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:
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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)

 

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

 

DEAR STOCKHOLDERS

 

We are pleased to invite you to participate in our 2023 Annual Meeting of Stockholders (Annual Meeting) to be held on Friday, June 2, 2023, at 9:00 a.m., Pacific Time. We have adopted a virtual format for our Annual Meeting to provide a consistent experience to all stockholders regardless of location.

 

Alphabet stockholders of Class A or Class B common stock (or their proxy holders) as of the close of business on the record date, April 4, 2023 (Record Date), can participate in and vote at our Annual Meeting by visiting www.virtualshareholdermeeting.com/GOOGL23 and entering the 16-digit control number included in your Notice of Internet Availability of Proxy Materials (Notice), voting instruction form, or proxy card. All others may view the Annual Meeting through our Investor Relations YouTube channel at www.youtube.com/c/AlphabetIR.

 

Further details regarding participation in the Annual Meeting and the business to be conducted are described in the Notice you received in the mail and in this proxy statement. We have also made available a copy of our 2022 Annual Report to Stockholders (Annual Report) with this proxy statement. We encourage you to read our Annual Report. It includes our audited financial statements and provides information about our business.

 

We have elected to provide access to our proxy materials online under the U.S. Securities and Exchange Commission’s “notice and access” rules. We are constantly focused on improving the ways people connect with information, and believe that providing our proxy materials online increases the ability of our stockholders to connect with the information they need, while reducing the environmental impact of our Annual Meeting.

 

Your vote is important. Whether or not you plan to participate in the Annual Meeting, we hope you will vote as soon as possible. You may vote online, as well as by telephone, or, if you requested to receive printed proxy materials, by mailing a proxy or voting instruction form. Please review the instructions on each of your voting options described in this proxy statement and in the Notice you received in the mail. For more information, please see the Questions and Answers section of this proxy statement or visit the 2023 Annual Meeting section of our Investor Relations website at https://abc.xyz/investor/other/annual-meeting/.

 

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

 

Sincerely,

 

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

 

APRIL 21, 2023

 
 

 

LETTER FROM THE CHAIR
OF THE BOARD OF DIRECTORS

 

Dear Fellow Stockholders,

 

In recent years, there has been no shortage of challenges to occupy the world’s attention. A global pandemic, supply chain disruptions, and a war in Europe have shown the power of human resilience and the importance of innovation.

 

Against this backdrop, Alphabet continues to deliver helpful services for people and partners around the world, while investing in the technologies that are foundational to the future. This remains our focus and responsibility today and in the coming years.

 

For more than six years, Alphabet has led the way in advancing the field of AI. Our AI-first strategy aims to find technology breakthroughs that will deliver significant societal benefits. That vision has motivated years of research and product work, as well as investments in the best technical talent.

 

Alphabet has long translated technical leaps into helpful products for billions of people around the world. These innovations — particularly in AI — have already improved many of the company’s core products over the past few years, and there’s more to come in the months ahead. Importantly, the company is focused on developing this technology responsibly. Alphabet was among the first to develop and adopt AI Principles and to implement an AI governance structure, which is important for the long-term development of this technology. As this work continues, the company is committed to investing responsibly for long-term growth, and to finding areas where it can operate more cost effectively.

 

Beyond that, over the past year, our Board has redoubled its efforts to engage on many of the issues most important to our company, and environmental, social and governance topics have been front and center in many of those conversations. In my role as Chair of the Alphabet Board, I have worked closely with our legal and investor relations teams to understand and respond to investor perspectives on these matters. Our Board is pleased to see Alphabet increase transparency across some of these areas; as just two examples, our recently completed civil rights audit and our disclosure of water metrics for Google-owned data centers. Our senior management team oversees this work and provides regular updates to our Board, and we actively prioritize our oversight duties and frequently engage with leaders at the company on matters of significant importance.

