disclose significant information about our advertising and search
policies and procedures and our transparency efforts are informed
by multiple frameworks
● Disclosure
of additional details on proprietary algorithmic systems could be
used to compromise our operations and the quality of our
services
|
|
(13) |
Stockholder proposal regarding a report on alignment of YouTube
policies with legislation (page 95) |
|
AGAINST |
|
● We already
provide significant information about YouTube’s policies and
procedures to further our commitment to online safety and have
intensified our regulatory readiness initiatives under appropriate
senior management and Board oversight
● We have
published a number of substantive disclosures to meet rigorous
reporting requirements, and we are transparent about our
compliance
|
|
(14) |
Stockholder proposal regarding a content governance report (page
98) |
|
AGAINST |
|
● We have
appropriate safeguards in place to ensure our policies are designed
and enforced in ways that are free from improper bias
● We devote
substantial effort to preventing misuse of our platforms and
ensuring content is appropriately provided and supported by
effective oversight and transparency on enforcement actions
|
|
(15) |
Stockholder proposal regarding a performance review of the Audit
and Compliance Committee (page 101) |
|
AGAINST |
|
● Our Board
believes that our Audit and Compliance Committee has the requisite
experience, skill set, and protocols to conduct the robust risk
oversight sought by the proponent, and that a third-party
assessment would not result in better direction or performance
|
|
(16) |
Stockholder proposal regarding bylaws amendment (page
103) |
|
AGAINST |
|
● We amended
our Bylaws in October 2022 following SEC rule changes and careful
deliberations by our Board, and the amended Bylaws largely include
the advance notice provisions requested by the proponent
|
ALPHABET ● 2023 PROXY
STATEMENT 74
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
|
Proposal |
|
Alphabet
Board Voting
Recommendation |
|
Rationale |
|
(17) |
Stockholder proposal regarding “executives to retain significant
stock” (page 105) |
|
AGAINST |
|
● Our
existing stock ownership guidelines and policies effectively align
senior management and stockholder interests, and our executive
compensation programs reinforce this alignment
|
|
(18) |
Stockholder proposal regarding equal shareholder voting (page
107) |
|
AGAINST |
|
● Our strong
governance practices and current capital structure have provided
significant long-term stability to the company and have proven
beneficial to stockholders through the delivery of exceptional
returns over the life of the company
|
Upon receiving an oral or written request, we will promptly provide
the address and the number of known voting securities held by the
proponents of the stockholder proposals. You may request this
information via mail, email, or phone, as follows:
 |
|
 |
|
 |
| |
|
|
|
|
Alphabet
Inc.
Attn: Corporate Secretary
1600 Amphitheatre Parkway
Mountain View, California 94043 |
|
Email:
corporatesecretary@abc.xyz |
|
(650)
253-3393 |
ALPHABET ● 2023 PROXY
STATEMENT 75
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Proposal Number
6 Stockholder Proposal
Regarding a Lobbying Report
United Church Funds has advised us that it intends to submit the
proposal set forth below for consideration at our Annual
Meeting.
Whereas, full disclosure of Alphabet’s lobbying activities
and expenditures to assess whether its lobbying is consistent with
Alphabet’s expressed goals and stockholders’ best interests.
Resolved, stockholders request the preparation of a report,
updated annually, disclosing:
| 1. |
Company policy
and procedures governing lobbying, both direct and indirect, and
grassroots lobbying communications. |
| 2. |
Payments by
Alphabet used for (a) direct or indirect lobbying or (b) grassroots
lobbying communications, in each case including the amount of the
payment and the recipient. |
| 3. |
Description of management’s and the
Board’s decision-making process and oversight for making payments
described in sections 2 above. |
For purposes of this proposal, a “grassroots lobbying
communication” is a communication directed to the general public
that (a) refers to specific legislation or regulation, (b) reflects
a view on the legislation or regulation and (c) encourages the
recipient of the communication to take action with respect to the
legislation or regulation. “Indirect lobbying” is lobbying engaged
in by a trade association or other organization of which Alphabet
is a member.
Both “direct and indirect lobbying” and “grassroots lobbying
communications” include efforts at the local, state and federal
levels.
The report shall be presented to the Nominating Committee and
posted on Alphabet’s website.
Supporting Statement
Alphabet spent $105,845,000 on federal lobbying from 2015 – 2021.
This does not include state lobbying. Alphabet lobbied in at least
38 states in 2021. Alphabet also lobbies abroad, “being accused of
shady lobbying”1 and spending between €6,000,000 –
6,499,999 on lobbying in Europe for 2021.
