DEF 14A 1 lgoog2022_def14a.htm ALPHABET INC. - DEF 14A ALPHABET INC. DEF 14A

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. )

 

 Filed by the Registrant  Filed by a party other than the Registrant
   
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive Additional Materials
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)

 

Payment of Filing Fee (Check all boxes that apply):
No fee required
Fee paid previously with preliminary materials
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
 
 

 
 

 

1600 Amphitheatre Parkway
Mountain View, California 94043
(650) 253-0000
DEAR STOCKHOLDERS

 

We are pleased to invite you to participate in our 2022 Annual Meeting of Stockholders (Annual Meeting) to be held on Wednesday, June 1, 2022, 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 5, 2022 (Record Date), can participate in and vote at our Annual Meeting by visiting www.virtualshareholdermeeting.com/GOOGL22 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 2021 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 over the Internet 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 over the Internet increases the ability of our stockholders to connect with the information they need, while reducing the environmental impact of our Annual Meeting. If you want more information, please see the Questions and Answers section of this proxy statement or visit the 2022 Annual Meeting section of our Investor Relations website at https://abc.xyz/investor/other/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 over the Internet, 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, as well as in the Notice you received in the mail.

 

Thank you for your ongoing support of, and continued interest in, Alphabet.

 

Sincerely,

 

SUNDAR PICHAI JOHN L. HENNESSY
CHIEF EXECUTIVE CHAIR OF THE
OFFICER BOARD OF DIRECTORS
   

APRIL 22 , 2022

 
 
LETTER FROM THE CHAIR
OF THE BOARD OF DIRECTORS

 

Dear Fellow Stockholders,

 

Over the past two years, I’ve written to you all as Chair of the Alphabet Board against the backdrop of a global pandemic and a world that often seems like it’s changing faster than usual. During this period, our Board has worked closely with Sundar and management to execute on the company’s mission to organize the world’s information and make it universally accessible and useful. This mission has never been more important.

 

Throughout Alphabet, I’m proud of how our teams have shown resilience and weathered the volatility of recent years, supporting each other while providing services that have helped people around the world. Our Board has spent a lot of time focused on our workforce, including supporting our employees through the pandemic, transitioning to new flexible working arrangements, and making sure that inclusion is central to all we do as a company. To support our ongoing oversight in these areas, the Board’s Leadership Development, Inclusion and Compensation Committee has expanded its purview to oversee issues of human capital management, diversity and inclusion, workplace environment and safety, and corporate culture.

 

Sustainability is another area on which our Board has engaged deeply. There is incredible momentum behind the company’s bold commitments and work focused on climate and energy, particularly Google’s carbon-free moonshot. Our efforts will have an impact far beyond the four walls of our company — particularly as we become the computing platform of choice for organizations and companies that are seeking ways to move towards a carbon-neutral future.

 

As someone who has worked in the fields of computer science and academia for more than 50 years, I’m continually impressed by the scientific and technical advances that Alphabet continues to make and never more so than this year. Alphabet remains among the leading investors in R&D in the world, and that investment supports the company’s position as a leader in areas such as search, video, cloud computing and more. In fields like artificial intelligence (AI), quantum computing, self-driving cars, and biotechnology, Alphabet is making breakthroughs that advance science, provide benefits to society, and contribute to the sustained long-term growth of our business.

 

As we help guide and oversee the company’s progress in these areas, our Board is truly privileged to draw on seasoned leaders and visionary technologists, including Google’s founders, who together bring broad knowledge, deep experience and specialized expertise. In addition to our regularly scheduled Board meetings and quarterly sessions with management, our directors frequently engage with management to provide additional insight and guidance on matters of strategic importance to our company. Leaders at the company are receptive and responsive to the Board’s engagement and value the perspectives and engagement our directors bring.

 

As we continue to review and provide oversight of all these important matters, our Board and our company benefit tremendously from the input and feedback from employees, stockholders, and our broader stakeholders. We appreciate and value this dialogue and the insight it provides.

 

Finally, on behalf of the Board, I would like to thank Alan Mulally, who is not seeking re-election to our Board at this Annual Meeting, for his dedicated service and the insights and contributions he has brought since joining in 2014. Along with my fellow directors, I’m incredibly optimistic about Alphabet’s future and am grateful for the trust you have placed in us. We will continue to build a company that makes us all proud.

 

Very truly yours,

 

 
JOHN L. HENNESSY
CHAIR OF THE BOARD OF
DIRECTORS
 
 

 

WEDNESDAY, JUNE 1, 2022

 

9:00 a.m., Pacific Time

 

VIRTUAL MEETING

 

Alphabet stockholders of Class A or Class B common stock (or their proxy holders) as of the close of business on April 5, 2022 can participate in and vote at the Annual Meeting by visiting www.virtualshareholdermeeting.com/GOOGL22 and entering the 16-digit control number included in your 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.

 

ITEMS OF BUSINESS

 

1. To elect ten members of our Board of Directors (our Board) to hold office until the next annual meeting of stockholders or until their respective successors have been elected and qualified.
2. To ratify the appointment of Ernst & Young LLP as Alphabet’s independent registered public accounting firm for the fiscal year ending December 31, 2022.
3. To approve an amendment to Alphabet’s 2021 Stock Plan to increase the share reserve by 4,000,000 shares of Class C capital stock.
4. To approve an amendment to Alphabet’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares.
5. To consider and vote upon the stockholder proposals set forth in the proxy statement, if properly presented.
6. To consider such other business as may properly come before the meeting.

 

By order of the Board of Directors,

 

Sundar Pichai
Chief Executive Officer
John L. Hennessy
Chair of the
Board of Directors

NOTICE
of 2022 Annual Meeting
of Stockholders

 

ADJOURNMENTS AND POSTPONEMENTS

 

Any action on the items of business described in this Notice may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed.

 

RECORD DATE

 

You are entitled to vote only if you were a stockholder of Alphabet Class A or Class B common stock as of the close of business on April 5, 2022.

 

MEETING DETAILS

 

See Annual Meeting of Stockholders on page 16 of this proxy statement for details.

 

VOTING

 

Your vote is very important. Whether or not you plan to participate in the Annual Meeting, we encourage you to read this proxy statement and submit your proxy or voting instructions as soon as possible. For specific instructions on how to vote your shares, please refer to the instructions on the Notice you received in the mail, the section titled “Questions and Answers About the Proxy Materials and the Annual Meeting” beginning on page 106 of this proxy statement or, if you requested to receive printed proxy materials, your enclosed proxy card.

 

April 22 , 2022


 

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.
Vote in Advance of the Meeting      
INTERNET
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.
    BY TELEPHONE
Call toll-free number
1-800-690-6903.
    BY MAIL
Sign, date, and return your proxy card in the enclosed envelope
Vote Online During the Meeting      
INTERNET
See page 107 for details on voting your shares during the Annual Meeting through www.virtualshareholdermeeting.com/GOOGL22.
               

 

ALPHABET    2022 PROXY STATEMENT     5

 
 

This Notice of 2022 Annual Meeting of Stockholders, proxy statement, and form of proxy card are being distributed and made available on or about April 22 , 2022.

 

This proxy statement includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our environmental and social goals, commitments, and strategies. 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 reports on Form 10-K and Form 10-Q and subsequent filings. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

 

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    2022 PROXY STATEMENT     6

 
 
IMPORTANT NOTICE REGARDING
INTERNET AVAILABILITY OF PROXY
MATERIALS

 

This proxy statement and our 2021 Annual Report to Stockholders, which includes our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, will be available at https://abc.xyz/investor/other/annual-meeting/.

 

ALPHABET    2022 PROXY STATEMENT     7

 
 
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)) and “Executive Compensation—Leadership Development, Inclusion and Compensation Committee Report” 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    2022 PROXY STATEMENT     8

 
 

2022 PROXY STATEMENT SUMMARY

 

THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION CONTAINED ELSEWHERE IN THIS PROXY STATEMENT. THIS SUMMARY DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER, AND YOU SHOULD READ THE ENTIRE PROXY STATEMENT CAREFULLY BEFORE VOTING.

 

2021 BUSINESS HIGHLIGHTS

 

Over the past year, we remained focused on delivering helpful services for users and partners, as well as on driving innovation for long-term growth. We achieved significant successes in our knowledge and information products, including Search, Maps, and YouTube, advances in AI across our software and hardware, growth in our Cloud Platform, and other important developments in privacy and cybersecurity and sustainability, among many other achievements. We also continued to build our partner ecosystem, which helps accelerate our growth, and to invest in Other Bets, which strengthen our long-term growth prospects and opportunities to serve a wider range of customers.

 

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, 2016 to December 31, 2021. 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 CAPITAL 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 COMMON STOCK

Among Alphabet Inc., the S&P 500 Index,
the NASDAQ Composite Index and the RDG Internet Composite Index

 

 

*$100 invested on 12/31/16 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.

Copyright© 2022 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.

 

ALPHABET    2022 PROXY STATEMENT     9

 
 
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.

 

 

Our Director Nominees

 

ALPHABET    2022 PROXY STATEMENT     10

 
 

The following table provides summary information about each director nominee(1) as of April 5, 2022.

 

        Director
Since
      Membership on
Standing Committees
  Other Public
Boards(3)
Name   Age     Independent   ACC   LDICC(2)   NCGC   EC    

Larry Page

Co-Founder

  49   1998                     0

Sergey Brin

Co-Founder

  48   1998                     0

Sundar Pichai

Chief Executive Officer, Alphabet and Google

  49   2017                     0

John L. Hennessy (Chair)

Former President of Stanford University

  69   2004                   0

Frances H. Arnold

Linus Pauling Professor of Chemical Engineering, Bioengineering and Biochemistry at California Institute of Technology

  65   2019                   1

L. John Doerr

General Partner and Chairman of Kleiner Perkins

  70   1999                   3

Roger W. Ferguson Jr.

Former President and Chief Executive Officer of TIAA

  70   2016                   3

Ann Mather

Former Executive Vice President and Chief Financial Officer of Pixar

  61   2005                        4(4)

K. Ram Shriram

Managing Partner of Sherpalo Ventures

  65   1998                   0

Robin L. Washington

Former Executive Vice President and Chief Financial Officer of Gilead Sciences

  59   2019                   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) Alan R. Mulally, who is currently serving on our Board and as a member of our Audit and Compliance Committee, is not a nominee for election at the Annual Meeting and his term as a director will end at the Annual Meeting.
(2) In January 2022, our Board amended the charter of the Leadership Development and Compensation Committee, now the Leadership Development, Inclusion and Compensation Committee, giving it increased oversight on matters relating to Alphabet’s human capital management, including with respect to diversity and inclusion, workplace environment and safety, and corporate culture.
(3) In July 2021, our Board amended the Corporate Governance Guidelines to reduce the maximum number of public company board memberships our directors can serve on from five to four, including membership on the Alphabet Board, effective July 15, 2022.
(4) This includes Ann’s directorship at Arista Networks, Inc. In March 2022, Arista announced that Ann will not stand for re-election as a director at the end of her current term and intends to resign from its board of directors, effective as of the date of Arista’s 2022 annual meeting of stockholders.

 

ALPHABET    2022 PROXY STATEMENT     11

 
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   
 
Board and Committee Practices   
 
Stockholder Alignment   

Independent Chair of the Board, separate from CEO role

100% independent key committees (ACC, LDICC, NCGC)

Review of each committee chair at least every three years

Diverse Board in terms of gender, race, experience, skills, and tenure

Commitment to consider underrepresented people of color and different genders as potential director nominees

 

Annual Board and committee evaluations

Executive sessions of independent directors for all quarterly Board and committee meetings led by the Independent Chair

Director overboarding policy

Director orientation and continuing education programs

 

Annual election for all directors

Majority voting standard for election of directors

Removal of directors with or without cause

Minimum stock ownership guidelines

Channels for stockholder feedback, including via engagements with management to discuss corporate governance and other ESG matters

 

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 28.

 

ALPHABET    2022 PROXY STATEMENT     12

 

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 have 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.

 

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. 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. Our environmental sustainability efforts are focused on three pillars: accelerating the transition to carbon-free energy and a circular economy, empowering everyone with technology, and benefiting the people and places where we operate. Highlights of our key achievements and ambitions include:

 

We have been carbon neutral since 2007, and 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 fully 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 for more information.

 

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 but we 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.

 

We devote significant resources to assessing and identifying opportunities for continued improvement, and our Board plays an important role in elevating our focus. Our Leadership Development, Inclusion and Compensation Committee is charged with overseeing matters relating to our human capital management, including with respect to diversity and inclusion, workplace environment and safety, and corporate culture.

 

In 2020, we implemented a series of industry-leading principles and improvements that incorporated input from both employees and stockholders, including the creation of a new DEI Advisory Council, which comprises internal senior executives and external DEI experts. We have also heightened our focus on promoting racial equity, including announcing in 2020 a series of racial equity commitments. We shared an update on our progress in 2021 and continue working to translate those efforts into lasting, meaningful change.

 

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 Diversity and Racial Equity Commitments 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. In service of this priority, our Audit and Compliance Committee has specific oversight of data privacy and security matters.

 

ALPHABET    2022 PROXY STATEMENT     13

 

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 removal, 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.

 

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 oversees the implementation of our civil rights and human rights work and provides relevant updates to our Audit and Compliance Committee. We maintain a human rights due diligence process, which includes human rights impact assessments and regular engagement and consultation with internal and external stakeholders on topics such as content policies and data governance. These engagements help us to identify, prioritize, and address existing and potential civil and human rights impacts as well as opportunities to improve our policies, practices, and services.

 

Our Human Rights website provides details on our commitments and outlines our approach to human rights.

 

Reporting and Transparency Update

 

In addition to the extensive reporting and transparency we provide on the topics discussed above, we are continually focused on evolving our Environmental, Social, and Governance (ESG) reporting to align with best practices and stockholder and stakeholder expectations. To that end, we expect to share in the upcoming months our first index of ESG disclosures mapped to the Sustainable Accounting Standards Board (SASB) and to the Task Force on Climate-Related Financial Disclosures (TCFD) framework. This builds on our longstanding practice of publicly reporting information across a broad range of ESG topics.

 

ALPHABET    2022 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.

 

 

Stockholder-Aligned
Program Design               
 
Best Practices in Executive
Compensation                            
 
Pay for Performance   

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

 

No change in control benefits

Prohibition of pledging and hedging ownership of Alphabet stock

No executive-only benefit plans or retirement programs

No excessive perquisites beyond those considered a business necessity

 

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

ESG bonus for Google’s senior executive team

 

For more detailed information on Alphabet’s executive compensation philosophy and practices, see “Compensation Discussion and Analysis” beginning on page 45.

 

ALPHABET    2022 PROXY STATEMENT     15

 
ANNUAL MEETING OF STOCKHOLDERS

 

     
Time and Date:   Virtual Meeting Access:   Record Date:
9:00 a.m., Pacific Time, on
Wednesday, June 1, 2022
  Alphabet stockholders (or their proxy holders)
can participate in and vote at our Annual
Meeting by visiting
www.virtualshareholdermeeting.com/
GOOGL22
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.
  April 5, 2022

 

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: Our Annual Meeting will be accessible through the Internet only. 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 the in-person portion of our past meetings while further enhancing the online experience available to all stockholders regardless of their location.