 

Our Board believes that a company building products for billions of people around the world benefits from a workforce with a diversity of skills, backgrounds, and cultural experiences. Our Board is no different. Today, sixty-four percent of our Board comprises directors who are female or from an underrepresented community. Our robust director selection process most recently led to the appointment of Marty Chávez in July. Marty brings years of deep experience from the worlds of finance and technology to our Board’s Audit and Compliance Committee. He joins Frances Arnold and Robin Washington as Board members who have been appointed in the past five years, and we are fortunate to have him on our Board.

 

Looking ahead, it’s an exciting time for technology, full of opportunity for our company and the broader industry. Alphabet remains among the top R&D investors in the world, and these investments have yielded glimpses of the future, from our work in quantum computing to our many AI-supported breakthroughs.

 

The importance of technology companies to our society has never been more profound, and our Board is proud of the meaningful contributions by our company in especially challenging times. As one example, in May of 2022, Google was honored with the first ever Ukrainian “Peace Prize” award introduced by President Zelenskyy for its partnership on cybersecurity and humanitarian efforts to help the people of Ukraine.

 

Since our company’s founding, we have been committed to being helpful to people around the world by building products that support a better future and by earning their trust every day. For our Board, overseeing that mission is why we exist — and we’re deeply grateful that our stockholders help make that possible.

 

Very truly yours,

 

 
  JOHN L. HENNESSY
CHAIR OF THE BOARD OF
DIRECTORS
 

 

Notice of 2023 Annual Meeting of Stockholders

 

DATE AND TIME VIRTUAL MEETING SITE
FRIDAY, JUNE 2, 2023
9:00 a.m., Pacific Time
www.virtualshareholdermeeting.com/GOOGL23
  WHO CAN VOTE
  Alphabet stockholders of Class A or Class B common stock (or their proxy holders) as of the close of business on April 4, 2023 (Record Date)

 

ITEMS OF BUSINESS AND BOARD VOTING RECOMMENDATION    
1. Election of Directors: Larry Page, Sergey Brin, Sundar Pichai, John L. Hennessy, Frances H. Arnold, R. Martin “Marty” Chávez, L. John Doerr, Roger W. Ferguson Jr., Ann Mather, K. Ram Shriram, and Robin L. Washington   FOR each of the nominees
2. Ratification of appointment of Ernst & Young LLP as Alphabet’s independent registered public accounting firm for the fiscal year ending December 31, 2023   FOR
3. Amendment and restatement of Alphabet’s Amended and Restated 2021 Stock Plan to increase the share reserve by 170,000,000 (post-stock split) shares of Class C capital stock   FOR
4. Advisory vote to approve compensation awarded to named executive officers   FOR
5. Advisory vote on the frequency of advisory votes to approve compensation awarded to named executive officers   3 YEARS
6. Stockholder proposals, if properly presented   AGAINST

 

And to consider such other business as may properly come before the Annual Meeting and any postponements or adjournments thereof.

 

  By order of the Board of Directors,      
    SUNDAR PICHAI
Chief Executive Officer
  JOHN L. HENNESSY
Chair of the Board
of Directors

 

REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:

Please refer to the enclosed proxy materials or the information forwarded by your bank, broker, or other holder of record to see which voting methods are available to you.

 

        

ONLINE

Vote your shares at www.proxyvote.com. Have your Notice, voting instruction form, or proxy card for the 16-digit control number needed to vote.

  In advance
of the Annual
Meeting
 

BY TELEPHONE

Call toll-free number 1-800-690-6903.

     

BY MAIL

Sign, date, and return your proxy card in the enclosed envelope.

  During the
Annual
Meeting
 

ONLINE

See page 111 for details on voting your shares during the Annual Meeting through www.virtualshareholdermeeting.com/GOOGL23.

 

This Notice of 2023 Annual Meeting of Stockholders, proxy statement, and form of proxy card are being distributed and made available on or about April 21, 2023.
 
This proxy statement includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our environmental, social, and governance goals (ESG), commitments, and strategies and our executive compensation program. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in our most recently filed periodic report on Form 10-K. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, which speak as of the respective date of this proxy statement, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
 
In this proxy statement, the words “Alphabet,” the “company,” “we,” “our,” “ours,” “us,” and similar terms refer to Alphabet Inc. and its consolidated subsidiaries, unless the context indicates otherwise, and the word “Google” refers to Google LLC, a wholly owned subsidiary of Alphabet.