Companies can give unlimited amounts to third party groups that
spend millions on lobbying and undisclosed grassroots
activity.2 Alphabet lists support of 369 trade
associations (TAs), social welfare groups (SWGs) and nonprofits for
2022, yet fails to disclose its payments, or the amounts used for
lobbying. Alphabet belongs to the Chamber of Commerce and Business
Roundtable, which have spent over $2.1 billion on lobbying since
1998, supports SWGs that lobby like National Taxpayers
Union3 and Taxpayers Protection Alliance,4
and funds controversial nonprofits like the Federalist
Society5 and Independent Women’s Forum, which “routinely
pushes policy positions that are highly favorable to its corporate
donors.”6
Alphabet’s lack of disclosure presents reputational risks when its
lobbying contradicts company public positions or hides payments to
SWGs. Alphabet has drawn attention for funding “dark money groups”
to oppose antitrust regulation.7 Highlighting dark money
risks, utility FirstEnergy was fined $230 million for funneling $60
million through SWG Generation Now in a bribery
scandal.8 On company positions, Alphabet believes in
addressing climate change, yet the Business Roundtable lobbied
against the Inflation Reduction Act.9 And while Alphabet
does not belong to the American Legislative Exchange Council, which
is attacking so called woke capitalism,10 it is
represented by the Chamber, NetChoice and National Taxpayers Union,
which all sit on its Private Enterprise Advisory Council.
Last year, this proposal received majority support from outside
shareholders.
| (1) |
https://www.politico.eu/article/big-tech-companies-face-potential-eu-lobbying-ban/. |
| (2) |
https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/. |
| (3) |
https://time.com/6182329/the-strange-coalition-in-congress-poised-to-score-a-major-win-against-big-tech/. |
| (4) |
https://www.opensecrets.org/news/2021/06/dark-money-groups-battle-efforts-to-limit-big-tech/. |
| (5) |
https://www.cnbc.com/2021/01/15/federalist-society-under-fire-after-leader-spoke-at-pro-trump-rally-before-riot.html. |
| (6) |
https://theintercept.com/2022/10/01/roe-amazon-google-facebook-independent-womens-forum/. |
| (7) |
https://www.opensecrets.org/news/2021/06/dark-money-groups-battle-efforts-to-limit-big-tech/. |
| (8) |
https://www.npr.org/2021/07/23/1019567905/an-energy-company-behind-a-major-bribery-scandal-in-ohio-will-pay-a-230-million-. |
| (9) |
https://www.theguardian.com/environment/2022/aug/19/top-us-business-lobby-group-climate-action-business-roundtable. |
| (10) |
https://www.exposedbycmd.org/2022/07/27/abandoning-free-market-and-liberty-principles-alec-takes-on-woke-capitalism-bodily-aut
onomy-and-more-at-its-annual-meeting/. |
ALPHABET ● 2023 PROXY
STATEMENT 76
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Alphabet Opposing Statement
Our Board, which provides oversight of Google’s corporate political
policies and activities, believes that participating in the
political process in a transparent manner is an important way to
enhance stockholder value and promote good corporate citizenship.
Our engagement with policymakers and regulators is guided by a
commitment to ensure our participation is open, transparent, and
clear to our users, stockholders, and the public.
Our Board is committed to transparency in our public policy and
lobbying activities. Our transparency efforts were recognized in
the 2022 CPA-Zicklin Index of Corporate Political Disclosure and
Accountability, and Google’s U.S. Public Policy Transparency
website already contains much of the information requested by the
proposal. Our Board therefore believes that the report requested by
this proposal would not provide substantial additional information
to our stockholders and recommends a vote AGAINST this
proposal.
We Already Provide Transparency and Publish Extensive Lobbying
Disclosures
Google has long been a champion of disclosure and transparency, and
has adopted a transparency policy for our public policy activities,
including our lobbying efforts. Google’s U.S. Public Policy
Transparency website includes robust and detailed disclosures,
including:
| ● |
Our governance
and management structure, policies, and procedures regarding
oversight and compliance of our lobbying and political engagement
activities, including a policy prohibiting trade associations and
other organizations from using Google funds for political
expenditures. |
| ● |
Key issues
informing our public policy work and our positions on a range of
important issues. |
| ● |
Links to
publicly available reports on our federal lobbying activity and
NetPAC filings and details of contributions to national committees
and organizations, state and local candidates, and other political
organizations. |
| ● |
List of trade associations,
independent organizations, and other tax-exempt groups that receive
the most substantial contributions from Google’s U.S. Government
Affairs and Public Policy team. |
Additionally, in compliance with applicable laws, Google discloses
a significant amount of information in publicly available filings
at the state and local level in the U.S.