 

You are entitled to participate in the Annual Meeting only 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/GOOGL22, 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 1, 2022. 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.

 

     
Vote in Advance of the Meeting   
 
Vote Online During the Meeting   
     

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.

  See page 107
for details on voting your shares during the Annual Meeting through www.virtualshareholdermeeting. com/GOOGL22
       
Call toll-free number 1-800-690-6903.    
       
Sign, date, and return the enclosed proxy card or voting instruction form.      
         

 

ALPHABET    2022 PROXY STATEMENT     16

 
VOTING MATTERS AND VOTE RECOMMENDATIONS

 

Proposal   Alphabet
Board Voting
Recommendation
  Rationale
MANAGEMENT PROPOSALS:        
(1) Election of ten directors (page 60)   FOR each nominee  

Slate of highly qualified Director nominees with broad and diverse backgrounds, experiences, and skill sets aligned to Alphabet’s unique 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, 2022 (page 61)   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 must be pre-approved by our Audit and Compliance Committee

(3) Approval of an amendment to Alphabet’s 2021 Stock Plan to increase the share reserve by 4,000,000 shares of Class C capital stock (page 62)   FOR  

Equity awards provided under Alphabet’s 2021 Stock Plan are vital to our ability to attract and retain outstanding and highly skilled employees

(4) Approval of an amendment to Alphabet’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares (page 66)   FOR  

As disclosed on February 1, 2022, our Board approved and declared a 20-for-one stock split (Stock Split) in the form of a one-time special stock dividend on each share of Class A and Class B common stock and Class C capital stock

In connection with the Stock Split and for general corporate purposes, our Board is recommending that Alphabet’s Amended and Restated Certificate of Incorporation (Charter) be amended to increase the number of authorized shares of Class A and Class B common stock and Class C capital stock

STOCKHOLDER PROPOSALS:        
(5) Stockholder proposal regarding a lobbying report (page 70 )   AGAINST  

Our Board is committed to transparency and the company already makes extensive disclosures on our lobbying efforts

Our Board also maintains oversight of Google’s corporate political activities to ensure they are serving the interest of stockholders

(6) Stockholder proposal regarding a climate lobbying report (page 72 )   AGAINST  

Our comprehensive lobbying disclosures, with oversight from our Board, provide the necessary information to understand the scope of the company’s lobbying activities, including as it relates to our positions on climate change and the Paris Agreement

(7) Stockholder proposal regarding a report on physical risks of climate change (page 74 )   AGAINST  

We conduct a robust climate risk assessment and already publish information on this assessment, as well as on our climate strategies and performance, through our annual CDP and Environmental Reports

(8) Stockholder proposal regarding a report on water management risks (page 76 )   AGAINST  

We have already reported on our water management strategies and performance in Google’s Water Stewardship paper

Our commitment to water stewardship is reflected in our water-related goals and initiatives across our global locations

(9) Stockholder proposal regarding a racial equity audit (page 78 )   AGAINST  

With the Board’s oversight, we already continuously review our approach to racial equity and seek engagement with independent experts and stakeholders to find areas where we can improve, including by ensuring (1) that our commitment to racial equity is reflected in our goals and actions; and (2) that we are building our products so that they work for everyone

(10) Stockholder proposal regarding a report on concealment clauses (page 81 )   AGAINST  

Google’s employment, severance, and settlement agreements do not prohibit the disclosure of facts underlying claims of harassment or discrimination

We review our employment practices and policies on an ongoing basis and strive to make them best in class

 

ALPHABET    2022 PROXY STATEMENT     17

 
Proposal   Alphabet
Board Voting
Recommendation
  Rationale
(11) Stockholder proposal regarding equal shareholder voting (page 83 )   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

(12) Stockholder proposal regarding a report on government takedown requests (page 85 )   AGAINST  

We annually publish our Google Transparency Report to provide stockholders with details on how the policies and actions of governments and corporations affect privacy, security, and access to information

(13) Stockholder proposal regarding a human rights assessment of data center siting (page 87)   AGAINST  

Our existing disclosures provide transparent information on how we evaluate and manage human-related risks, including related to data center siting

(14) Stockholder proposal regarding a report on data collection, privacy, and security (page 89)   AGAINST  

We provide extensive public disclosure on our approach to data privacy and security risk management that we believe already exceeds the requests of the proposal

(15) Stockholder proposal regarding algorithm disclosures (page 91)   AGAINST  

We disclose significant information about our advertising and search policies and procedures and their application, and additional details on proprietary algorithmic systems could be used to compromise our operations and the quality of our services

(16) Stockholder proposal regarding misinformation and disinformation (page 93)   AGAINST  

We maintain robust policies and transparent reporting on how we combat the potential spread of misinformation and disinformation

We take a systematic approach to ensuring respect for human rights across our business, supported by significant transparency around our efforts

(17) Stockholder proposal regarding a report on external costs of disinformation (page 96)   AGAINST  

We undertake substantial efforts to prevent misuse of our platforms and provide meaningful disclosures on our policies and activities to address risks

Our management team has direct responsibility for combatting disinformation, and regularly meets with our Audit and Compliance Committee to discuss our efforts to ensure platform quality

(18) Stockholder proposal regarding a report on board diversity (page 98)   AGAINST  

Our Board considers diversity in its director nomination and evaluation process and these practices have fostered a diverse board composition

We already provide information regarding the company’s board diversity practices in our proxy statement and Diversity Annual Report

(19) Stockholder proposal regarding the establishment of an environmental sustainability board committee (page 100)   AGAINST  

Our Board has oversight of the company’s key environmental sustainability matters and this oversight structure best serves our company to view environmental sustainability risks in the context of all of Alphabet’s major risk exposures and initiatives

(20) Stockholder proposal regarding a policy on non-management employee representative director (page 102)   AGAINST  

We have established a director nomination process that effectively serves our Board and our stockholders by focusing on the critical qualities needed for effective oversight

Our Leadership Development, Inclusion and Compensation Committee is charged with overseeing human capital and corporate culture matters, and we have created multiple channels to provide employees with opportunities to share feedback with management and the Board

(21) Stockholder proposal regarding a report on policies regarding military and militarized policing agencies (page 104)   AGAINST  

We already maintain and disclose policies and principles on the use of our technology, including in the context of our work with governments, to ensure our work with customers and partners aligns with the company’s values

 

ALPHABET    2022 PROXY STATEMENT     18

 

Table of Contents

 

PROXY SUMMARY 9
CORPORATE
GOVERNANCE
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE 21
DIRECTORS AND EXECUTIVE OFFICERS 21
CORPORATE GOVERNANCE AND BOARD MATTERS 28
Board Meetings 28
Board Leadership Structure 28
Board Committees 28
Director Independence 33
Compensation Committee Interlocks and Insider Participation 33
Consideration of Director Nominees 33
Director Service on Outside Boards and Other Commitments 34
Management Succession Planning 34
Board’s Role in Risk Oversight 35
Executive Sessions 35
Outside Advisors 35
Board Effectiveness, Board Annual Self-Assessment, Board Education 36
Engagement 36
Communications with our Board 37
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 38
DELINQUENT SECTION 16(A) REPORTS 39
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 40
RELATED PARTY TRANSACTIONS POLICY AND PROCEDURE 40
RELATED PARTY TRANSACTIONS 41
DIRECTOR AND
EXECUTIVE
COMPENSATION
DIRECTOR COMPENSATION 43
BOARD COMPENSATION ARRANGEMENTS FOR NON-EMPLOYEE DIRECTORS 43
DIRECTOR COMPENSATION FOR 2021 44
EXECUTIVE COMPENSATION 45
COMPENSATION DISCUSSION AND ANALYSIS 45
Overview 45
Section 1–Executive Summary 45
Section 2–Determining Competitive Levels of Pay 46
Section 3–Elements of Pay and Fiscal Year 2021 Pay Decisions 46
Section 4–Other Compensation Information 48
LEADERSHIP DEVELOPMENT, INCLUSION AND COMPENSATION COMMITTEE REPORT 50
SUMMARY COMPENSATION TABLE 51
GRANTS OF PLAN-BASED AWARDS IN 2021 52
DESCRIPTION OF PLAN-BASED AWARDS 52
OUTSTANDING EQUITY AWARDS AT 2021 FISCAL YEAR-END 53
OPTIONS EXERCISED AND STOCK VESTED IN FISCAL 2021 54
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL 54
ALPHABET CEO PAY RATIO 55
EQUITY COMPENSATION PLAN INFORMATION 56

 

ALPHABET    2022 PROXY STATEMENT     19

 
AUDIT MATTERS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 57
PRINCIPAL ACCOUNTANT FEES AND SERVICES 57
AUDITOR INDEPENDENCE 57
PRE-APPROVAL POLICIES AND PROCEDURES 58
REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE OF THE BOARD OF DIRECTORS 59
MANAGEMENT
AND
STOCKHOLDER
PROPOSALS
MANAGEMENT PROPOSALS TO BE VOTED ON 60
PROPOSAL NUMBER 1 – ELECTION OF DIRECTORS 60
PROPOSAL NUMBER 2 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 61
PROPOSAL NUMBER 3 – APPROVAL OF AN AMENDMENT TO ALPHABET’S 2021 STOCK PLAN 62
PROPOSAL NUMBER 4 – APPROVAL OF AN AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES 66
STOCKHOLDER PROPOSALS 67
PROPOSAL NUMBER 5 – STOCKHOLDER PROPOSAL REGARDING A LOBBYING REPORT 70
PROPOSAL NUMBER 6 – STOCKHOLDER PROPOSAL REGARDING A CLIMATE LOBBYING REPORT 72
PROPOSAL NUMBER 7 – STOCKHOLDER PROPOSAL REGARDING A REPORT ON PHYSICAL RISKS OF CLIMATE CHANGE 74
PROPOSAL NUMBER 8 – STOCKHOLDER PROPOSAL REGARDING A REPORT ON WATER MANAGEMENT RISKS 76
PROPOSAL NUMBER 9 – STOCKHOLDER PROPOSAL REGARDING A RACIAL EQUITY AUDIT 78
PROPOSAL NUMBER 10 – STOCKHOLDER PROPOSAL REGARDING A REPORT ON CONCEALMENT CLAUSES 81
PROPOSAL NUMBER 11 – STOCKHOLDER PROPOSAL REGARDING EQUAL SHAREHOLDER VOTING 83
PROPOSAL NUMBER 12 – STOCKHOLDER PROPOSAL REGARDING A REPORT ON GOVERNMENT TAKEDOWN REQUESTS 85
PROPOSAL NUMBER 13 – STOCKHOLDER PROPOSAL REGARDING A HUMAN RIGHTS ASSESSMENT OF DATA CENTER SITING 87
PROPOSAL NUMBER 14 – STOCKHOLDER PROPOSAL REGARDING A REPORT ON DATA COLLECTION, PRIVACY, AND SECURITY 89
PROPOSAL NUMBER 15 – STOCKHOLDER PROPOSAL REGARDING ALGORITHM DISCLOSURES 91
PROPOSAL NUMBER 16 – STOCKHOLDER PROPOSAL REGARDING MISINFORMATION AND DISINFORMATION 93
PROPOSAL NUMBER 17 – STOCKHOLDER PROPOSAL REGARDING A REPORT ON EXTERNAL COSTS OF DISINFORMATION 96
PROPOSAL NUMBER 18 – STOCKHOLDER PROPOSAL REGARDING A REPORT ON BOARD DIVERSITY 98
PROPOSAL NUMBER 19 – STOCKHOLDER PROPOSAL REGARDING THE ESTABLISHMENT OF AN ENVIRONMENTAL SUSTAINABILITY BOARD COMMITTEE 100
PROPOSAL NUMBER 20 – STOCKHOLDER PROPOSAL REGARDING A POLICY ON NON-MANAGEMENT EMPLOYEE REPRESENTATIVE DIRECTOR 102
PROPOSAL NUMBER 21 – STOCKHOLDER PROPOSAL REGARDING A REPORT ON POLICIES REGARDING MILITARY AND MILITARIZED POLICING AGENCIES 104
QUESTIONS AND
ANSWERS ABOUT
THE PROXY
MATERIALS AND
THE ANNUAL
MEETING
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING 106
PROXY MATERIALS 106
VOTING INFORMATION 107
PARTICIPATING IN THE ANNUAL MEETING 110
STOCKHOLDER PROPOSALS, DIRECTOR NOMINATIONS, AND RELATED BYLAW PROVISIONS 111
APPENDICES APPENDIX A
ALPHABET INC. AMENDED AND RESTATED 2021 STOCK PLAN
A-1
APPENDIX B
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF ALPHABET INC. A DELAWARE CORPORATION
B-1
INFORMATION CONCERNING ALPHABET’S ANNUAL MEETING OF STOCKHOLDERS B-11

 

ALPHABET    2022 PROXY STATEMENT     20

 

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 three new directors in the past five 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 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 5, 2022 are set forth starting on page 22.

 

  Page Brin Pichai Hennessy Arnold Doerr Ferguson Mather Mulally(1) Shriram Washington
Gender Identity                      
Male      
Female                
Race/Ethnicity                      
African American or Black                  
Asian                  
White        

 

(1) Alan, who is currently serving on our Board, is not a nominee for election at the Annual Meeting.

 

ALPHABET    2022 PROXY STATEMENT     21

 
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 Memberships:

   Board of Trustees, X Prize Foundation

   The Carl Victor Page Memorial Foundation

Larry Page, 49, 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 Memberships:

   Sergey Brin Family Foundation

Sergey Brin, 48, 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 Memberships:

   The Pichai Family Foundation

Sundar Pichai, 49, 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    2022 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

 

JOHN L. HENNESSY

Chair of the Board

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

Former Public Company Directorships in the Past Five Years:

Cisco Systems, Inc

John L. Hennessy, 69, 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

Director since 2019  |  Nominating and Corporate Governance Committee

Other Public Company Directorships:

   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, 65, 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.

 

L. JOHN DOERR

Director since 1999  |  Leadership Development, Inclusion and Compensation Committee

Other Public Company Directorships:

   Amyris, Inc.

   Coursera, Inc.

   DoorDash, Inc.

Selected Memberships:

   Board of Trustees, The Aspen Institute

   Board of Trustees, Climate Imperative

Former Public Company Directorships in the Past Five Years:

   Bloom Energy Corporation

   Quantumscape Corporation

   Zynga, Inc.

L. John Doerr, 70, 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.

 

ALPHABET    2022 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

 

ROGER W. FERGUSON JR.

Director since 2016  |  Audit and Compliance Committee

Other Public Company Directorships:

   Blend Labs, Inc.

   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: Institute for Advanced Study; The Conference Board; The Memorial Sloan Kettering Cancer Center; The National September 11th Museum and Memorial

Former Public Company Directorships in the Past Five Years:

   General Mills, Inc.

Roger W. Ferguson Jr., 70, is currently The Steven A. Tananbaum distinguished fellow at the Council on Foreign Relations and is employed by Red Cell Partners. 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.

 

ANN MATHER

Director since 2005  |  Audit and Compliance Committee (Chair)

Other Public Company Directorships:

   Arista Networks, Inc.(1)

   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.

   Glu Mobile, Inc.

   Planet Labs Inc.