 

ALPHABET ● 2023 PROXY STATEMENT        5

 
 
 

 

IMPORTANT NOTICE REGARDING
INTERNET AVAILABILITY OF PROXY
MATERIALS

 

This proxy statement and our 2022 Annual Report to Stockholders, which includes our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, are available at https://abc.xyz/investor/other/annual-meeting/.

 

ALPHABET ● 2023 PROXY STATEMENT        6

 
 
 

 

INCORPORATION BY REFERENCE

 

To the extent that this proxy statement has been or will be specifically incorporated by reference into any other filing of Alphabet under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (Exchange Act), the sections of this proxy statement titled “Report of the Audit and Compliance Committee of the Board of Directors” (to the extent permitted by the rules of the U.S. Securities and Exchange Commission (SEC)), “Executive Compensation—Leadership Development, Inclusion and Compensation Committee Report” and “Executive Compensation—Alphabet Pay vs. Performance” shall not be deemed to be so incorporated, unless specifically stated otherwise in such filing.

 

This proxy statement includes references to websites, website addresses, and additional materials, including reports and blogs, found on those websites. The content of any websites and materials named, hyperlinked, or otherwise referenced in this proxy statement are not incorporated by reference into this proxy statement on Schedule 14A or in any other report or document we file with the SEC, and any references to such websites and materials are intended to be inactive textual references only.

 

ALPHABET  2023 PROXY STATEMENT        7

 

 

2023 PROXY STATEMENT SUMMARY AND HIGHLIGHTS

 

THIS SECTION HIGHLIGHTS SELECTED INFORMATION AND DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER BEFORE VOTING. YOU SHOULD READ THE ENTIRE PROXY STATEMENT CAREFULLY BEFORE VOTING.

 

2022 BUSINESS HIGHLIGHTS

 

In 2022 we continued to provide helpful products and services for our users and partners while investing in priority areas like artificial intelligence. We positioned ourselves for sustained leadership in developing and innovating in AI to power our products and better serve our diverse customers across our platforms. In a challenging macroeconomic and operating environment, we renewed our focus on investing with discipline, including prioritization of our product investments across Google and Other Bets, and defining areas where we can operate more cost effectively.

 

The graphs below match our Class A and Class C’s cumulative 5-year total stockholder returns on common stock and capital stock, respectively, with the cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet Composite index. The graphs track the performance of a $100 investment in our common stock and capital stock, respectively, and in each index (with the reinvestment of all dividends) from December 31, 2017 to December 31, 2022. The returns shown are based on historical results and are not intended to suggest future performance.

 

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
ALPHABET INC. CLASS A COMMON STOCK
Among Alphabet Inc., the S&P 500 Index,
the NASDAQ Composite Index and the RDG Internet Composite Index

 

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
ALPHABET INC. CLASS C CAPITAL STOCK
Among Alphabet Inc., the S&P 500 Index,
the NASDAQ Composite Index and the RDG Internet Composite Index

 

*$100 invested on December 31, 2017 in stock or index, including reinvestment of dividends.

Copyright© 2023 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.

 

ALPHABET  2023 PROXY STATEMENT        8

 

ALPHABET’S BOARD OF DIRECTORS

 

Our Board believes that having a mix of directors with complementary qualifications, expertise, experience, backgrounds, and attributes is essential to meeting its multifaceted oversight responsibilities, representing the best interests of our stockholders, and providing practical insights and diverse perspectives.

 

 

Our Director Nominees

 

ALPHABET  2023 PROXY STATEMENT        9

 

The following table provides summary information about each director nominee as of April 4, 2023.

