Larry Page and Sergey Brin just got a
$2.3 billion retirement gift from investors. The Google co-founders, who
announced Tuesday they were stepping down from day-to-day management of parent
Alphabet Inc., added more than $1 billion each to their net worth today as the
firm’s shares rose 1.9% in New York.
They each own
about 6% of the internet giant and still control Alphabet through special
voting shares.
Like Apple
Inc.’s Tim Cook and Microsoft Corp.’s Satya Nadella, Pichai is a long-time
lieutenant who steadily worked his way up the corporate ladder. More than 15
years after he joined the Mountain View-based company he’s replacing Page in
the top job. Brin is stepping down as president, leaving Pichai as undisputed
leader.
The shift reflects Google’s accession
into corporate middle age. Started in a California garage by Brin and Page in
1998, the firm had revenue of $137 billion in 2018 and today boasts a market
value of $893 billion. That’s behind only Apple and Microsoft on the S&P
500 Index.
Founder Free
Other Silicon
Valley giants are also founder free. Larry Ellison’s Oracle Corp. is headed by
Safra Catz, though Ellison is still involved as the company’s chairman. Some
younger companies -- such as Uber Technologies Inc. and We Co. -- have turned
to outsiders amid turmoil.
There are some
notable exceptions. Jeff Bezos and Mark Zuckerberg are still at the helm of
Amazon.com Inc. and Facebook Inc. respectively, which are the fourth- and
fifth-largest U.S. companies by market value.
Such a transition has proved to be a
boon for Apple and Microsoft. The iPhone maker’s shares have risen by more than
400% since Cook took the helm in August 2011 and Microsoft has quadrupled on
Nadella’s watch.
Since 2015,
Pichai has served as CEO of Google, by far the company’s biggest division.
During his time in that job, Alphabet’s shares doubled in price even as the
company wrestled with increased scrutiny from regulators and lawmakers.
Unusual Position
Their success
has placed the trio among America’s richest executives. Each are worth hundreds
of millions of dollars thanks to stock awards they’ve received.
Pichai, 47, is
in an unusual position for a top executive. Unlike Cook and Nadella, who stand
fourth and sixth on Bloomberg’s executive pay ranking, almost all of Pichai’s
stock awards have vested, filings show.
By contrast, Cook, 59, still has as many
as 1.8 million restricted stock units worth about $500 million set to vest
through August 2021, according to a recent filing. Nadella, 52, could earn as
many as 1.8 million Microsoft shares through a long-term performance-based
stock award that is currently worth about $275 million.
The Alphabet
board will likely move to rectify this discrepancy. But however they decide to
compensate Pichai, he’ll still lag far behind the wealth accrued by Brin and
Page. The pair have a combined net worth of about $126 billion, according to
the Bloomberg Billionaires Index.
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