   Shutterfly, Inc.

Ann Mather, 61, 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.

 

(1) On March 29, 2022, Arista Networks, Inc. announced that Ann will not stand for re-election as a director at the end of her current term and intends to resign from its board of directors, effective as of the date of Arista’s 2022 annual meeting of stockholders.

 

ALPHABET    2022 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

 

ALAN R. MULALLY(1)

Director since 2014  |  Audit and Compliance Committee

Selected Memberships:

   Board of Trustees, Mayo Clinic

   U.S. National Academy of Engineering, Member

   England’s Royal Academy of Engineering, Fellow

Alan R. Mulally, 76, served as President and Chief Executive Officer of Ford Motor Company, a global automotive company, from September 2006 through June 2014. Alan was previously a director of Ford and served on its finance committee from September 2006 through June 2014. From March 2001 to September 2006, Alan served as Executive Vice President of the Boeing Company and President and Chief Executive Officer of Boeing Commercial Airplanes, Inc. He also was a member of the Boeing Executive Council. Prior to that time, he served as President of Boeing’s space and defense business. Alan served as co-chair of the Washington Competitiveness Council and sat on the advisory boards of NASA, the University of Washington, the University of Kansas, the Massachusetts Institute of Technology, and the U.S. Air Force Scientific Advisory Board. Alan holds a Bachelor of Science and Master of Science degrees in aeronautical and astronautical engineering from the University of Kansas, and a Master of Science degree in management from the Massachusetts Institute of Technology as a 1982 Alfred P. Sloan fellow.

Select Leadership Skills and Additional Experiences:

Global business leadership and extensive financial and management expertise as former President and Chief Executive Officer of Ford Motor Company, Executive Vice President of the Boeing Company, and President and Chief Executive Officer of Boeing Commercial Airplanes, Inc.
Valuable experience in addressing issues ranging from corporate strategy, operational excellence, governance, and sales and marketing.

 

(1) Alan is not a nominee for election at the Annual Meeting and his term as a director will end at the Annual Meeting.

 

K. RAM SHRIRAM

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, 65, 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

Director since 2019  |  Leadership Development, Inclusion and Compensation Committee (Chair)

Other Public Company Directorships:

   Honeywell International, Inc.

   salesforce.com, 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, 59, 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    2022 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

 

Executive Officers

 

This section describes the business experience of our executive officers, other than Sundar, whose biography can be found on page 22. 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

Chief Financial Officer, Alphabet and Google

Public Company Directorships:

   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

   Board of Directors, Verily Life Sciences

Ruth M. Porat, 64, has served as Senior Vice President and Chief Financial Officer of Alphabet, since May 2015. Prior to joining Google, Ruth was Executive Vice President and Chief Financial Officer of Morgan Stanley from January 2010 to April 2015. Previously she was Vice Chairman of Investment Banking from September 2003 to December 2009, and Global, Co-Head of Technology Investment Banking, and Global Head of the Financial Institutions Group at Morgan Stanley from September 2006 through December 2009. 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, 61, 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    2022 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

 

PHILIPP SCHINDLER

Senior Vice President, Chief Business Officer, Google

Selected Memberships:

   Scholar, the Studienstiftung des deutschen Volkes, the German Academic Scholarship Foundation

Philipp Schindler, 51, 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, and Chief Legal Officer, Alphabet and Google; Corporate Secretary, Alphabet

Selected Memberships:

   Board of Overseers, Harvard University

Kent Walker, 61, has served as President, Global Affairs, and Chief Legal Officer of Alphabet and Google since November 2021, and Corporate 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 matters, philanthropy, and responsible innovation. 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 serving as the first chair of the Global Internet Forum to Counter Terrorism and currently chairs Google’s Advanced Technology Review Council. Also, held various executive positions at various technology companies.
Previously served as an Assistant U.S. Attorney in San Francisco and Washington D.C.
In-depth knowledge of the technology sector.

 

ALPHABET    2022 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

 

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 2021, our Board held four meetings and acted by unanimous written/electronic consent one time. Each director attended at least 75% of all Board and applicable committee meetings. We encourage our directors to attend our annual meetings of stockholders. Seven directors attended Alphabet’s 2021 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 33 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 Nominating Committee), and
   
4. an Executive Committee.

 

In January 2022, our Board amended the charter of the Leadership Development and Compensation Committee, now the Leadership Development, Inclusion and Compensation Committee, giving it increased oversight on matters relating to Alphabet’s human capital management, including with respect to diversity and inclusion, workplace environment and safety, and corporate culture.

 

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    2022 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

 

The membership and meetings during 2021 and the primary functions of each of the standing committees are described below.

 

Board of Directors Audit
Committee
Compensation
Committee
Nominating
Committee
Executive
Committee
Larry Page      
Sergey Brin      
Sundar Pichai      
John L. Hennessy*      
Frances H. Arnold*      
L. John Doerr*      
Roger W. Ferguson Jr.*      
Ann Mather*      
Alan R. Mulally*      
K. Ram Shriram*      
Robin L. Washington(1)*      

 

Member
Committee Chair
 * Independent Director
(1) Robin was appointed Chair of the Compensation Committee effective January 19, 2021.

 

ALPHABET    2022 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

 

 

    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 2021, the Audit Committee held eight meetings and acted by unanimous written/electronic consent two times.

 

The Audit Committee currently comprises Ann (Chair), Roger, and Alan, 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    2022 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

 

 

    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 Nominating 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 2021, the Compensation Committee held six meetings and acted by unanimous written/electronic consent eleven 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    2022 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

 

    Nominating and Corporate Governance Committee

 

The Nominating 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 Nominating 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 the Board.

 

Reviewing and recommending to our Board director independence determinations.

 

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 2021, the Nominating Committee held four meetings.

 

The Nominating 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 Nominating Committee is independent as defined in the Listing Rules of NASDAQ.

 

    Executive Committee

 

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 2021, the Executive Committee did not hold any meetings. The Executive Committee currently comprises Larry (Chair), Sergey, and Sundar.

 

ALPHABET    2022 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

 

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 and each of the director nominees standing for election, except Larry, Sergey, and Sundar, is an independent director 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 40-42 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 2021, 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 Nominating Committee, a standing committee of our Board, considers properly submitted recommendations for candidates to our Board from stockholders. In evaluating such recommendations, the Nominating Committee 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 Nominating 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 Nominating Committee may reasonably request. There are no differences in the manner in which the Nominating 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:

 

1.     Via email only:    

2.     Via mail with a copy via email:

       
  

corporatesecretary@abc.xyz

OR    

Alphabet Inc.
Attn: Corporate Secretary
1600 Amphitheatre Parkway
Mountain View, California
94043

AND    

corporatesecretary@abc.xyz

 

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 111 of this proxy statement.

 

Director Selection Process and Qualifications

 

The Nominating 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 Nominating Committee screens candidates and evaluates the qualifications of the persons nominated by or recommended by our stockholders. The Nominating Committee recommends director nominees who are ultimately approved by the full Board.

 

ALPHABET    2022 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

 

Identification of Nominees

 

The Nominating Committee uses a variety of methods for identifying and evaluating nominees for directors. The Nominating 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 Nominating 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 Nominating Committee or may also include discussions with persons familiar with the candidate, an interview of the candidate, or other actions the Nominating Committee deems appropriate, including the use of third parties to review candidates. The Nominating 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 Nominating Committee will factor into its determination the following qualities, among others: integrity, professional reputation and strength of character, educational background, knowledge of our business, 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 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, cultural background, and professional experiences in evaluating board candidates. Accordingly, when evaluating candidates for nomination as new directors, the Nominating 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 Nominating 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 Nominating 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 22-25 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 Nominating 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 board memberships our directors can serve on cannot be more than five (5), including membership on the Alphabet Board. Effective July 15, 2022, the maximum shall be reduced to four (4) public company memberships, including membership on the Alphabet Board.

 

Management Succession Planning

 

One of our Board’s principal duties is to review management succession planning. Our 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 Nominating 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.

 

ALPHABET    2022 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

 

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.

 

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 executive 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    2022 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 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. As part of this annual self-assessment, directors are able to provide feedback on the performance of other directors. The Chair of the Nominating 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 environmental, social and governance (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.

 

Investor Relations in coordination with the Corporate Secretary team is responsible for leading our stockholder outreach. Throughout the year, we engage with institutional stockholders who hold a significant portion of our outstanding stock and include members of our senior executive team, management, and other experts across Alphabet, such as our Chief Privacy Officer and our Chief Diversity Officer, as appropriate.

 

ALPHABET    2022 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

 

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    2022 PROXY STATEMENT     37

 
 

COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth information, as of April 5, 2022, 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 45 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 300,758,936 shares of Class A common stock and 44,404,426 shares of Class B common stock outstanding at April 5, 2022. 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 5, 2022 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      19,494,224  43.9  26.2
Sergey Brin(2)      18,566,632  41.8  24.9
Sundar Pichai  11,378  *      *
Ruth M. Porat(3)  1,403  *      *
Prabhakar Raghavan         
Philipp Schindler         
Kent Walker         
Frances H. Arnold         
L. John Doerr(4)  145,594  *  1,117,447  2.5  1.5
Roger W. Ferguson Jr.         
John L. Hennessy(5)  2,107  *      *
Ann Mather  836  *      *
Alan R. Mulally         
K. Ram Shriram(6)  134,037  *      *
Robin L. Washington         
All executive officers and directors as a group (15 persons)  295,355  *  39,180,303  88.2  52.6

 

ALPHABET    2022 PROXY STATEMENT     38

 
1 Corporate
Governance
2 Director and
Executive
Compensation
3 Audit
Matters
4 Management
and Stockholder
Proposals
5 Questions and
Answers
6 Appendices

 

   Voting Shares Beneficially Owned   
   Class A Common Stock  Class B Common Stock  Total Voting
Name of Beneficial Owner  Shares  %  Shares  %  Power(1) %
Other > 5% Security Holders               
BlackRock, Inc.(7)  20,471,730  6.8      2.7
Eric E. Schmidt(8)  396,335  *  3,100,408  7.0  4.2
The Vanguard Group(9)  22,972,466  7.6      3.1
(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) 8,635 shares of Class B common stock held by SMB Pacific 2021 Charitable Remainder Unitrust I, of which Sergey is the sole trustee; and (ii) 8,635 shares of Class B common stock held by SMB Pacific 2021 Charitable Remainder Unitrust II, of which Sergey is the sole trustee.
(3) Consists of 1,403 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. The address for the Passfield Hall Foundation Inc. is 1251 Avenue of the Americas, 9th Floor, New York, New York 10020-1104.
(4) Includes 11,728 shares of Class A common stock held by The Austin 1999 Trust; 11,728 shares of Class A common stock held by The Hampton 1999 Trust; 118,653 shares of Class A common stock held by The Benificus Foundation; and 1,117,447 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 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 751 Laurel Street, #717, San Carlos, California 94070.
(5) Consists of 2,107 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 58,041 shares of Class A common stock held by Ram’s spouse and 16,884 shares of Class A common stock held by Janket Ventures Limited Partnership. Ram has voting and investment authority over the shares held by Janket Ventures Limited Partnership. The address for Janket Ventures L.P. is 2200 Geng Road, Suite 100, Palo Alto, California 94303.
(7) Based on the most recently available Schedule 13G/A filed with the SEC on February 8, 2022 by BlackRock, Inc. BlackRock, Inc., a parent holding company through certain of its subsidiaries, beneficially owned 19,224,377 shares of Class A common stock. 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 15, 2022 by Eric E. Schmidt, The Schmidt Family Living Trust, The Schmidt Family Foundation, and The Eric and Wendy Schmidt Fund for Strategic Innovation. Includes 168,011 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; 212,506 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; 317,600 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 2,386,199 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, 2022 by The Vanguard Group. The Vanguard Group, an investment adviser, beneficially owned through certain of its subsidiaries 22,972,466 shares of Class A common stock, with shared voting power over 505,126 shares, sole dispositive power over 21,730,813 shares, and shared dispositive power over 1,241,653 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 holders of 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 regarding their ownership and changes in ownership of our securities. We believe that, during 2021, our directors, executive officers, and ten percent stockholders complied with all Section 16(a) filing requirements. We did however report the following transactions after the filing deadline: (i) Sergey Brin’s conversion of 62,200 shares of Class B common stock into Class A common stock on May 14, 2021 was reported on Form 5 filed on February 11, 2022; (ii) John L. Hennessy’s transfers of 211 shares and 208 shares of Class C capital stock to John L. Hennessy and Andrea J. Hennessy Revocable Trust on February 11, 2000 and August 4, 2000, respectively, were reported on Form 4 filed on January 11, 2022; and (iii) Roger W. Ferguson Jr.’s transfers of 177 shares of Class C capital stock on February 7, 2019, 320 shares on August 12, 2019, 100 shares on each of November 15, 2019, January 23, 2000, and March 9, 2000 to Roger W. Ferguson Jr. 2016 Revocable Trust were reported on Form 5 filed on February 11, 2022.

 

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    2022 PROXY STATEMENT     39

 
 

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    2022 PROXY STATEMENT     40

 
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. In 2021, we charged the Founder Entities approximately $1,148,106. These flights have not interfered with our business plans for use of the Airfield. These fees are regularly reviewed by the Audit Committee. 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 2021 through March 31, 2022, we charged LTA approximately $10,876,786. 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. In 2021, we paid approximately $1,006,401 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 $82.85 million in certain private companies from the beginning of 2021 through March 31, 2022, in which Kleiner Perkins was a co-investor or existing investor (excluding Viz.ai, Inc. investment described below). 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 out of three buildings. From the beginning of 2021 through March 31, 2022, we charged Kitty Hawk Corporation a total of approximately $2,064,714 in rent and operating expenses to occupy the two buildings. The third building is leased to Wisk Aero LLC, an entity affiliated with Larry. From the beginning of 2021 through March 31, 2022, we charged Wisk Aero LLC a total of approximately $1,004,918. Larry does not have a material interest in the transactions described above.

 

ALPHABET    2022 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

 

Equity Investment in Technology Impact Growth Fund II

 

In November 2021, Alphabet committed to invest up to $100 million in Technology Impact Growth Fund II, L.P. (TIGF II) in exchange for a limited partnership interest therein. Larry has separately invested $100 million in TIGF II through his investment entity and his family’s charitable foundation, and holds more than 10% equity interest in TIGF II as a limited partner. Larry does not have a material interest in the transaction 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 the follow-on 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 directors, executive officers, or significant stockholders.

 

ALPHABET    2022 PROXY STATEMENT     42

 
 

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 Nominating 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 stockholders. By vesting over time, equity also creates an incentive for continued service on our Board. The Nominating Committee and the Compensation Committee jointly review the compensation programs for non-employee directors on an annual basis.

 

In 2021, we awarded our standard ongoing compensation to each of our non-employee directors, including an annual $75,000 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 $150,000 annual GSU grant for his role as our 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 7, 2021, the first Wednesday of the month following the month of our 2021 Annual Meeting of Stockholders. GSUs entitle the holder to receive one share of Class C capital stock for each share underlying the GSU as the 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 2021, 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 under Alphabet’s 2012 Stock Plan for future grants, such that, similar to GSUs granted to all other Alphabet employees, GSUs granted to directors will immediately vest in full upon termination of service on the Board by reason of death.