 

        Director
Since
      Membership on
Standing Committees
  Other Public
Boards(1)
Name   Age     Independent   ACC   LDICC   NCGC   EC    
Larry Page
Co-Founder
  50   1998                     0
Sergey Brin
Co-Founder
  49   1998                     0
Sundar Pichai
Chief Executive Officer, Alphabet and Google
  50   2017                       0
John L. Hennessy (Chair)
Former President of Stanford University
  70   2004                       0
Frances H. Arnold
Linus Pauling Professor of Chemical Engineering, Bioengineering and Biochemistry at California Institute of Technology
  66   2019                       1
R. Martin “Marty” Chávez
Partner and Vice Chairman of Sixth Street Partners
  59   2022                       1
L. John Doerr
General Partner and Chairman of Kleiner Perkins
  71   1999                       2
Roger W. Ferguson Jr.
Former President and Chief Executive Officer of TIAA
  71   2016                       2
Ann Mather
Former Executive Vice President and Chief Financial Officer of Pixar
  62   2005                        3
K. Ram Shriram
Managing Partner of Sherpalo Ventures
  66   1998                       0
Robin L. Washington
Former Executive Vice President and Chief Financial Officer of Gilead Sciences
  60   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) Alphabet’s Corporate Governance Guidelines provide that the maximum number of public company boards our directors can serve on is four, including membership on the Alphabet Board. All nominees are in compliance with this policy.

 

ALPHABET  2023 PROXY STATEMENT        10

 

CORPORATE GOVERNANCE HIGHLIGHTS

 

Our corporate governance structure is designed to promote long-term stockholder value creation through the leadership and oversight provided by our thoughtfully and effectively composed Board. Our Board is committed to maintaining alignment with stockholder interests through our strong governance practices and by seeking and incorporating stockholder feedback that informs key areas of focus for our Board and the company each year.

 

Board Leadership and Composition   
 
Board and Committee Practices   
 
Stockholder Alignment   

Independent Chair of the Board, separate from CEO role

100% independent key committees (ACC, LDICC, NCGC) and committee chairs

Review of each committee chair at least every three years

Board membership criteria established by the Board with consideration of potential director nominee’s integrity, strength of character, judgment, business experience, specific areas of expertise and knowledge of the industries in which the company operates, ability to devote sufficient time to attendance at and preparation for Board meetings, factors relating to Board composition, and principles of diversity

Diverse Board in terms of race, ethnicity, gender, age, education, skills, cultural background, professional experiences, and tenure

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

 

Annual Board and committee evaluations

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

Director overboarding policy, which provides that the maximum number of public company boards directors can serve on is four (including Alphabet Board)

Director orientation and continuing education programs

Committee meetings open to all directors

 

Annual election for all directors

Majority voting standard for election of directors

Removal of directors with or without cause

Minimum stock ownership guidelines for both executive officers and directors

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

Board oversight and evaluation of stockholder proposals submitted for consideration at the annual meeting of stockholders

Commitment for the Board to represent the balanced, best interests of the stockholders as a whole rather than special interest groups or constituencies

 

For more detailed information on Alphabet’s corporate governance and risk oversight framework, see “Directors, Executive Officers, and Corporate Governance—Corporate Governance and Board Matters” beginning on page 29.

 

Engagement

 

We proactively engage with our stockholders and other stakeholders throughout the year on a broad range of topics that are of interest and priority to the company and our stockholders. These include business strategy and performance, and ESG topics such as environmental sustainability, human capital, workforce diversity, executive compensation, and Board leadership and composition.

 

Our engagement enables us to better understand our stockholders’ priorities and perspectives, gives us an opportunity to elaborate on our initiatives, policies, and practices, and fosters open and constructive dialogue. We share the feedback from these conversations with our Board, which considers these perspectives as part of its evaluation and review of our practices, including those on governance, compensation, stockholder proposals, and ESG matters.

 

ALPHABET  2023 PROXY STATEMENT        11

 

ENVIRONMENTAL & SOCIAL HIGHLIGHTS

 

At Alphabet, we aim to build technology to help improve the lives of as many people as possible. In pursuing this goal, we develop products and services that we believe have a positive impact on the world and further the long-term interests of our business, stockholders, and stakeholders.