We Maintain Executive and Board Oversight of Political
Engagement
Our Board and senior management team oversees our corporate
political activity to ensure appropriate policies and practices are
in place and that it serves the interest of our stockholders. The
Governance Committee reviews Google’s corporate political policies
and activities, including expenditures made with corporate funds,
Google’s NetPAC contributions, direct corporate contributions to
state and local political campaigns, and our policy prohibiting
trade associations and other organizations from using Google funds
for political expenditures.
Google’s U.S. Government Affairs and Public Policy Team interacts
with government and elected officials to explain our products and
promote innovation and the growth of the web. The Google Vice
President who leads this team works directly with Kent Walker,
Google’s President for Global Affairs, who reports to Google’s
CEO.
Google’s Ethics and Business Integrity team ensures compliance with
all relevant political laws. The Ethics and Business Integrity team
provides training on applicable laws and has implemented approval
processes for Google’s political contributions and public reporting
of political contributions with Ethics and Business Integrity
reviews.
Our Practices Are Recognized as Best in Class
Our transparency efforts have been recognized in the 2022
CPA-Zicklin Index of Corporate Political Disclosure and
Accountability, which has noted Alphabet’s high level of disclosure
and named us a “trendsetter” — its highest category — for four
consecutive years.
Given the depth and breadth of our existing disclosures and
frequency of our updates to our stockholders and the public about
our public policy activities, our Board does not believe that
implementing this proposal would provide additional benefit to our
stockholders.
Required Vote
Approval of the stockholder proposal requires the affirmative FOR
vote of the holders of a majority of the voting power of Alphabet’s
shares of Class A common stock and Class B common stock present or
represented by proxy at the Annual Meeting and entitled to vote
thereon, voting together as a single class. Unless marked to the
contrary, proxies received will be voted AGAINST the stockholder
proposal.
Alphabet Recommendation
| OUR BOARD OF DIRECTORS
RECOMMENDS A VOTE AGAINST THE STOCKHOLDER PROPOSAL. |
ALPHABET ● 2023 PROXY
STATEMENT 77
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Proposal Number
7 Stockholder Proposal
Regarding a Congruency Report
The National Center for Public Policy Research has advised us that
it intends to submit the proposal set forth below for consideration
at our Annual Meeting.
Congruency Report of Partnerships with Globalist
Organizations
Resolved: We request that Alphabet Inc. (the “Company”)
publish a report, at reasonable expense, analyzing the congruency
of voluntary partnerships with organizations that facilitate
collaboration between businesses, governments and NGOs for social
and political ends against the Company’s fiduciary duty to
shareholders.
Supporting Statement:
Alphabet does not list the World Economic Forum (WEF), Council on
Foreign Relations (CFR), Business Roundtable (BR) or other similar
globalist organizations among its partners or as recipients of
contributions;1 however, WEF and CFR do list the Company
as a partner,2 BR lists CEO Sundar Pichai among its
members,3 and Google founders Larry Page and Sergey Brin
both graduated from WEF’s “Young Global Leaders”
program.4 Why the inconsistency? Why is the Board
concealing these partnerships, amongst other similar ones, from
shareholders?
Alphabet’s legal duty as a Delaware business corporation requires
it to first serve the interests of its shareholders.5
Because Alphabet is not a public benefit corporation,6
all additional Company actions and expenditures with third parties
must be shown by the Board to be congruent with the interests of
shareholders and the Company’s fundamental purpose.
However, the agendas of WEF, CFR, BR and other such organizations
are antithetical with the Company’s fiduciary duty. This obliges
the Board to explain how these partnerships serve the interests of
shareholders (rather than Directors).
WEF, for example, describes itself as an “international
organization for public-private cooperation,” and that it was
“founded on the stakeholder theory, which asserts that an
organization is accountable to all parts of
society.”7
Similarly, CFR describes itself as a “membership organization” for
both “government officials” and “business executives” on an
international scale,8 and BR pretended to redefine “the
purpose of a corporation” such that a corporation ought to cater to
the special interests of “stakeholders” rather than the fundamental
interests of its owners, the shareholders.9
Those agendas are incongruent with the interests of Alphabet
shareholders and the traditional – and legally binding – definition
of a corporation. The more the Board pays favor to hand-picked
“stakeholders,” the less it’s accountable to capital-providing
shareholders. In partnering and conspiring with WEF and others,
then, Alphabet shareholders are funding the efforts designed to
debase their own influence as shareholders within the Company.
But most importantly, it’s the radical agendas of these
organizations that makes partnering with them so troubling, not to
mention inconsistent with the values of most shareholders.