 

We reimburse our non-employee directors for reasonable out-of-pocket expenses in connection with attendance at Board and committee meetings.

 

Under Alphabet’s 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 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 directors either met the applicable minimum stock ownership guideline as of December 31, 2021 or were within the grace period noted above to come into compliance with these requirements.

 

During 2021, 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 2021.

 

ALPHABET    2022 PROXY STATEMENT     43

 
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 2021

 

The following table summarizes compensation earned by our directors other than Sundar during 2021.

 

Name  Fees Earned or
Paid in Cash
($)
  Stock
Awards
($)(1)
  All Other
Compensation
($)
  Total
($)
Frances H. Arnold(2)  75,000  364,217    439,217
Sergey Brin(3)      1  1
L. John Doerr(4)  75,000  364,217    439,217
Roger W. Ferguson Jr.(4)  75,000  364,217    439,217
John L. Hennessy(5)  100,000  520,310    620,310
Ann Mather(4)  100,000  364,217    464,217
Alan R. Mulally(4)  75,000  364,217    439,217
Larry Page(3)      1  1
K. Ram Shriram(4)  75,000  364,217    439,217
Robin L. Washington(6)  75,000  364,217    439,217
(1) The amounts in the Stock Awards column reflect the aggregate grant date fair value of GSUs granted to directors in 2021 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 7, 2021 (GSU grant following the 2021 Annual Meeting of Stockholders) was $2,601.55 per share.
(2) On December 31, 2021, there were 576 Class C GSUs outstanding.
(3) 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.
(4) On December 31, 2021, there were 435 Class C GSUs outstanding.
(5) On December 31, 2021, there were 609 Class C GSUs outstanding.
(6) On December 31, 2021, there were 593 Class C GSUs outstanding.

 

ALPHABET    2022 PROXY STATEMENT     44

 

EXECUTIVE COMPENSATION

 

TABLE OF CONTENTS

 

THE CD&A IS ORGANIZED INTO FOUR SECTIONS:  
SECTION 1—EXECUTIVE SUMMARY 45
SECTION 2—DETERMINING COMPETITIVE LEVELS OF PAY 46
SECTION 3—ELEMENTS OF PAY AND FISCAL YEAR 2021 PAY DECISIONS 46
SECTION 4—OTHER COMPENSATION INFORMATION 48

 

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, 2021:

 

 

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. Additionally, we offer significant flexibility for our employees, including a hybrid work week, numerous geographic locations for in-office work, and opportunities for remote work.

 

We believe in pay for performance. Compensation is tied to performance for all employees who receive more than nominal compensation. 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    2022 PROXY STATEMENT     45

 
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 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.

 

We review our peer group and our evaluation criteria each year. For 2021, we determined our peer group by evaluating potential companies against the following criteria:

 

High-technology or media company
Key talent competitor
High-growth, with a minimum of 50% of Alphabet’s revenue 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 2020, the Compensation Committee selected the following peer companies for 2021:

 

Amazon.com, Inc. Intel Corporation Netflix, Inc.
Apple Inc. International Business Machines Corporation Oracle Corporation
Cisco Systems, Inc. Meta Platforms, Inc. (previously Facebook, Inc.) salesforce.com, 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 then reviews these recommendations, considers any relevant guidance from their independent compensation consultants, and makes the final decision on compensation for named executive officers.

 

Compensation Consultants

 

The Compensation Committee directly engaged both Compensia Inc. and Semler Brossy Consulting Group LLC as independent consultants in 2021. 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 there are no conflicts of interest.

 

Say-on-Pay and Say-When-on-Pay

 

We hold our advisory vote on executive compensation (commonly known as a “say-on-pay” vote) every three years, and hold our advisory vote on the frequency of say-on-pay votes (commonly known as “say-when-on-pay” vote) every six years. We will hold both advisory say-on-pay and say-when-on-pay votes at the 2023 annual meeting of stockholders. The Compensation Committee annually reevaluates our compensation practices to determine how they might be improved.

 

Section 3—Elements of Pay and Fiscal Year 2021 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.

 

For 2021, the base salaries for Sundar and all other named executive officers were maintained at $2.0 million and $650,000, respectively.

 

ALPHABET    2022 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

 

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 annually evaluates the structure of our 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.

 

In April 2021, the Compensation Committee granted a combination of GSUs and performance stock units (PSUs) to our named executive officers Ruth, Prabhakar, Philipp, and Kent. The GSU and PSU awards serve to transition our named executive officers onto an annual equity award structure, and are subject to the terms and conditions of Alphabet’s 2021 Stock Plan. The Compensation Committee determined individual grant values and the proportion of GSUs and PSUs following a review of the following items:

 

Market compensation values and practices for performance-based equity awards, including peers and S&P 100 companies.
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 recipient, including the value of outstanding and unvested equity awards.

 

The GSU awards vest quarterly in four equal installments beginning March 25, 2022. The PSU awards will vest, if at all, on December 31, 2023, based on the total shareholder return (TSR) performance of Alphabet relative to the companies comprising the S&P 100 over a 2021-2023 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 target. Upon vesting, each PSU and GSU will entitle the grantee 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

 

In determining the value of their equity awards, the Compensation Committee considered Alphabet’s overall business performance, each officer’s individual performance in leading their respective organizations, overall role scope, and market benchmarks against our peer competitors. The following table summarizes the equity award decisions made by the Compensation Committee with respect to each of our named executive officers (based on target award value). See the “Grants of Plan-Based Awards in 2021” table on page 52 for further details.

 

Named Executive   Number of GSUs
Granted(1)
  Target GSU
Award Value ($)
  Number of PSUs
Granted(1)
  Target PSU
Award Value ($)
  Aggregate
Target Award
Value ($)
Sundar Pichai          
Ruth M. Porat   2,428   5,000,000   2,428   5,000,000   10,000,000
Prabhakar Raghavan   4,855   10,000,000   4,855   10,000,000   20,000,000
Philipp Schindler   4,855   10,000,000   4,855   10,000,000   20,000,000
Kent Walker   2,428   5,000,000   2,428   5,000,000   10,000,000

(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 March 2021 ($2,059.84), rounded up to the nearest whole share.

 

ALPHABET    2022 PROXY STATEMENT     47

 
1 Corporate
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2 Director and
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3 Audit
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4 Management
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5 Questions and
Answers
6 Appendices

 

2022 Compensation Decisions

 

Increase to Base Salaries

 

Effective January 2022, the Compensation Committee increased the annual salaries of Ruth, Prabhakar, Philipp, and Kent from $650,000 to $1,000,000. The increases are intended to align with talent market movement since we last adjusted senior executive base salaries (excluding the Alphabet Chief Executive Officer) in January 2011.

 

Environmental, Social, and Governance Bonus

 

In January 2022, we adopted an Environmental, Social, and Governance Bonus (ESG Bonus) for members of Google’s senior executive team, including our named executive officers Ruth, Prabhakar, Philipp, and Kent. The ESG Bonus provides individual participants with a maximum $2.0M annual cash bonus opportunity, based on contributions to Google’s performance against social and environmental goals for 2022. Actual bonus payouts will be reduced if target performance is not met.

 

2022 GSU and PSU Awards

 

In January 2022, the Compensation Committee granted GSUs and PSUs to our named executive officers Ruth, Prabhakar, Philipp, and Kent. The Compensation Committee determined individual grant values and the proportion of GSUs and PSUs following a review of the following items:

 

Market compensation values and practices for performance-based equity awards, including peers and S&P 100 companies.
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 recipient, including the value of outstanding and unvested equity awards.

 

The GSUs vest quarterly over a three-year period beginning March 25, 2022. 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 2022-2024 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.

 

Sundar 2022 PSU Award Vest

 

The performance period for the first tranche (Tranche A) of the PSUs awarded to Sundar on December 19, 2019 ended on December 31, 2021. Sundar’s Tranche A award provides that if Alphabet’s relative TSR performance is at or above the 75th percentile of the companies in the S&P 100 for a two-year performance period ending December 31, 2021, the maximum number of PSUs vest in full. Alphabet’s TSR for the two-year performance period was 123.62%, which ranked Alphabet at the 96th percentile relative to companies in the S&P 100. On January 12, 2022, Sundar earned the maximum number of PSUs (69,004 shares) upon the certification by the Compensation Committee based on the satisfaction of performance criteria underlying the award.

 

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 2022, the Compensation Committee reviewed a comprehensive evaluation conducted by Alphabet management of all our 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.

 

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6 Appendices

 

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 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 compensation of our named executive officers is tied to long-term performance, their interests are closely aligned with stockholders 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.

 

Our current minimum stock ownership requirements are 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 $30.0 million; and (ii) senior vice presidents of Alphabet or Google shall each own shares of Alphabet stock equal in value to at least $6.0 million.

 

The Chief Executive Officer of Alphabet and Google, and senior vice presidents of Alphabet or Google have 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, 2021.

 

Insider Trading, Hedging, and Pledging Policies

 

Our policy against insider trading prohibits all employees and 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 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 2021, we provided a company match equal to the greater of 100% of contributions up to $3,000, or 50% of $19,500, the maximum contribution under the Internal Revenue Code for employees younger than 50, for a maximum match of $9,750 per employee (other than Larry and Sergey). Our company match is fully vested at the

 

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5 Questions and
Answers
6 Appendices

 

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 2021, we paid for personal security for Sundar, and incremental costs related to the personal use of non-commercial aircraft for Sundar, Ruth and Philipp. 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, 2021 and in this proxy statement.

 

LEADERSHIP DEVELOPMENT, INCLUSION AND COMPENSATION COMMITTEE

 

Robin L. Washington, Chair
L. John Doerr
K. Ram Shriram

 

ALPHABET    2022 PROXY STATEMENT     50

 
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5 Questions and
Answers
6 Appendices

 

SUMMARY COMPENSATION TABLE

 

The following table sets forth information regarding the compensation paid to, or earned by, our named executive officers for the fiscal years ended December 31, 2021, 2020, and 2019.

 

Name and
Principal Position
Year   Salary
($)
(1)  Stock
Awards
($)
(2)  All Other
Compensation
($)
(3)  Total
($)
Sundar Pichai 2021   2,000,000     4,322,599 (4)  6,322,599
Chief Executive Officer, Alphabet and Google, and Director 2020   2,000,000     5,410,162   7,410,162
  2019   650,000   276,612,072   3,359,480   280,621,552
Ruth M. Porat 2021   650,000   13,995,065   17,411   14,662,476
Senior Vice President, Chief Financial Officer, Alphabet and Google 2020   650,000   50,217,913   17,770   50,885,683
  2019   650,000     14,052   664,052
Prabhakar Raghavan 2021   650,000   27,984,366   13,643   28,648,009
Senior Vice President, Knowledge and Information, Google 2020   650,000   54,585,860   9,750   55,245,610
Philipp Schindler 2021   650,000   27,984,366   27,617 (5)  28,661,983
Senior Vice President, Chief Business Officer, Google 2020   650,000   65,501,684   226,816   66,378,500
Kent Walker 2021   650,000   13,995,065   12,697   14,657,762
President, Global Affairs and Chief Legal Officer, Alphabet and Google 2020   650,000   50,217,913   9,750   50,877,663
(1) Beginning this year, salaries reflect each named executive officer’s stated annual salary for the relevant fiscal year (historically, salaries reflected the actual amount paid during the year, which fluctuate each year based on the number of working days in that year). The historical salaries have been updated to reflect this change. 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) Generally consists of our 401(k) plan company match of up to $9,750 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.
(4) Includes $4,309,583 for personal security.
(5) Includes $15,434 for personal use of aircraft chartered by the company.

 

ALPHABET    2022 PROXY STATEMENT     51

 
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5 Questions and
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6 Appendices

 

GRANTS OF PLAN-BASED AWARDS IN 2021

 

The following table provides information regarding the equity awards granted in 2021 to our named executive officers.

 

            Estimated Future Payouts Under
Equity Incentive Plan Awards
  Equity Grants
Name   Grant Date   Date of
Approval of
Equity Awards
by Committee
  Threshold
(#)
  Target
(#)
(1) Maximum
(#)
  All Other
Stock Awards:
Number of
Shares of Stock
or Units
(#)
(1) Grant Date Fair
Value of Stock
Awards
($)
(2)
Sundar Pichai                
Ruth M. Porat   4/7/2021   4/6/2021         2,428   5,462,223  
Ruth M. Porat   4/7/2021   4/6/2021   1,214   2,428   4,856     8,532,842  
Prabhakar Raghavan   4/7/2021   4/6/2021         4,855   10,922,196  
Prabhakar Raghavan   4/7/2021   4/6/2021   2,428   4,855   9,710     17,062,169  
Philipp Schindler   4/7/2021   4/6/2021         4,855   10,922,196  
Philipp Schindler   4/7/2021   4/6/2021   2,428   4,855   9,710     17,062,169  
Kent Walker   4/7/2021   4/6/2021         2,428   5,462,223  
Kent Walker   4/7/2021   4/6/2021   1,214   2,428   4,856     8,532,842  
(1) 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 March 2021 ($2,059.84), rounded up to the nearest whole share number.
(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.

 

DESCRIPTION OF PLAN-BASED AWARDS

 

The GSUs and PSUs granted to named executive officers in fiscal year 2021 were granted under Alphabet’s Amended and Restated 2012 Stock Plan in accordance with its terms and the applicable award agreements. See footnotes to the “Outstanding Equity Awards at 2021 Fiscal Year-End” table below for a description of the vesting schedule of the GSUs and PSUs reported in the “Grants of Plan-Based Awards in 2021” table above.

 

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OUTSTANDING EQUITY AWARDS AT 2021 FISCAL YEAR-END

 

The following table provides information on the current holdings of unexercised stock options and unvested GSUs and PSUs by our named executive officers as of December 31, 2021.

 

        Option Awards   Stock Awards  
Name   Grant Date   Number of
Securities
Underlying
Unexercised
Options
That Are
Exercisable
(#)
(1)  Option
Exercise
Price
($)
(2) Option
Expiration
Date
   Number of
Shares or
Units of Stock
That Have Not
Vested
(#)
   Market Value of
Shares or Units
of Stock That
Have Not
Vested
($)
(3) Number of
Unearned
Shares or Units
of Stock That
Have Not
Vested
(#)
(4) Market Value
of Unearned
Shares or Units
of Stock That
Have Not
Vested
($)
(3)
Sundar Pichai   12/19/2019 (5)                     30,669     88,743,512              
  12/19/2019 (6)            103,506   299,503,927  
  4/4/2012   8,646   318.21   4/4/2022          
  4/4/2012   8,646   316.94   4/4/2022          
Ruth M. Porat   4/7/2021 (7)        2,428   7,025,637      
  4/7/2021 (8)            2,428   7,025,637  
  5/6/2020 (9)        18,637   53,927,837      
Prabhakar Raghavan   4/7/2021 (7)        4,855   14,048,379      
  4/7/2021 (10)            4,855   14,048,379  
  5/6/2020 (9)        20,258   58,618,346      
Philipp Schindler   4/7/2021 (7)        4,855   14,048,379      
  4/7/2021 (10)            4,855   14,048,379  
  5/6/2020 (9)        24,309   70,340,279      
Kent Walker   4/7/2021 (7)        2,428   7,025,637      
  4/7/2021 (8)            2,428   7,025,637  
  5/6/2020 (9)        18,637   53,927,837      
(1) All outstanding options are fully vested and exercisable.
(2) The option exercise prices have been adjusted to reflect the April 2, 2014 stock split.
(3) 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 31, 2021, which was $2,893.59 per share.
(4) The number of PSUs included in the table assumes achievement of market-based goals at the target level, except for Sundar’s Tranche A PSUs, which are shown at the maximum level based on actual performance for the performance period that ended December 31, 2021.
(5) This award vests as follows: 1/12th of GSUs vested on March 25, 2020 and an additional 1/12th will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.
(6) 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, 2021 performance period (Tranche A), the Compensation Committee determined on January 12, 2022 that based on the Company’s performance, Sundar earned the maximum number of PSUs (69,004 shares). With respect to the January 1, 2020 to December 31, 2022 performance period (Tranche B), the target is 34,502 shares, but between 0 and 69,004 shares may be earned in accordance with the market-based performance goals.
(7) This award vests as follows: 1/4th of GSUs shall on March 25, 2022 and an additional 1/4th will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.
(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 2,428 shares, but between 0 and 4,856 shares may be earned in accordance with the market-based performance goals.
(9) This award vests as follows: 1/8th of GSUs vested on June 25, 2020 and an additional 1/8th 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 Leadership Development, Inclusion and 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 4,855 shares, but between 0 and 9,710 shares may be earned in accordance with the market-based performance goals.