 

Our Board and its committees provide oversight of environmental and social matters that are important to both our company and stakeholders. At the committee level, oversight of specific environmental and social topics is assigned to the relevant committees, including:

 

Our Audit and Compliance Committee has the primary responsibility for oversight of risks associated with, among other matters, data privacy and security, competition, compliance, civil and human rights, and sustainability.
Our Leadership Development, Inclusion and Compensation Committee oversees human capital management, including diversity and inclusion and fostering a strong corporate culture.

 

2022 Highlights

 

The scale and breadth of our products, services, and operations provide us both an opportunity and a responsibility to manage our company in an environmentally and socially responsible way. We are steadfast in our commitment to advancing environmental and social goals, and are focused on evolving our disclosures to align with the expectations of stockholders and other stakeholders.

 

Below are some key highlights from our 2022 progress:

 

  Environmental
Sustainability
 

Submitted formal commitment to the Science Based Targets initiative (SBTi) to seek validation of our absolute emissions reduction target

Published annual water metrics for our U.S. data center locations and committed to sharing annual water metrics for additional global locations in our 2023 environmental report

  Diversity, Equity
and Inclusion
 

Conducted and released a voluntary civil rights audit of our policies, practices, and products. This audit was conducted by Debo P. Adegbile, Chair of WilmerHale’s Anti-Discrimination Practice, and it identifies significant strengths, as well as opportunities to further advance civil rights, equity, and inclusion

  Human Rights  

Established company-wide approach to ongoing human rights due diligence. Our approach applies a strategic and cross-product methodology for assessing human rights impacts, addressing the findings, and tracking progress

         
  Responsible AI  

Published our 2022 AI principles progress update and a whitepaper outlining why we focus on AI (and to what end)

 

Our Approach

 

Below we describe certain environmental and social topics that we believe are of interest to many of our stockholders and broader stakeholders, and that are important to driving value over the long-term.

 

Environmental Sustainability: We care deeply about sustainability, and we strive to build it into everything we do. Oversight of environmental sustainability primarily resides with our Audit and Compliance Committee, which reviews and discusses with management our risk exposures, including those related to environmental sustainability. We know that environmental sustainability begins with our own footprint. But no company, no matter how ambitious, can solve a challenge as big as climate change alone. One of the most powerful things we can do is build technology that allows us, our partners, and individuals around the world to take meaningful action. Highlights of our key achievements and ambitions include:

 

We have matched 100% of our annual electricity use with renewable energy since 2017.
We have set a goal to achieve net-zero emissions across our operations and value chain, and to operate on carbon-free energy by 2030.
We are working hard to make our data centers some of the most efficient in the world by designing, building, and operating each one to maximize efficient use of energy, water, and materials.

 

We track and provide transparent information and data on our environmental sustainability initiatives. Please see our Sustainability website and our annual environmental report for more information on our actions and progress.

 

ALPHABET  2023 PROXY STATEMENT        12

 

Diversity, Equity, and Inclusion (DEI): Building a world where progress, equitable outcomes, diversity, and inclusion can be realities is at the heart of what we do — from how we build our products to how we build our workforce. We have deepened our efforts to drive meaningful change and we also know there is more to be done. We have a responsibility to continue scaling our DEI initiatives, to ensure a workforce that is more representative of our users, a workplace that creates a sense of belonging for everyone, and to increase pathways to tech in the communities we call home.

 

Most recently, we conducted and released a voluntary civil rights audit of our policies, practices, and products. This audit was conducted by Debo P. Adegbile, Chair of WilmerHale’s Anti-Discrimination Practice, and it identified significant strengths, as well as opportunities to further advance civil rights, equity, and inclusion.

 

We report on our commitments, initiatives, and progress through our Diversity Annual Report and also share publicly our Equal Employment Opportunity Report (EEO-1). Please see our Belonging and Human Rights websites for more information.

 

Content Governance, Data Privacy, and Data Security: Ensuring proper use of our platforms and protecting the data privacy and security of our users is fundamental to maintaining our users’ trust and to ensuring our long-term business success. Our Audit and Compliance Committee has specific oversight of data privacy and security matters.