For example, WEF openly advocates for transhumanism,10
abolishing private property,11 eating bugs,12
social credit systems,13 “The Great Reset,”14
and host of other blatantly Orwellian objectives.
Most Alphabet shareholders are unaware (since the Board hides it
from them) that their capital is in part being used to pursue this
anti-human, anti-freedom agenda. Moreover, none of this is
congruent with the Company’s basic purpose of providing value to
shareholders by serving customers.
| (1) |
https://www.google.org/our-work/;
https://www.google.org/racial-justice/;
https://impactchallenge.withgoogle.com/bayarea2021/charities;
https://www.google.com/nonprofits/success-stories/;
https://impactchallendge.withgoogle.com/womenandgirls2021/organizations;
https://www.influencewatch.org/non-profit/google-foundation/;
https://blog.google/outreach-initiatives/google-org/giving-2-billion-to-nonprofits-since-2017/;
https://sustainability.google/for-partners/partner-stories/;
https://abc.xyz/investor#esg-updates |
| (2) |
https://www.weforum.org/partners/;
https://www.cfr.org/membership/corporate-members |
| (3) |
https://www.businessroundtable.org/about-us/members |
| (4) |
https://web.archive.org/web/20051029210229/http:/www.younggloballeaders.org/scripts/modules/Profiles/page11265.html;
https://web.archive.org/
web/20051029205517/http:/www.younggloballeaders.org/scripts/modules/Profiles/page11251.html |
| (5) |
https://law.justia.com/cases/delaware/court-of-chancery/2012/ca-7164-vcn-0.html,
et al. |
| (6) |
https://delcode.delaware.gov/title8/c001/scl5/index.html |
| (7) |
https://www.weforum.org/about/world-economic-forum/ |
| (8) |
https://www.cfr.org/about |
| (9) |
https://www.businessroundtable.org/purposeanniversary |
| (10) |
https://www.weforum.org/about/the-fourth-industrial-revolution-by-klaus-schwab |
| (11) |
https://web.archive.org/web/20200919112906/https://twitter.corn/wef/status/799632174043561984 |
| (12) |
https://www.weforum.org/agenda/2021/07/why-we-need-to-give-insects-the-role-they-deserve-in-our-food-systems/ |
| (13) |
https://www.weforum.org/reports/identity-in-a-digital-world-a-new-chapter-in-the-social-contract |
| (14) |
https://www.weforum.org/focus/the-great-reset |
ALPHABET ● 2023 PROXY
STATEMENT 78
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Alphabet Opposing Statement
Our Board believes that our company’s current approach to
partnering with third-party organizations, along with our existing
disclosures, appropriately advances the interest of the company and
serves the best interests of our stockholders. As publicly stated
on Google’s U.S. Public Policy Transparency website, our
sponsorship or collaboration with third-party organizations does
not reflect an endorsement of their entire agendas. Our Board
therefore believes that the report requested by this proposal would
not provide useful information to our stockholders and recommends a
vote AGAINST this proposal.
We Transparently Partner With Organizations to Advance the Best
Interests of the Company and Our Stockholders
As a public company, we are committed to serving the best interests
of our stockholders, which is why we engage on a range of topics
with a broad range of organizations on causes that are important to
our business.
We regularly update Google’s U.S. Public Policy Transparency
website to provide a listing of politically engaged trade
associations, independent organizations, and other tax-exempt
groups that receive the most substantial contributions from
Google’s U.S. Government Affairs and Public Policy team, including
organizations the proponent incorrectly asserts we have not
disclosed, such as Business Roundtable. The Governance Committee
helps to shape our overall corporate governance strategy and
reviews Google’s corporate political policies and activities,
including expenditures made with corporate funds, Google’s NetPAC
contributions, direct corporate contributions to state and local
political campaigns, and our policy prohibiting trade associations
and other organizations from using Google funds for political
expenditures and activities.
Further, several of our executives have publicly disclosed their
participation in discussions facilitated by organizations, like the
World Economic Forum, where we have engaged on key issues affecting
the company. For example, Kent Walker, Google’s President for
Global Affairs, tweeted regarding his participation on a panel
discussing the future of technology and digital Europe, and Kate
Brandt, Google’s Chief Sustainability Officer, tweeted regarding
her participation on panel discussions on climate.