 

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OPTIONS EXERCISED AND STOCK VESTED IN FISCAL 2021

 

The following table provides information for the named executive officers regarding stock option exercises during the year ended December 31, 2021, 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         30,668   79,631,072  
Ruth M. Porat         19,820   51,464,261  
Prabhakar Raghavan         19,646   51,012,166  
Philipp Schindler         30,418   78,982,229  
Kent Walker         19,820   51,464,261  
(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.

 

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 executive’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 under the Amended and Restated 2012 Stock Plan for future grants, such that, similar to GSUs granted to all other Alphabet employees, GSUs granted to 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.

 

In respect to PSUs awarded to 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 table on page 55 of this proxy statement shows our estimates of the value each of our named executive officers would have received if their unvested GSUs and PSUs had become fully vested as a result of termination of employment by reason of a change in control, death, or by Alphabet without cause (as defined in the PSU Agreement) occurring on December 31, 2021. All stock options held by our named executive officers as of December 31, 2021 are fully vested.

 

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Name   Estimated Benefit of
Equity Acceleration Upon
Change in Control ($)
(1) Estimated Benefit of
Equity Acceleration
Upon Death ($)
(1)(2) Estimated Benefit of
Equity Acceleration
Upon Termination
without Cause ($)
(3)
Sundar Pichai   288,412,796   288,412,796   266,225,712  
Ruth M. Porat   67,979,110   67,979,110    
Prabhakar Raghavan   86,715,105   86,715,105    
Philipp Schindler   98,437,038   98,437,038    
Kent Walker   67,979,110   67,979,110    
(1) The estimated benefit amount of equity acceleration was calculated by multiplying the number of unvested GSUs, and in Sundar’s case, the target number of PSUs, by the closing price of Class C capital stock on December 31, 2021, which was $2,893.59 per share.
(2) The amendment of Alphabet’s form of restricted stock unit agreement under the Amended and Restated 2012 Stock Plan, adopted by the Leadership Development, Inclusion and Compensation Committee on December 17, 2019 for future grants, that provides for equity acceleration upon death is applicable to the equity awards granted after the adoption date.
(3) The estimated benefit amount of equity acceleration reflects prorated achievement of market-based goals at the maximum level for Tranche A and target level for Tranche B of Sundar’s 2019 PSU award. As of December 31, 2021, the full performance period of Tranche A (January 2020 to December 2021) and two-thirds of Tranche B (January 2020 to December 2022) has been completed. The value shown was calculated by multiplying 100% of the maximum number of PSUs for Tranche A and two-thirds the target number of PSUs for Tranche B by the closing price of Alphabet’s Class C capital stock on December 31, 2021, which was $2,893.59 per share.

 

ALPHABET CEO PAY RATIO

 

The following table sets forth the ratio of Alphabet Chief Executive Officer Sundar’s total compensation to that of Alphabet’s median employee for the year ended December 31, 2021.

 

Chief Executive Officer total compensation in 2021 $6,322,599
Median Employee total compensation in 2021 $295,884
Ratio of Chief Executive Officer to Median Employee total compensation 21:1

 

To determine the median employee compensation, we analyzed all of Alphabet’s employees, excluding Alphabet’s Chief Executive Officer, as of December 31, 2021. 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 metric 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 compensation of our named executive officers in the Summary Compensation Table on page 51.

 

ALPHABET    2022 PROXY STATEMENT     55

 

 

EQUITY COMPENSATION PLAN INFORMATION

 

The following table summarizes our equity compensation plan information as of December 31, 2021. Information is included for equity compensation plans approved by our stockholders and equity compensation plans not approved by our stockholders. There are no shares of Class B common stock issued and outstanding under any of our current equity compensation plans. We will not grant equity awards in the future under any of the equity compensation plans not approved by our stockholders included in the table below.

 

Plan Category  Class of
Common
Stock/Capital
Stock
  (a)
Common/
Capital
Shares to be
Issued Upon
Exercise of
Outstanding
Options and
Rights
(#)
   (b)
Weighted-
average
Exercise
Price of
Outstanding
Options and
Rights
($/Share)
(1) 

  (c)
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   10,945(2)    312.59    (3) 
Equity compensation plans approved by our stockholders  Class C   16,889,168(4)    311.60    37,479,707(5) 
Equity compensation plans not approved by our stockholders  Class A            
Equity compensation plans not approved by our stockholders  Class C            
Total  Class A   10,945    312.59     
Total  Class C   16,889,168    311.60    37,479,707(5) 
Total  Class A and Class C   16,900,113    312.10    37,479,707(5) 
(1) The weighted average exercise price is calculated based solely on the outstanding stock options. It does not take into account the shares issuable upon vesting of outstanding GSUs, which have no exercise price.
(2) Consists of stock options to purchase 10,907 shares and GSUs representing the right to acquire 38 shares of our Class A common stock outstanding under our 2004 Stock Plan.
(3) 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.
(4) Consists of stock options to purchase 10,774 shares of Class C capital stock and GSUs representing the right to acquire 38 shares of Class C capital stock outstanding under our 2004 Stock Plan, GSUs representing the right to acquire 15,520,374 shares of Class C capital stock outstanding under our Amended and Restated 2012 Stock plan, and GSUs representing the right to acquire 1,357,982 shares of Class C capital stock outstanding under our 2021 Stock Plan.
(5) Consists of shares of Class C capital stock authorized to be issued pursuant to the Alphabet Inc. 2021 Stock Plan, which was approved by our stockholders at the 2021 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  •  2022 PROXY STATEMENT     56

 
 

 

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, 2020 and 2021 (in thousands):

 

    2020
($)
  2021
($)
Audit Fees(1)   21,718   23,880
Audit-Related Fees(2)   6,652   8,715
Tax Fees(3)   988   1,155
Other Fees(4)   1,871   625
TOTAL FEES   31,229   34,375
(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  •  2022 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

 

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 2020 and 2021 were pre-approved by the Audit Committee.

 

ALPHABET  •  2022 PROXY STATEMENT     58

 

 

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, 2021. 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, 2021.

 

AUDIT AND COMPLIANCE COMMITTEE

 

Ann Mather, Chair
Roger W. Ferguson Jr.
Alan R. Mulally

 

ALPHABET  •  2022 PROXY STATEMENT     59

 
 

 

MANAGEMENT PROPOSALS TO BE VOTED ON

 

Proposal Number 1    Election of Directors

 

Nominees

 

The Nominating Committee recommended, and our Board nominated:

 

Larry Page,
Sergey Brin,
Sundar Pichai,
John L. Hennessy,
Frances H. Arnold,
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, ten directors will be elected to our Board. Alan R. Mulally, who is currently serving on our Board, is not a nominee for election at the Annual Meeting and his term as a director will end at the Annual Meeting. We thank Alan for his extraordinary contributions over many years.

 

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 21 and 33 of this proxy statement contain more information about the leadership skills and other experiences that caused the Nominating 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 Nominating 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/.

 

Alphabet Recommendation

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION TO THE BOARD OF DIRECTORS OF EACH OF THE ABOVEMENTIONED NOMINEES.

 

ALPHABET  •  2022 PROXY STATEMENT     60

 
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, 2022. During the fiscal year ended December 31, 2021, 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 57 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, 2022 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, 2022.

 

ALPHABET  •  2022 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

 

Proposal Number 3    Approval of the Alphabet Inc. Amended and Restated 2021 Stock Plan

 

At the Annual Meeting, stockholders will be asked to approve 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 4,000,000 shares.

 

In April 2022, the Compensation Committee recommended, and the full Board adopted, subject to stockholder approval, the Plan which increases the share reserve by 4,000,000 shares of Class C capital stock. Our stockholders have previously authorized us to issue under the Plan up to a total of 60,010,002 shares of Class C capital stock, subject to adjustment upon certain changes in our capital structure.

 

The Compensation Committee and the 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, 2021, of the 60,010,002 shares of Class C capital stock authorized for issuance under the Plan, 37,479,706 shares of stock remained available for future grants of stock awards, a number that the Compensation Committee and the full Board believes to be insufficient to meet our anticipated needs. Therefore, the Compensation Committee recommended, and the 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 4,000,000 shares to a total of 64,010,002 shares of our Class C capital stock, subject to adjustment upon certain changes in our capital structure. We note that in the event Proposal Number 4 is approved and our proposed stock dividend to stockholders takes place as described, all of the share numbers in the Plan, as well as all outstanding awards, will be adjusted to reflect the stock dividend in accordance with the terms of the Plan.

 

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.

 

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, 2021, the company had approximately 156,500 employees and eleven members of our Board (including three employee directors).

 

ALPHABET  •  2022 PROXY STATEMENT     62

 
1 Corporate
Governance
2 Director and
Executive
Compensation
3 Audit
Matters
4 Management
and Stockholder

Proposals
5 Questions and
Answers
6 Appendices

 

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 60,010,002 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 60,010,002 shares in the aggregate. As of December 31, 2021, of the 60,010,002 shares of Class C capital stock authorized for issuance under the Plan, 37,479,706 shares of stock remained available for future grant of stock awards. Assuming stockholders approve this proposal, a total of 64,010,002 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 64,010,002.

 

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 5, 2022, the market value of a share of Class C capital stock was $2,821.26 (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, (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

 

ALPHABET  •  2022 PROXY STATEMENT     63

 
1 Corporate
Governance
2 Director and
Executive
Compensation
3 Audit
Matters
4 Management
and Stockholder

Proposals
5 Questions and
Answers
6 Appendices

 

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, 2031.

 

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, 2021, 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.

 

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.

 

ALPHABET  •  2022 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

 

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.

 

Required Vote

 

Approval of the proposed amendment to the Plan to increase the maximum number of shares of our Class C capital stock that may be issued under the Plan by 4,000,000 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 to 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 4,000,000 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 AMENDED AND RESTATED 2021 STOCK PLAN TO INCREASE THE NUMBER OF SHARES OF CLASS C CAPITAL STOCK ISSUABLE UNDER THE PLAN BY 4,000,000 SHARES.

 

ALPHABET  •  2022 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 4    Approval of an Amendment to our Amended and Restated Certificate of Incorporation to Increase the Number of Authorized Shares

 

Our Amended and Restated Certificate of Incorporation (Charter) currently authorizes the issuance of up to nine billion (9,000,000,000) shares of Class A common stock, par value $0.001 per share; three billion (3,000,000,000) shares of Class B common stock, par value $0.001 per share; and three billion (3,000,000,000) shares of Class C capital stock.

 

As we disclosed on February 1, 2022, our Board approved and declared a 20-for-one stock split (Stock Split) 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 that is outstanding as of July 1, 2022. In connection with the Stock Split and for general corporate purposes, our Board is recommending that we increase the number of shares authorized for issuance under our Charter to one hundred and eighty billion (180,000,000,000) shares of Class A common stock, sixty billion (60,000,000,000) shares of Class B common stock, and sixty billion (60,000,000,000) shares of Class C capital stock (Charter Amendment). The full text of the Charter Amendment is set forth in Appendix B to this proxy statement. The Charter Amendment would not affect the number of authorized shares of preferred stock. Currently, there are no shares of preferred stock issued and outstanding.

 

If our stockholders approve the Charter Amendment, we expect to implement the Charter Amendment and the Stock Split following the Annual Meeting. In connection with the Stock Split, each of our stockholders of record at the close of business on July 1, 2022 (Stock Split Record Date) will receive, after the close of business on July 15, 2022: (i) nineteen (19) additional shares of Class A common stock for each share of Class A common stock held by such stockholder as of the Stock Split Record Date; (ii) nineteen (19) additional shares of Class B common stock for each share of Class B common stock held by such stockholder as of the Stock Split Record Date; and (iii) nineteen (19) additional shares of Class C capital stock for each share of Class C capital stock held by such stockholder as of the Stock Split Record Date.

 

Required Vote

 

Approval of the Charter Amendment 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 outstanding and entitled to vote thereon voting together as a single class. Unless marked to the contrary, proxies received will be voted FOR the Charter Amendment.

 

Alphabet Recommendation

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION.

 

ALPHABET  •  2022 PROXY STATEMENT     66

 

STOCKHOLDER PROPOSALS

 

Various stockholders have submitted the proposals below. Stockholders will vote on these proposals at our Annual Meeting if the proponents or their qualified representatives present their proposals at the Annual Meeting and submit them for a vote. Stockholder proposals, including any supporting statements, are included exactly as submitted to us by their proponents.

 

Our Board’s recommendation on each stockholder proposal immediately follows our opposing statement. A number of the proposals touch on matters that we believe are being appropriately handled by our management and/or our Board. While a number of these proposals contain claims that we believe are incorrect or misleading, we have not attempted to refute all of them. We do appreciate the concerns 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 the reasons set forth in the table below and others set forth in our opposing statements, we generally disagree with the proposals requesting specific additional reports or initiatives that do not fully recognize or reflect the actions we are already taking to address such issues, the clear oversight responsibilities and structures we have in place to evaluate and monitor our progress, and our ongoing commitment to transparency.