 

We are committed to promoting transparency across our platforms and provide detailed reporting at the company level and, where applicable, individual business level regarding our policies, programs, and performance including:

 

Our Transparency Report, which shares data on how we handle content that violates our policies, as well as how we handle government requests for removal of content.
Our Ads Safety Report, where we explain how we are using evolving policies and better technology to find and remove policy-violating ads.
Our YouTube enforcement report, which we release on a quarterly basis, includes information on channel removals, removal of comments, the policy reasons for removals, and data on appeals.
We also regularly share blog posts with information on a broad range of issues, including how we combat misinformation and disinformation on our platforms and partner with external organizations to drive industry-wide efforts.

 

Please see our Google Transparency Report website for more information.

 

Public Policy and Lobbying: Our engagement with policymakers and regulators is guided by a commitment to ensuring our participation is always open, transparent, and clear to our users, stockholders, and the public. Our Nominating and Corporate Governance Committee and senior management review our corporate political policies and activities to ensure appropriate policies and practices are in place and serving the interest of stockholders.

 

Our lobbying, trade association, and political engagement policies and disclosures are the result of careful ongoing consideration and analysis by our management. Our U.S. Public Policy Transparency website provides robust and regularly updated disclosures on our public policy and lobbying activities, trade association participation, and other key elements of our approach to policy engagement.

 

Human Rights: At Alphabet, we are guided by internationally recognized human rights standards. We have a longstanding commitment to respecting the rights enshrined in the Universal Declaration of Human Rights and its implementing treaties, as well as to upholding the standards established in the United Nations Guiding Principles on Business and Human Rights and in the Global Network Initiative Principles.

 

Under the umbrella of our Human Rights Program, our senior management, including our Global Head of Human Rights, oversees the implementation of our civil rights and human rights work and provides relevant updates to our Audit and Compliance Committee. Through our Human Rights Program, we have developed a deeper understanding of both the opportunities and potential risks associated with technology by advising product teams on potential civil and human rights impacts, conducting human rights due diligence, and engaging external experts and stakeholders on these issues.

 

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

 

Responsible AI: As an information and computer science company, we aim to and have been at the forefront of advancing the frontier of AI through our path-breaking and field-defining research to develop more capable and useful AI. From this research and development, we are bringing breakthrough innovations into the real world to assist people and benefit society everywhere through our infrastructure, tools, products and services, as well as through enabling and working with others to benefit society.

 

We understand that AI, as a still-emerging technology, poses various and evolving complexities and risks. Our development and use of AI must address these risks. That is why we consider it an imperative to pursue AI responsibly. In 2018, we were one of the first companies to commit to AI Principles that put beneficial use, users, safety, and avoidance of harms above business considerations, and we have pioneered many best practices. We are committed to leading and setting the standard in developing and shipping useful and beneficial applications, applying ethical principles grounded in human values, and evolving our approaches as we learn from research, experience, users, and the wider community.

 

We provide more information on our AI approach, responsibilities, and principles on our Google AI website

 

ALPHABET  2023 PROXY STATEMENT        13

 

Reporting and Transparency

 

In addition to the extensive reporting and transparency we provide on the topics discussed above, we are focused on evolving our ESG disclosures to align with best practices and stockholder and stakeholder expectations. We maintain an ESG Index which maps our public disclosures to the Sustainable Accounting Standards Board (SASB) and to the Task Force on Climate-Related Financial Disclosures (TCFD) frameworks. We are on a continuous journey to advance our ESG initiatives and reporting, and will continue to evaluate and enhance our ESG disclosures as we make progress.

 

ALPHABET  2023 PROXY STATEMENT        14

 

EXECUTIVE COMPENSATION HIGHLIGHTS

 

We design our executive officer compensation programs to attract and retain the world’s best talent, support Alphabet’s culture of innovation and performance, and align employee and stockholder interests.