Our Participation in Organizations Does Not Reflect an
Endorsement of Their Agendas
Our engagement with policymakers and regulators is guided by a
commitment to ensuring our participation is open, transparent, and
clear to our stockholders, users, and the public. We respect the
independence and agency of trade associations and third parties to
shape their own policy agendas, events, and advocacy positions. Our
sponsorship or collaboration with an organization does not mean
that we endorse its entire agenda, its events or advocacy
positions, or the views of its leaders or members. We prohibit
trade associations and other tax-exempt organizations such as
501(c)(4)s from using dues or payments made by us for political
expenditures. We inform trade associations and other organizations
of this policy by sending an electronic transmittal letter
outlining the parameters of our prohibition with every payment we
make. To ensure that organizations are abiding by our policy,
Google reserves the right to terminate all payments immediately if
we find that any portion of our contributions have been used for
political expenditures.
We believe it is important to be an active participant in
organizations to support issues that are important to our business
and ultimately to our stockholders, and we remain committed to
being transparent regarding that participation. As a result, our
Board does not believe that implementing this proposal would be
useful for our stockholders.
Required Vote
Approval of the stockholder proposal requires the affirmative FOR
vote of the holders of a majority of the voting power of Alphabet’s
shares of Class A common stock and Class B common stock present or
represented by proxy at the Annual Meeting and entitled to vote
thereon, voting together as a single class. Unless marked to the
contrary, proxies received will be voted AGAINST the stockholder
proposal.
Alphabet Recommendation
| OUR BOARD OF DIRECTORS
RECOMMENDS A VOTE AGAINST THE STOCKHOLDER PROPOSAL. |
ALPHABET ● 2023 PROXY
STATEMENT 79
|
1 |
Corporate
Governance |
2 |
Director and
Executive
Compensation |
3 |
Audit
Matters |
4 |
Management
and Stockholder
Proposals |
5 |
Questions and
Answers |
6 |
Appendices |
Proposal Number
8 Stockholder Proposal
Regarding a Climate Lobbying Report
Boston Trust Walden Company and Zevin Asset Management, as lead
filers, and the Benedictine Sisters of Virginia and the Benedictine
Sisters of Mount St. Scholastica, as co-filers, along with a number
of other co-filers, whose names, addresses, and stockholdings will
be provided by us upon request, have advised us that they intend to
submit the proposal set forth below for consideration at our Annual
Meeting.
Whereas: Regular examination of the alignment of lobbying
activities (direct and indirect) with corporate public commitments
and policies is an increasingly important requirement of strong
corporate governance.
Resolved: Shareholders request the Alphabet Inc. Board of
Directors within the next year conduct an evaluation and issue a
report (at reasonable cost, omitting proprietary information)
describing its framework for identifying and addressing
misalignments between Alphabet’s lobbying (directly and indirectly
through trade associations and social welfare and nonprofit
organizations) and Alphabet’s commitments to mitigate climate
impact and its support of the Paris Agreement, which seeks to limit
average global warming to no more than 1.5 degrees Celsius by 2030.
The report should include essential elements, such as the criteria
used to assess alignment; the strategies used to address any
misalignment; and circumstances under which these strategies are
implemented.
Supporting Statement: Corporate lobbying activities
inconsistent with meeting the goals of the Paris Agreement present
regulatory, reputational, and legal risks to companies. Such policy
engagement also presents systemic risks to economies and markets,
as delays in implementation of the Paris Agreement increase the
physical risks of climate change, undermine economic stability, and
introduce uncertainty and volatility into our investment
portfolios. We believe Paris-aligned climate lobbying helps
mitigate these risks and contributes positively to the long-term
value of companies.
Alphabet publicly supports the goals of the Paris Agreement,
advocates for specific science-based climate policies, leads
investment in carbon-free energy, and maintains a policy for Google
advertisers, publishers and YouTube creators “that will prohibit
ads for, and monetization of, content that contradicts
well-established scientific consensus around the existence and
causes of climate change.”1 Alphabet also discloses an
extensive list of its memberships in trade associations and
policy-focused non-profits.
Alphabet does not, however, disclose whether its lobbying practices
(directly and indirectly) align with the Paris Agreement’s aims or
Alphabet’s own carbon-free energy target, nor company actions to
address instances of misalignment.
Of particular concern are industry and policy groups that represent
business but too often present obstacles to global emissions
reductions, and regulation or legislation addressing climate risk.
A review of Alphabet’s disclosed memberships2 reveals
inconsistencies with Alphabet’s actions on, and commitments to, the
Paris Agreement and the prevailing science.345 For
example, Alphabet discloses it is a member of the US Chamber of
Commerce, which has spent nearly $1.8 billion on federal lobbying
since 1998.6 The Chamber lobbied strongly against the
Inflation Reduction Act, the most ambitious climate policy in U.S.
history.7
An alignment assessment can help to identify and address risks
presented by misalignment and protect the credibility of Alphabet’s
leadership efforts on climate.