 

STOCKHOLDER PROPOSALS Alphabet Board Voting
Recommendation
Rationale
(5) Stockholder proposal regarding a lobbying report (page 70 ) AGAINST

•  Our Board is committed to transparency and the company already makes extensive disclosures on our lobbying efforts

•  Our Board also maintains oversight of Google’s corporate political activities to ensure they are serving the interest of stockholders

(6) Stockholder proposal regarding a climate lobbying report (page 72 ) AGAINST

  Our comprehensive lobbying disclosures, with oversight from our Board, provide the necessary information to understand the scope of the company’s lobbying activities, including as it relates to our positions on climate change and the Paris Agreement

(7) Stockholder proposal regarding a report on physical risks of climate change (page 74 ) AGAINST   We conduct a robust climate risk assessment and already publish information on this assessment, as well as on our climate strategies and performance, through our annual CDP and Environmental Reports
(8) Stockholder proposal regarding a report on water management risks (page 76 ) AGAINST

  We have already reported on our water management strategies and performance in Google’s Water Stewardship paper

•  Our commitment to water stewardship is reflected in our water-related goals and initiatives across our global locations

(9) Stockholder proposal regarding a racial equity audit (page 78 ) AGAINST

•  With the Board’s oversight, we already continuously review our approach to racial equity and seek engagement with independent experts and stakeholders to find areas where we can improve, including by ensuring (1) that our commitment to racial equity is reflected in our goals and actions; and (2) that we are building our products so that they work for everyone

(10) Stockholder proposal regarding a report on concealment clauses (page 81 ) AGAINST

  Google’s employment, severance, and settlement agreements do not prohibit the disclosure of facts underlying claims of harassment or discrimination

•  We review our employment practices and policies on an ongoing basis and strive to make them best in class

(11) Stockholder proposal regarding equal shareholder voting (page 83 ) 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    2022 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

 

STOCKHOLDER PROPOSALS Alphabet Board Voting
Recommendation
Rationale
(12) Stockholder proposal regarding a report on government takedown requests (page 85 ) AGAINST   We annually publish our Google Transparency Report to provide stockholders with details on how the policies and actions of governments and corporations affect privacy, security, and access to information
(13) Stockholder proposal regarding a human rights assessment of data center siting (page 87) AGAINST   Our existing disclosures provide transparent information on how we evaluate and manage human-related risks, including related to data center siting
(14) Stockholder proposal regarding a report on data collection, privacy, and security (page 89) AGAINST   We provide extensive public disclosure on our approach to data privacy and security risk management that we believe already exceeds the requests of the proposal
(15) Stockholder proposal regarding algorithm disclosures (page 91) AGAINST   We disclose significant information about our advertising and search policies and procedures and their application, and additional details on proprietary algorithmic systems could be used to compromise our operations and the quality of our services
(16) Stockholder proposal regarding misinformation and disinformation (page 93) AGAINST

  We maintain robust policies and transparent reporting on how we combat the potential spread of misinformation and disinformation

•   We take a systematic approach to ensuring respect for human rights across our business, supported by significant transparency around our efforts

(17) Stockholder proposal regarding a report on external costs of disinformation (page 96) AGAINST

  We undertake substantial efforts to prevent misuse of our platforms and provide meaningful disclosures on our policies and activities to address risks

•   Our management team has direct responsibility for combatting disinformation, and regularly meets with our Audit and Compliance Committee to discuss our efforts to ensure platform quality

(18) Stockholder proposal regarding a report on board diversity (page 98) AGAINST

  Our Board considers diversity in its director nomination and evaluation process and these practices have fostered a diverse board composition

•   We already provide information regarding the company’s board diversity practices in our proxy statement and Diversity Annual Report

(19) Stockholder proposal regarding the establishment of an environmental sustainability board committee (page 100) AGAINST   Our Board has oversight of the company’s key environmental sustainability matters and this oversight structure best serves our company to view environmental sustainability risks in the context of all of Alphabet’s major risk exposures and initiatives
(20) Stockholder proposal regarding a policy on non-management employee representative director (page 102) AGAINST

  We have established a director nomination process that effectively serves our Board and our stockholders by focusing on the critical qualities needed for effective oversight

•   Our Leadership Development, Inclusion and Compensation Committee is charged with overseeing human capital and corporate culture matters, and we have created multiple channels to provide employees with opportunities to share feedback with management and the Board

(21) Stockholder proposal regarding a report on policies regarding military and militarized policing agencies (page 104) AGAINST   We already maintain and disclose policies and principles on the use of our technology, including in the context of our work with governments, to ensure our work with customers and partners aligns with the company’s values

 

ALPHABET    2022 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

 

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    2022 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

 

Proposal Number 5    Stockholder Proposal Regarding a Lobbying Report

 

Boston Common Asset Management, LLC, on behalf of the Boston Common ESG Impact US Equity Fund, 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 Audit Committee and posted on Alphabet’s website.

 

Supporting Statement

 

Alphabet fails to provide an annual report breaking out its lobbying payments by federal, individual states, trade associations (TAs) and social welfare groups (SWGs). Alphabet spent $93,960,000 on federal lobbying from 2015 – 2020. This does not include state lobbying, where Alphabet also lobbies but disclosure is uneven or absent. For example, Alphabet spent $1,895,971 lobbying in California from 2015 – 2020. Alphabet also lobbies abroad, spending €5,750,000 as the top lobbying spender in Europe for 2020.1

 

Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity. These groups may be spending “at least double what’s publicly reported.”2

 

Alphabet lists support of 378 TAs, SWGs and nonprofits for 2020, 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 billion on lobbying since 1998, supports SWGs that lobby like Americans for Tax Reform and Taxpayers Protection Alliance, and funds controversial nonprofits like the Competitive Enterprise Institute (CEI)3 and Independent Women’s Forum (IWF).

 

Alphabet’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions. For example, Alphabet believes in addressing climate change, but the Chamber and CEI undermined the Paris climate accord. Alphabet signed a statement opposing state voter restrictions, yet the Chamber lobbied against the For the People Act.4 Alphabet has “funded a bevy of political groups, including those producing positive polling, and engaged in other fingerprint-free tactics designed to deter regulators.”5 And while Alphabet funds IWF, IWF is a partner of Stop Corporate Tyranny6 and has promoted opposition to school mask mandates.7

 

We urge Alphabet to expand its lobbying disclosure.

 

 

 

(1) https://www.reuters.com/technology/google-facebook-microsoft-top-eu-lobbying-spending-study-2021-08-30/.
(2) https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/.
(3) https://www.nytimes.com/2019/07/10/climate/nyt-climate-newsletter-cei.html.
(4) https://thehill.com/business-a-lobbying/business-a-lobbying/554430-watchdog-group-launches-campaign-to-pressure?rl=1.
(5) https://www.washingtonpost.com/technology/2020/06/10/amazon-facebook-google-political-allies-antitrust/.
(6) https://www.exposedbycmd.org/2021/09/07/alec-claims-credit-for-voter-suppression-and-anti-critical-race-theory-laws-at-secret-meeting/.
(7) https://www.washingtonpost.com/politics/2021/10/01/masks-schools-koch-money/.

 

ALPHABET    2022 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

 

Alphabet Opposing Statement

 

Our Board 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 ensuring our participation is open, transparent, and clear to our users, stockholders, and the public.

 

Consistent with our mission to organize the world’s information and make it universally accessible and useful, our Board is committed to transparency in all areas of our business, including our public policy activities and lobbying expenditures. Our 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 Publish Transparent and Extensive Lobbying Disclosures

 

Google has long been a champion of disclosure and transparency. Consistent with our mission and values, we adopted a transparency policy for our public policy activities, including our lobbying efforts. Our U.S. Public Policy Transparency website includes robust and detailed disclosures, including:

 

Our governance and management structure, policies, and procedures regarding our lobbying and political engagement activities.
Key issues informing our public policy work and our positions on such issues.
Publicly available reports on our lobbying expenditures, updated quarterly, including contributions to our NetPAC (an employee-funded political action committee), federal lobbying disclosures, state and local candidate contributions, national political committees, and organizations contributions.
List of trade associations, independent organizations, and other tax-exempt groups that receive the most substantial support from our U.S. Government Affairs and Public Policy team.
Oversight and compliance of our political activity.

 

Additionally, in compliance with applicable laws, Google discloses a significant amount of information in hundreds of publicly available filings at the state and local level in the U.S.

 

We Maintain Robust Board Oversight of Political Engagement

 

Our Board and senior management team oversees Google’s corporate political activity to ensure appropriate policies and practices are in place and serving the interest of our stockholders. The Nominating Committee reviews our political activities, including corporate expenditures, NetPAC contributions, corporate contributions to state and local political campaigns, and our prohibition on trade associations and other organizations from using Google funds for political activities. Google’s VP of Government Affairs and Public Policy, works directly with Google’s President for Global Affairs and Chief Legal Officer, Kent Walker, who reports to Google’s CEO.

 

Our Practices are Recognized as Best in Class

 

Our best in class transparency efforts have been recognized by the 2021 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 three 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 believes that the report requested by this proposal would not provide substantial additional information 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    2022 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 6    Stockholder Proposal Regarding a Climate Lobbying Report

 

Zevin Asset Management, LLC, on behalf of Sisters of Saint Dominic of Grand Rapids, as lead filer, and Benedictine Sisters of Virginia, Benedictine Sisters of Mount St. Scholastica, Missionary Oblates of Mary Immaculate - U.S. Province, along with a number of others 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.

 

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 if, and how, its lobbying activities (directly and indirectly through trade associations and social welfare and nonprofit organizations) align with the Paris Agreement’s ultimate goal to limit average global warming to 1.5° C. The report should also address Alphabet’s plans to mitigate the risks presented by any misalignment.

 

SUPPORTING STATEMENT

 

Recent UN reports highlight the critical gaps that remain between national governments and the actions necessary to prevent the worst effects of climate change.1 Companies have a crucial role to play in empowering policymakers to close these gaps, and investors need clear information on how companies are taking action to do so.

 

Investors and stakeholders are increasingly scrutinizing potential misalignment between companies’ climate commitments and policy advocacy.2 Corporate lobbying activities inconsistent with meeting the goals of the Paris Agreement present regulatory, reputational and legal risks. Such policy engagement also presents systemic risks to economies and markets, as delayed implementation of the Paris Agreement increases the physical risks of climate change, undermines economic stability and introduces into investment portfolios uncertainty and volatility.

 

Alphabet publicly supports the goals of the Paris Agreement, advocates for specific science-based climate policies, leads investment in carbon-free energy, and recently announced a new 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.”3 Alphabet also discloses a list of its memberships in trade associations and policy-focused non-profits. Alphabet does not, however, disclose sufficient information as to how it ensures lobbying practices (directly and indirectly via these groups) align with the Paris Agreement’s aims.

 

Of particular concern are industry and policy groups that represent business but too often present obstacles or obfuscations that impede global emissions reductions. A review of Alphabet’s disclosed memberships4 reveals concerning inconsistencies with Alphabet’s actions on, and commitments to, the Paris Agreement and the prevailing science.5678 An alignment assessment can help to identify and address risks presented by misalignment and protect the credibility of Alphabet’s leadership efforts on climate. We believe Paris-aligned lobbying helps mitigate these risks and contributes positively to the long-term value of companies.

 

Unabated climate change characterized by “business as usual” scenarios of 3-4°C or greater will have unacceptable and far-reaching economic, environmental, and societal implications. As investors, we view fulfillment of the Paris Agreement’s stated goals as an economic imperative.

 

Thus, we urge the Board and management to conduct a comprehensive review of Alphabet’s lobbying and public policy activity, assessing the degree of alignment with the Paris Agreement’s objectives, and detailing clear plans for action to address any misalignment.

 

 

 

(1) https://www.unep.org/resources/emissions-gap-report-2021
(2) https://www.politico.com/news/2021/04/20/investors-corporate-climate-lobbying-activity-483429
(3) https://support.google.com/google-ads/answer/11221321?hl=en
(4) https://kstatic.googleusercontent.com/files/565eb487f8cf9f96af89a4147ee79eb4cf3989d3c3953197b1e36e65e132b57ffaebccfb03ed62c57b8ffc5cd83654686f6b5160a97d3b561bc65ce5206012e9
(5) https://cei.org/sites/default/files/20170508%20CEI%20Paris%20Treaty%20with%20logos%20-%2044%20Final.pdf
(6) https://www.aei.org/politics-and-public-opinion/its-time-to-cancel-the-climate-crisis/ (Nov. 12, 2021)
(7) https://www.cato.org/public-comments/public-comments-request-public-input-climate-change-disclosures https://www.cato.org/briefing-paper/what-should-policymakers-do-about-climate-change#externalities-limits-private approaches-dealing-carbon-emissions
(8) https://www.heritage.org/renewable-energy

 

Alphabet Opposing Statement

 

Our Board believes that our existing disclosures on lobbying, trade association, and political engagement, in combination with our climate change strategy and transparent reporting on our climate-related activities, makes the additional reporting requested by this proposal unnecessary and duplicative, and therefore recommends a vote AGAINST this proposal.

 

We Have Highlighted Our Support for the Paris Agreement and Our Positions and Actions on Climate Change and Clean Energy

 

Alphabet and our Board have long supported robust international action on climate change. We have demonstrated this commitment through our ongoing public support of the Paris Agreement, our collaboration with our peers and key stakeholders, and our active engagement with policymakers to drive climate action. Leading up to COP-21 in Paris in 2015, we publicly supported a robust outcome

 

ALPHABET    2022 PROXY STATEMENT     72

 
1 Corporate
Governance
2 Director and
Executive
Compensation
3 Audit
Matters
4 Management
and Stockholder

Proposals
5 Questions and
Answers
6 Appendices

 

from the global climate negotiations. In 2019, our CEO Sundar Pichai joined with over 80 other CEOs and labor leaders as part of United for the Paris Agreement initiative to call for the U.S. to remain in the Paris Agreement, and later applauded the Biden Administration’s decision to rejoin the Agreement. We were an official partner of COP-26 in 2021, where an executive leadership team led by our CFO Ruth Porat joined with other business, government, and non-governmental leaders in Glasgow to call for accelerated action on climate.

 

We have consistently supported strong climate policies. For instance, we actively supported and submitted comments on the design of the Clean Power Plan under the Obama Administration; in March 2021 we advocated for 24/7 carbon-free energy for federal facilities; and in April 2021, we called for and supported the announcement of an ambitious 2030 goal to cut U.S. emissions. We have similarly lent public support to climate goals in the European Union, and helped found the Climate Neutral Data Center Pact, a commitment to helping transition the data center sector to be climate neutral by 2030 in line with the European Green Deal.

 

Our ambitious climate goals for our own operations reflect our commitment to mitigating our climate impacts, including our previously shared goal to achieve net-zero emissions across our operations and value chain and to become the first major company to operate on carbon-free energy 24 hours a day, seven days a week, 365 days a year by 2030. We disclose our emissions performance annually in our Environmental Report and through the CDP Climate survey.

 

We Already Publish Transparent and Extensive Lobbying Disclosures With Robust Board Oversight

 

Google’s U.S. Public Policy Transparency Report for our public policy and lobbying activities provides robust and regularly updated disclosures on topics including our lobbying-related governance and policies, key issues informing our public policy work, regular reporting on our lobbying expenditures, and a list of trade associations in which we participate.

 

Our reporting also includes transparent disclosure on instances where we have engaged in lobbying activity specifically on climate-related issues. For instance, our most recent federal lobbying report, covering Q4 2021, includes our lobbying efforts with regard to U.S. federal energy policy, including the Clean Energy for Americas Act, CLEAN Future Act, and Clean Electricity Performance Program provisions of the Build Back Better Act, all of which align with our advocacy for ambitious federal climate and clean energy policies.

 

Our Board and senior management team oversees our corporate political activity to ensure appropriate policies and practices are in place and serving the interest of our stockholders. The Nominating Committee reviews our corporate political activities, including expenditures made with corporate funds, contributions to our NetPAC (an employee-funded political action committee), direct corporate contributions to state and local political campaigns, and our prohibition on trade associations and other organizations using Google funds for political activities.