 

 

Sound
Program Design   
 
Pay for Performance   
 
Best Practices in Executive
Compensation                        

Competitive total pay opportunity to attract, retain, and motivate leaders

Primarily equity-based compensation with payout aligned to long-term company performance

Multi-year vesting of stock awards

Discourage unnecessary and excessive risk taking

ESG bonus for members of Alphabet’s senior executive team

 

Performance stock awards with payout based on long-term company performance

Performance stock awards include total shareholder return modifier to reward significant positive outperformance of Alphabet relative to the companies comprising the S&P 100 for the applicable performance period

 

 

No change in control benefits

Prohibition of pledging and hedging ownership of Alphabet stock by executive officers, directors, and employees

No executive-only benefit plans or retirement programs

No excessive perquisites beyond those considered a business necessity

 

For more detailed information on Alphabet’s executive compensation philosophy and practices, see “Compensation Discussion and Analysis” beginning on page 46.

 

ALPHABET  2023 PROXY STATEMENT        15

 

ANNUAL MEETING OF STOCKHOLDERS

 

   

Time and Date:

9:00 a.m., Pacific Time, on
Friday, June 2, 2023

 

Virtual Meeting Access:

Alphabet stockholders (or their proxy holders)
can participate in and vote at our Annual
Meeting by visiting
www.virtualshareholdermeeting.com/
GOOGL23

and entering the 16-digit control number
included in the Notice, voting instruction
form, or proxy card.
All others may view the Annual Meeting
through our Investor Relations YouTube
channel at www.youtube.com/c/AlphabetIR.

 

Record Date:

April 4, 2023

 

Voting: Holders of Class A or Class B common stock as of the Record Date are entitled to vote. Each share of Class A common stock is entitled to one (1) vote with respect to each director nominee and one (1) vote with respect to each of the proposals to be voted on. Each share of Class B common stock is entitled to ten (10) votes with respect to each director nominee and ten (10) votes with respect to each of the proposals to be voted on. The holders of the shares of Class A common stock and Class B common stock are voting as a single class on all matters. Holders of Class C capital stock have no voting power as to any items of business that will be voted on at the Annual Meeting.

 

Participating in the Annual Meeting: We have adopted a virtual format for our Annual Meeting to make participation accessible for stockholders from any geographic location with internet connectivity. We have worked to offer the same participation opportunities as were provided at our past meetings held in-person while further enhancing the online experience available to all stockholders regardless of their location.

 

You are entitled to participate in the Annual Meeting if you were a holder of Class A or Class B common stock as of the close of business on the Record Date or hold a valid proxy for the Annual Meeting. To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/GOOGL23, you must enter the 16-digit control number found in the box marked by the arrow for postal mail recipients of the Notice, voting instruction form, or the proxy card, or within the body of the email for electronic delivery recipients.

 

We encourage you to access the Annual Meeting before it begins. Online check-in will start approximately 30 minutes before the Annual Meeting on June 2, 2023. If you have difficulty accessing the meeting, please call 1-844-986-0822 (toll free) or 1-303-562-9302 (international). We will have technicians available to assist you.

 

We will also make the Annual Meeting viewable to anyone interested through our Investor Relations YouTube channel at www.youtube.com/c/AlphabetIR.

 

 

               
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 111
for details on voting your shares during the Annual Meeting through www.virtualshareholdermeeting.com/GOOGL23.
             
Call toll-free number 1-800-690-6903.          
             
Sign, date, and return the enclosed proxy card or voting instruction form.          

 

ALPHABET  2023 PROXY STATEMENT        16

 

VOTING MATTERS AND VOTE RECOMMENDATIONS

 

Proposal   Alphabet
Board Voting
Recommendation
  Rationale
MANAGEMENT PROPOSALS:        
(1) Election of eleven directors (page 64)   FOR each nominee  

●  Slate of highly qualified director nominees with broad and diverse backgrounds, experiences, and skill sets aligned to Alphabet’s unique and evolving business

(2) Ratification of the appointment of Ernst & Young LLP as Alphabet’s independent registered public accounting firm for the fiscal year ending December 31, 2023 (page 65)   FOR  

●  Ernst & Young LLP is an independent accounting firm with the breadth of expertise and knowledge necessary to effectively audit Alphabet’s financial statements

●  All audit and non-audit services provided by Ernst & Young LLP are pre-approved by our Audit and Compliance Committee