 

We Advance Sustainability Through Trade Association Participation

 

Our participation in various trade associations provides us the platform to conduct robust and productive engagement on climate policy, including at the U.S. Chamber of Commerce, Business Roundtable, and others. For example, we are founding members of the Chamber’s Task Force on Climate Actions, and we have engaged within the Task Force since its inception to support constructive engagement by the Chamber on climate policy to create a zero-carbon economy. We encourage our trade associations to support sensible climate policies that can create a prosperous and competitive net-zero economy.

 

We participate in trade associations to advance the interests of our company and our stockholders. We respect the independence and agency of trade associations to shape their own policy agendas and positions, and our participation does not represent an endorsement of an organization’s entire agenda or the views of its leaders or other members.

 

Our comprehensive lobbying disclosures, with oversight from our Board, provide the information needed by our stockholders and other stakeholders to understand the scope of these activities, including as it relates to our positions on climate change and the Paris Agreement. Our Board therefore believes that publishing an additional report narrowly focused on climate-related lobbying would not provide additional meaningful information 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    2022 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 Number 7    Stockholder Proposal Regarding a Report on Physical Risks of Climate Change

 

Pax World Funds, as lead filer, and The Comptroller of the State of New York, Thomas P. DiNapoli, on behalf of the New York State Common Retirement Fund, as co-filer, have advised us that they intend to submit the proposal set forth below for consideration at our Annual Meeting.

 

Resilience to Physical Risks Posed By Climate Change

 

Resolved, shareowners request that Alphabet (“the Company”) publish a regular periodic assessment of resilience to the physical risks of climate change, including description of short-, medium-, and long-term measures that the Company is taking to mitigate physical risks, including threats to its headquarters and other key assets from sea level rise and flooding. The report should be completed at reasonable cost and omit proprietary information.

 

Supporting Statement:

 

S&P Global states that nearly 60% of companies in the S&P 500 “hold assets at high risk of physical climate change impacts.” Even where companies do not have vulnerable assets, they may be exposed to physical risks through impacts of climate hazards on critical infrastructure and key parts of their value chain, both upstream and downstream.

 

Alphabet has characterized physical risks to its headquarters and data centers:

 

We found our biggest risk to be flooding at our Bay Area headquarters. In 2020, we conducted an updated global assessment of near-term (2030) and mid-term (2050) climate risks [which] found exposure to flooding and extreme heat across the portfolio to be our biggest risks. Our 2017 assessment suggested that these trends are likely to increase and continue through the end of the century.

 

Despite these disclosures of identified risks, the Company offers little disclosure regarding its adaptive planning for these short-, medium-, and long-term risks. It is prudent for investors to know whether the company is taking reasonable mitigation measures or contingency plans for these risks, such as efforts to protect or relocate its Bay Area headquarters, and to mitigate the risks to data centers.

 

The implementation guide for the Task Force on Climate-related Financial Disclosures (TCFD) recommends that reporting companies utilize Sustainability Accounting Standards Board (SASB) and Climate Disclosure Standards Board (CDSB) which are “well-established in the market with rigorously developed TCFD-aligned reporting tools,” as guidance to help shape reporting on mitigation strategies for physical climate risks. The implementation guide illustrates how a company should go beyond identifying physical risks, to also report on measures being taken to protect the company’s business from those risks.

 

A recent scientific article in Nature Climate Change noted that the financial value at risk from climate change averaged $2.5 trillion, but tail risk could exceed $24 trillion. Losses at this scale could involve a substantial impairment in fundamental value.

 

Alphabet and its investors will benefit from disclosure of a resilience strategy to address mitigation of physical risks.

 

Alphabet Opposing Statement

 

Given our existing robust environmental and climate change reporting, our Board does not believe that the report requested by this proposal would be an effective use of company resources or provide additional information that would be of value to our stockholders and therefore recommends a vote AGAINST this proposal.

 

We Maintain an Effective Climate Risk Assessment Process

 

Sustainability is one of our key priorities. In April 2021, we formally expressed our support for the Task Force on Climate Related Financial Disclosures (TCFD) reporting framework, including its seven principles for climate disclosures, as an important tool to allow stakeholders to compare corporate commitments and performance. Risk management is among the key pillars of the TCFD and, as disclosed in our publicly available CDP reporting, we have conducted climate risk assessments for our physical assets. Our Chief Sustainability Officer collaborates with our risk management and operations teams to ensure risks and opportunities are identified and evaluated across our company for mitigation of and adaptation to climate change.

 

Within our climate risk assessment, we have conducted physical risk assessments of our real estate operations, including priority office sites and data center locations, and considered both acute and chronic physical risks. In 2017, we conducted an assessment of our exposure to climate risk in the near-term (2020-2025), mid-term (2050), and long-term (2100). This included a global assessment of the impact of sea level rise, flooding, drought, temperature and water stress on our real estate operations. In 2020, we conducted an updated climate risk assessment, including climate scenario analysis and an assessment of the impact of flooding, water stress, extreme heat, and wildfires on 26 priority office sites and 23 data center locations. The results of these analyses are considered in relevant decision-making processes, such as the overall development strategy for our expanding footprint. We continue to develop and evolve our risk assessment practices in consideration of TCFD’s guidance and will continue to publicly disclose this information in our CDP reporting.

 

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We Publish Robust, Transparent Disclosures on Our Climate Strategies, Performance, and Risk Assessment

 

As described above, we already publish meaningful information on our approach to climate change and climate risks, through our annual CDP reports and annual Environmental Reports. This disclosure aligns with TCFD’s recommendations and contains, among others, a description of:

 

Our Board’s oversight of climate-related risks and opportunities, including oversight responsibilities of the Audit Committee of sustainability risks;
Our processes for identifying and assessing climate-related risks, as described above;
Management’s role in assessing and managing risks and opportunities;
The climate-related risks and opportunities we have identified over the short, medium, and long term; and
Our Scope 1, Scope 2, and, where appropriate, Scope 3 greenhouse gas emissions.

 

We Have Set Robust Climate-Related Environmental Goals

 

Understanding the importance of creating a climate transition plan, in 2020 we launched our third decade of climate action to accelerate the climate transition. We are now working toward a new set of ambitious goals, which should strengthen our resilience to climate-related risks and help us harness opportunities. As we have previously shared, by 2030, our goal is to:

 

Achieve net-zero emissions across all of our operations and value chain;
Become the first major company to run on carbon-free energy 24 hours a day, seven days a week, 365 days a year;
Enable 5 gigawatts of new carbon-free energy through investments in our key manufacturing regions; and
Help more than 500 cities and local governments reduce an aggregate of 1 gigaton of carbon emissions annually.

 

Our annual Environmental Report discloses our progress towards these and other sustainability targets. We regularly track our progress toward our environmental goals and targets, and share updates with our stakeholders. Data and transparency are important markers of the progress we are making to evaluate and address climate-related risks and opportunities.

 

Our existing disclosures provide meaningful insight into how we identify, assess, and mitigate climate-related risks, including physical risks. As a result, our Board does not believe that the additional reporting requested in this proposal would provide substantial additional information 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    2022 PROXY STATEMENT     75

 
1 Corporate
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and Stockholder

Proposals
5 Questions and
Answers
6 Appendices

 

Proposal Number 8    Stockholder Proposal Regarding a Report on Water Management Risks

 

As You Sow, on behalf of James McRitchie, as lead filer, and on behalf of other co-filers, whose names, addresses and stockholdings will be provided by us upon request, has advised us that it intends to submit the proposal set forth below for consideration at our Annual Meeting.

 

REPORT ON WATER MANAGEMENT RISKS

 

WHEREAS: Climate change is expected to exacerbate water shortages globally. NASA, using array of satellites, has observed a distinctive pattern of the wet land areas of the world getting wetter and the dry areas in between getting dryer, increasing regional droughts, and resulting in hotspots of groundwater depletion.1

 

Increasing drought and water scarcity poses an outsize risk to Google, whose data centers require substantial amounts of water for cooling. Our Company also faces risks due to competition for water resources by local communities or other companies or industries.2

 

To reduce water risk and reduce costs, many large companies have developed water planning measures, water conservation programs, and reporting of water stress and water use, among other practices. Google’s 2021 Water Stewardship Report3 indicates an understanding of the important role of water scarcity management, describing generalized commitments to improve its operational water sustainability, including a goal to “replenish more water than we consume by 2030.”4

 

Google further states the importance of water-related data, describing a tool it helped develop “which aims to democratize information on water resources and empower policymakers, conservation organizations, and communities to better manage water resources collectively.”5

 

Yet, despite acknowledging the importance of these issues,6 our Company offers no recent reporting on its total enterprise-wide water use, nor does it disclose annual water use or other risk metrics by location. In fact, Google states that its local water use information, and its water use agreements with local governments, are trade secret.7 The company has claimed that public officials cannot disclose the company’s water consumption and may not respond to public record act requests seeking information about Google’s actual and proposed water use. This behavior has led to lawsuits, ill-will, and reputational damage.

 

Disclosure of location-specific water use metrics and management actions is the primary means by which investors can gauge whether our Company is sufficiently managing its water risk. Companies such as Coca-Cola provide in-depth water reporting including information on water-stressed areas.8 Google has not provided adequate information to shareholders on its location-specific water use, impacts, and actions so as to allow shareholders to accurately gauge localized water stress trends and risks, which are expected to be exacerbated by climate change.

 

RESOLVED: Shareholders request that Google annually report, at reasonable cost, quantitative water-related metrics by location, including data centers, and for each location, practices implemented to reduce climate-related water risk.

 

SUPPORTING STATEMENT: Proponents request the report disclose, at management discretion:

 

  Annual water use-related metrics by location, including for data centers;
  Any location-specific water reduction targets and annual progress in achieving them;
  Location-specific risk assessments and water scarcity planning;
  Any integration of water and company governance mechanisms;
  Any compensation incentives related to water use reductions.

 

 

 

(1) https://www.nasa.gov/press-release/nasa-satellites-reveal-major-shifts-in-global-freshwater
(2) https://www.bloomberg.com/news/features/2020-04-01/how-much-water-do-google-data-centers-use-billions-of-gallons
(3) https://www.gstatic.com/gumdrop/sustainability/google-water-stewardship.pdf
(4) https://sustainability.google/commitments/water/#technology-tools
(5) https://sustainability.google/commitments/water/#technology-tools
(6) https://www.gstatic.com/gumdrop/sustainability/google-2021-environmental-report.pdf
(7) https://www.oregonlive.com/silicon-forest/2021/11/the-dalles-sues-to-keep-googles-water-use-a-secret.html
(8) https://www.coca-colacompany.com/content/dam/journey/us/en/policies/pdf/sustainability/2020-cdp-water-response.pdf

 

Alphabet Opposing Statement

 

Given our existing robust water management strategies and reporting, our Board does not believe that the report requested by this proposal would be an effective use of company resources or provide additional information that would be of value to our stockholders and therefore recommends a vote AGAINST this proposal.

 

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5 Questions and
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6 Appendices

 

We Report on Our Water Management Strategies and Performance

 

We are committed to responsibly managing water at our facilities around the world, from our offices to our data centers, and water stewardship is among our key sustainability commitments. The nature and needs of our operations vary significantly, so we tailor our water stewardship approaches based on facility type, location, and local water context and risk. Google’s Water Stewardship paper, released in September 2021, provides details on the various innovative practices we implement to reduce climate-related water risk, both locally and globally. Starting with our 2020 Environmental Report covering the 2019 fiscal year, we enhanced our disclosure of operational water metrics to align with industry standards by introducing disclosure of three water indicators: total water withdrawal, consumption, and discharge. This information can be found in Google’s subsequent annual Environmental Reports.

 

We Are Focused on Effective Water Management Across Our Global Footprint

 

As a global company headquartered in drought-prone California, we have established a set of water principles to guide our approach to water use and ensure business and community continuity, especially in the places that face the greatest potential risk. Under these principles, we are working to use water responsibly, exploring ways to incorporate circularity, and engaging in partnerships that use Google technology to raise awareness of water-related risks and opportunities and to create platforms that help everyone understand global water challenges.

 

Across our global office facilities, we have initiated water efficiency and reduction measures by adopting standards aligned with Leadership in Energy and Environmental Design (LEED) certification. In 2020, we achieved the Alliance for Water Stewardship International Standard at our Mountain View, Los Angeles, and Dublin, Ireland office campuses, helping us work collaboratively with local stakeholders.

 

Our data centers employ a variety of cooling solutions based on site specific and compute platform based needs. We are focused on accelerating efficiency and using a localized, community-based approach to be responsible stewards. We have reduced water-use intensity within our cooling systems by recirculating water within the same data center, which saves up to 50% of water when compared with “once-through” cooling systems. As Google’s Water Stewardship paper indicates, various water-efficient solutions have been implemented to cool our data centers around the world, including the usage of industrial water from a new pipeline funded by Google in Eemshaven, Netherlands; sea water in Hamina, Finland; raw water from a nearby industrial canal in St. Ghislain, Belgium; and reclaimed wastewater in Douglas County, Georgia. At some of our data center locations, such as in Storey County, Nevada, and Dublin, Ireland, we have piloted air-cooled technology that reduces our cooling water demand. In addition to the work we do already, we are committed to responsibly manage, source, and design water solutions for our existing and new data centers based on robust local-level watershed assessments.

 

We Have Set Robust Water-Related Goals

 

We are proud of the progress we have made to advance water stewardship, but we also recognize the growing scale and urgency of the world’s water challenges. To benefit the people and places where we operate, we have set goals to replenish more water than we consume by 2030 and to support water security in communities where we operate. We are focused on three areas to achieve this goal:

 

Enhancing our stewardship of water resources across Google office campuses and data centers;
Replenishing 120% of the average amount of water we consume across our offices and data centers, and improving watershed health and ecosystems in water-stressed communities; and
Sharing technology and tools that help everyone predict, prevent, and recover from water stress.

 

Water stewardship is an evolving area, and we are striving to improve how we keep our stockholders and stakeholders apprised of our progress. Given our steadfast commitment to advance responsible water use and our public disclosures around our water stewardship work to date, including initiatives implemented to reduce such risks, 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    2022 PROXY STATEMENT     77

 
1 Corporate
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2 Director and
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Proposals
5 Questions and
Answers
6 Appendices

 

Proposal Number 9    Stockholder Proposal Regarding a Racial Equity Audit

 

The Nathan Cummings Foundation, as lead filer, along with a number of others 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.

 

Racial Equity Audit

 

RESOLVED: Shareholders urge the Board of Directors to commission a third-party, independent racial equity audit analyzing Alphabet Inc.’s adverse impacts on Black, Indigenous and People of Color (BIPOC) communities. Input from racial justice and civil rights organizations and employees, temporary vendors, and contractors should be considered in determining specific matters to be analyzed. A report on the audit, prepared at reasonable cost and omitting confidential and proprietary information, should be published on Alphabet’s website.

 

WHEREAS: The harmful and often deadly impacts of systemic racism on BIPOC communities are a major focus of policymakers, media, and the public. While Alphabet has made charitable contributions and statements of solidarity with communities of color it must do more to address significant adverse impacts of its policies, practices, and products on communities of color.

 

Several aspects of Alphabet’s business suggest a racial equity audit would help mitigate reputational, regulatory, legal, and human capital risk. Alphabet’s Google and YouTube have been implicated in perpetuating racism. The New York Times reported YouTube was “successfully weaponized by racists...to undermine Black Lives Matter.” Research shows “YouTube plays a key role in exposing young people to white supremacist ideology and anti-Muslim propaganda.”1

 

Google’s advertising practices have prompted boycotts by advertisers concerned about discrimination, causing the company to lose advertising revenue. In 2021, five U.S. Senators urged Alphabet to “conduct a racial equity audit … to make the company and its products safer for Black people,” saying “Google Search, its ad algorithm, and YouTube have all been found to perpetuate racist stereotypes and white nationalist viewpoints.”2

 

Shareholders are concerned with the potential adverse impact of Google’s artificial intelligence (AI) tools on communities of color. Researchers found that an AI tool developed to detect hate speech was up to twice as likely to identify tweets as offensive when they were written with African American Vernacular English (AAVE) or by African Americans.3 Dermatologists have warned that Google’s dermatology app could disproportionately misdiagnose people with dark skin.4 Research found that Google’s face detection technology is susceptible to a range of racial biases.5 Google’s Vision AI labeled a thermometer a “gun” when held by a person of color, but labeled a similar image an “electronic device” when held by a white person.6 Furthermore, there are concerns that Google’s technology may be used by the government to surveil immigrants of color.7

 

Executives at peer companies have affirmed the usefulness of racial equity audits,8 as have civil rights organizations.9

 

Despite these and other issues, Alphabet has allegedly retaliated against employees who flagged issues of discrimination.10 In 2020, nine lawmakers wrote to Alphabet with concerns after Google fired Dr. Timnit Gebru, co-lead of Google’s AI Ethics team, who led research on discriminatory technology. In 2021, employees told reporters11 that when they reported workplace racism, they were told to “assume good intent,” seek counseling, or take leave.

 

 

 

(1) https://acrecampaigns.org/wp-content/uploads/2020/04/FanningtheFlames-Oct2019.pdf
(2) https://www.booker.senate.gov/imo/media/doc/booker_colleagues_urge_major_tech_conglomerate_alphabet_inc.toconductracialequityauditontheirproducts.pdf?utm_campaign=wp_the_technology_202&utm_medium=email&utm_source=newsletter&wpisrc=nl_technology202
(3) https://www.newscientist.com/article/2213064-googles-hate-speech-detecting-ai-appears-to-be-racially-biased/#ixzz771qKjsPa
(4) https://www.vice.com/en/article/m7evmy/googles-new-dermatology-app-wasnt-designed-for-people-with-darker-skin
(5) https://venturebeat.com/2021/09/03/bias-persists-in-face-detection-systems-from-amazon-microsoft-and-google
(6) https://algorithmwatch.org/en/google-vision-racism/
(7) https://theintercept.com/2020/10/21/google-cbp-border-contract-anduril/
(8) http://civilrightsdocs.info/pdf/reports/Civil-Rights-Audit-Report-2021.pdf
(9) https://beyondthestatement.com/tech-framework/
(10) https://www.engadget.com/nlrb-google-complaint-expansion-212411947.html
(11) https://www.nbcnews.com/tech/tech-news/google-advised-mental-health-care-when-workers-Complained-about-racism-n1259728

 

ALPHABET    2022 PROXY STATEMENT     78

 
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Proposals
5 Questions and
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6 Appendices

 

Alphabet Opposing Statement

 

Our Board has carefully considered this proposal and, while we share the proponent’s overall goals of equity and inclusion as well as the belief that it is important to understand systems and processes, we do not believe the proponent’s proposal is the best way to accomplish those shared goals.

 

Our Board believes that our current commitments, actions, and transparent disclosures describing our efforts to build racial equity already meet the aim of the proponent’s request. Specifically, with the Board’s oversight, we continuously review our approach to racial equity to find areas where we can improve, including by ensuring (i) that our commitment to racial equity is reflected in our goals and actions; and (ii) that we are building our products so that they work for everyone. We are also transparent with our Board, employees, stockholders, and the civil rights community about our goals and how we are performing against those goals. Most recently, we have retained noted civil rights attorney and expert Debo Adegbile, Chair of WilmerHale’s Anti-Discrimination Practice, to inform our work and program development. Our Board therefore recommends a vote AGAINST this proposal.

 

We Are Demonstrably Committed to Advancing Racial Equity through Concrete Goals and Actions

 

As our CEO Sundar Pichai said in his 2020 message “Our commitments to racial equity”, strengthening our commitment to racial equity and inclusion will help Google build more helpful products for our users and the world. We continue to evaluate our approach to ensuring racial equity and inclusion and take additional actions where necessary. Our Board has played an important role in elevating our focus on racial equity. In 2020, our Board agreed on a series of industry-leading principles and improvements that incorporated input from both Googlers and our stockholders, including the creation of a new Diversity Equity and Inclusion (DEI) Advisory Council comprised of senior executives and external DEI experts. Our Board has been working closely with our CEO and senior leadership to ensure that issues of misconduct, including discrimination, are properly addressed and that those who report misconduct receive care and support. Where allegations of misconduct are made against senior executives, our company has designated a specialist team to handle the inquiry and report the results of any case to the Audit Committee.

 

As part of our racial equity commitments, we set a goal to improve leadership representation of Black+, Latinx+ and Native American+ Googlers in the U.S. by 30% by 2025. Led by our Chief Diversity Officer Melonie Parker, the last two years have seen our biggest growth for hiring Black+ Googlers in the U.S. — both overall and in tech roles. As a result, we have already reached that leadership representation threshold, and we are on track to double the number of Black+ Googlers at all other levels in the U.S. by 2025. We are also investing in onboarding, progressing, and retaining Googlers from underrepresented communities, including by investing in fair and consistent performance reviews, promotion, and pay outcomes. Leadership engagement and accountability is critical in this area, so all VPs are now evaluated on their leadership in support of diversity, equity, and inclusion, which factors into their performance ratings and pay.

 

In order to elevate our internal civil and human rights leadership, we appointed a dedicated Head of Civil Rights and a Global Head of Human Rights. We also launched our Human Rights Executive Council to provide expertise and guidance to our Human Rights Program on global human rights and domestic civil rights in the U.S. Through continued and structured consultation with civil society and other stakeholders, we continue to identify, prioritize, and address existing and potential civil rights impacts of our policies, practices, and services. These external engagements, and our internal experts, help us to better incorporate civil and human rights principles into day-to-day decision-making.

 

We Are Investing in Making Products That Work for Everyone

 

As a part of our ongoing commitment to product inclusion, we work to make technology more equitable and accessible. We continue to develop and release tools and resources to mitigate discriminatory bias both in our own products and more generally. We have improved our algorithms to serve all users and reduce stereotypical representations of people and other forms of problematic results, and this work continues. We continually update and improve the filters we use to block offensive language from appearing in results. In collaboration with the U.S. Department of Housing and Urban Development, we launched a policy to prohibit housing, employment, and credit advertisers from targeting ads based on age, gender, family status, or ZIP Code, building on our longstanding policies prohibiting targeting based on sensitive categories like race. We also developed more stringent hate speech and harassment policies for YouTube that specifically ban videos alleging that a group is superior based on qualities like race, gender, religion, or sexual orientation in order to justify discrimination, segregation, or exclusion. We are steadfast in our commitment to ensure that underrepresented users, artists, and creators can share their stories on our platform and not experience hateful, supremacist, or bullying responses.

 

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Since 2020, we have launched 80 new projects to promote product equity, including a Black-owned business attribute on Maps, responses on Black Lives Matter topics in Assistant, and ways marketers can support Black-owned publishers in Display & Video 360. We recently undertook an effort to improve the quality and equity of digital photography, partnering with 17 professional image makers to improve our computational photo algorithms to address long-standing issues with how digital cameras represent Black people. This includes auto-balance adjustments to bring out natural brown tones and prevent over-brightening and desaturation of darker skin tones. Just last year, we launched the Pixel 6 with an improved camera, plus face detection and editing products, which we call Real Tone — specifically to power images with more brightness, depth, and detail across skin tones.

 

We worked closely with the United States Hispanic Chamber of Commerce (USHCC) to unveil a new Latino-owned attribute in Google Business Profiles to help people discover Latino-owned businesses in Google Search and Maps. We are creating Grow with Google digital resource centers with USHCC that will train an additional 10,000 Latino business owners on how to use digital tools to grow their businesses. Last year, we made our inclusive marketing toolkit available to all marketers. This toolkit has helped us create marketing that positively and authentically represents communities, and we are excited to share what we have learned with the industry.

 

We continue to be one of the leading companies investing heavily in responsible AI and implementation, in support of our view that AI should be socially beneficial, avoid creating or reinforcing unfair bias, and be accountable to people. Our responsible engineering efforts are led by Dr. Marian Croak, VP Engineering, Responsible AI Research & Engineering, who created a new center of expertise on responsible AI within Google Research. Dr. Croak is one of many Googlers working across our company to help develop AI responsibly and with positive social impact.

 

We Are Transparent About Our DEI and Racial Equity Efforts, Including Our Commitments, Performance, and Areas for Further Improvement

 

Consistent with our mission and company-wide commitment to transparency, we have a long record of reporting on our DEI and racial equity work and have publicly released our workforce diversity data since 2014. Our Diversity Annual Report describes both our successes and our continued challenges as we act on our DEI commitments — recognizing that a systemic approach to racial equity is integral to advancing it within and beyond Google. We have also expanded the scope of data we publish, including disaggregating by hiring, attrition, and intersectional identities, and we have worked with internal and external experts to use that data to inform our planning and resourcing. This year, we are expanding our transparency through a series of quarterly updates to provide additional visibility and accountability.

 

Our Google Transparency Report shows how we are enforcing our guidelines, including provisions against hate speech on services like YouTube. Over the past several years, we have added additional granularity, including our recent addition of a YouTube metric called Violative View Rate (VVR), which estimates the proportion of video views that violate YouTube’s Community Guidelines in a given quarter (excluding spam). We have added historical data for this metric to our Transparency Report, showing that our investments in machine learning and other steps have driven a 70% drop in VVR since the end of 2017.

 

Given our significant actions to evaluate and improve our DEI and racial equity efforts and our robust transparency around this work, our Board does not believe that the audit requested by this proposal would provide substantial additional information to stockholders as we advance this work.

 

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    2022 PROXY STATEMENT     80

 
1 Corporate
Governance
2 Director and
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Proposals
5 Questions and
Answers
6 Appendices

 

Proposal Number 10  Stockholder Proposal Regarding a Report on Concealment Clauses

 

Whistle Stop Capital, on behalf of its clients whose names, addresses, and stockholdings will be provided by us upon request, has advised us that it intends to submit the proposal set forth below for consideration at our Annual Meeting.

 

RESOLVED:

 

Shareholders of Alphabet Inc. (“Alphabet”) ask that the Board of Directors prepare a public report assessing the potential risks to the company associated with its use of concealment clauses in the context of harassment, discrimination and other unlawful acts. The report should be prepared at reasonable cost and omit proprietary and personal information.

 

SUPPORTING STATEMENT: Concealment clauses are defined as any employment or post-employment agreement, such as arbitration, non-disclosure or non-disparagement agreements, that Alphabet asks employees or contractors to sign which would limit their ability to discuss unlawful acts in the workplace, including harassment and discrimination.

 

WHEREAS:

 

Alphabet wisely uses concealment clauses in employment agreements to protect corporate information, such as trade secrets. However, harassment and discrimination are not trade secrets, nor are they core to Alphabet’s operations or needed for competitive reasons. Yet, Alphabet’s employment agreements may prohibit their workers from speaking openly on these topics. Given this, investors cannot be confident in their knowledge of Alphabet’s workplace culture.

 

A healthy workplace culture is linked to strong returns. McKinsey found that companies in the top quartile for workplace culture post a return to shareholders 60 percent higher than median companies and 200 percent higher than organizations in the bottom quartile.1 A study by the Wall Street Journal found that over a five-year period, the 20 most diverse companies in the S&P 500 had an average annual stock return almost six percentage points higher than the 20 least diverse companies.2

 

In contrast, a workplace that tolerates harassment invites legal, brand, financial and human capital risk. Companies may experience reduced morale, lost productivity, absenteeism and challenges in attracting and retaining talent.3 Employees who engage in harmful behavior may also be shielded from accountability.

 

Pinterest paid $22.5 million to settle a gender discrimination lawsuit brought by a former executive after years of binding employees who settled discrimination claims to concealment agreements. Shareholders sued Pinterest executives alleging a breach of fiduciary duty by “ perpetrating or knowingly ignoring the long-standing and systemic culture of discrimination and retaliation.”4 Similarly, in 2020, Alphabet agreed to limit confidentiality restrictions associated with harassment and discrimination cases in a $300 million settlement of shareholder lawsuits alleging the company created a toxic work environment.5

 

Yet, in 2021, reports suggested that at Alphabet’s Google, employees who filed internal complaints about racism and sexism were offered counseling or medical leave6 and Google paid $3.8 million to settle allegations of pay and hiring discrimination against women and Asian workers.7 Investors seek assurance that more missteps are not occurring at Alphabet, hidden from view because of concealment clauses.

 

California law prohibits concealment clauses in employment agreements involving recognized forms of discrimination and unlawful activity.8 Alphabet works under a patchwork of state laws related to the use of concealment clauses and may benefit from consistent practices across all employees and contractors.

 

 

 

(1) https://www.mckinsey.com/business-functions/organization/our-insights/the-organization-blog/culture-4-keys-to-why-it-matters
(2) https://www.wsj.com/articles/the-business-case-for-more-diversity-11572091200
(3) https://conference.iza.org/conference_files/LaborMarkets_2021/sockin_j28322.pdf
(4) https://www.institutionalinvestor.com/article/b1phynsfffr2bp/Retirement-System-Sues-Pinterest-Board-and-Execs-Over-Discrimination
(5) https://nytimes.com/2020/09/25/technology/google-sexual-harassment-lawsuit-settlement.html
(6) https://nytimes.com/2021/07/28/us/google-workplace-complaints-counseling.html
(7) https://abcnews.go.com/Business/google-pay-38-million-alleged-discrimination-women-asians/story?id=75633080
(8) https://www.marketwatch.com/story/silenced-no-more-act-becomes-law-in-california-crippling-ndas-11633705395

 

ALPHABET  •  2022 PROXY STATEMENT     81

 
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 has closely evaluated this proposal and believes that our existing policies and practices comply with and often exceed legal requirements, and help us fulfill our commitment to equality and fairness. Specifically, they prohibit sexual harassment, permit an effective response to complaints of sexual harassment, discrimination, and retaliation, and promote diversity, equity, and inclusion in the workplace, and in fact, Google’s employment, severance, and settlement agreements do not prohibit the disclosure of facts underlying claims of harassment or discrimination. 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.

 

Google’s Employment, Severance and Settlement Agreements Do Not Prohibit Disclosure of Facts and Circumstances Underlying Claims of Harassment or Discrimination

 

Google’s employment, severance, and settlement agreements do not prohibit the disclosure of facts underlying claims of harassment or discrimination. Specifically, its employment agreement provides that “nothing in this Agreement limits any right I may