(3) Approval of the amendment and restatement of Alphabet’s Amended and Restated 2021 Stock Plan to increase the share reserve by 170,000,000 (post stock split) shares of Class C capital stock (page 66)   FOR   ●  Equity awards granted under Alphabet’s Amended and Restated 2021 Stock Plan are vital to our ability to attract and retain outstanding and highly skilled employees
(4) Advisory vote to approve compensation awarded to named executive officers (page 71)   FOR  

●  Our compensation program reflects our philosophy to pay all our employees, including our named executive officers, in ways to (1) attract and retain the world’s best talent; (2) support our culture of innovation and performance; and (3) align employee and stockholder interests

●  The proportion of overall pay tied to performance is higher for employees at more senior levels in the organization, including our named executive officers, reflecting their opportunity to have more impact on company performance

(5) Advisory vote on the frequency of advisory votes to approve compensation awarded to named executive officers (page 72)   3 YEARS   ●  A triennial voting frequency is aligned with our long-term compensation philosophy, and provides our stockholders with an appropriate time horizon over which to evaluate the efficacy of our compensation program and policies in achieving long-term business results
STOCKHOLDER PROPOSALS:        
(6) Stockholder proposal regarding a lobbying report (page 76)   AGAINST  

●  We already publish extensive lobbying disclosures, which address much of the information requested in the proposal

●  Our lobbying transparency efforts have been recognized as best in class

●  We have robust oversight mechanisms in place including oversight by our Board and senior management team

(7) Stockholder proposal regarding a congruency report (page 78)   AGAINST  

●  We seek to advance the best interests of the company and our stockholders in partnering with various organizations

●  Our collaboration with organizations does not reflect an endorsement of their entire agendas

(8) Stockholder proposal regarding a climate lobbying report (page 80)   AGAINST  

●  We already publish extensive lobbying disclosures including on climate-related topics

●  We assess alignment of our trade association participation with the goals of the Paris Agreement

●  We engage with our trade associations to encourage alignment between our core public policy objectives and their policy advocacy activities, including on climate change

 

ALPHABET  2023 PROXY STATEMENT        17

 
Proposal   Alphabet
Board Voting
Recommendation
  Rationale
(9) Stockholder proposal regarding a report on reproductive rights and data privacy (page 83)   AGAINST  

●  We have policies and procedures for evaluating and responding to requests for user information, and routinely push back on overbroad or otherwise inappropriate demands

●  We provide robust privacy controls and practice data minimization for users, and are committed to improving our privacy protections when appropriate, especially around health-related topics

(10) Stockholder proposal regarding a human rights assessment of data center siting (page 86)   AGAINST  

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

●  Our human rights governance and management structure provides effective oversight of key human rights risks and mitigation strategies

(11) Stockholder proposal regarding a human rights assessment of targeted ad policies and practices (page 89)   AGAINST  

●  Our existing policies are designed to safeguard user privacy and work in tandem with our human rights governance and management structure

●  Through our Privacy Sandbox commitments, we collaborate with regulators and others across the digital advertising ecosystem to improve privacy and test new methodologies

●  We have already updated our Privacy Sandbox initiative to address concerns similar to those raised in this proposal

(12) Stockholder proposal regarding algorithm disclosures (page 92)   AGAINST  

●  We already disclose significant information about our advertising and search policies and procedures and our transparency efforts are informed by multiple frameworks

●  Disclosure of additional details on proprietary algorithmic systems could be used to compromise our operations and the quality of our services

(13) Stockholder proposal regarding a report on alignment of YouTube policies with legislation (page 95)   AGAINST  

●  We already provide significant information about YouTube’s policies and procedures to further our commitment to online safety and have intensified our regulatory readiness initiatives under appropriate senior management and Board oversight

●  We have published a number of substantive disclosures to meet rigorous reporting requirements, and we are transparent about our compliance efforts

 

ALPHABET  2023 PROXY STATEMENT        18

 
Proposal   Alphabet
Board Voting
Recommendation
  Rationale
(14) Stockholder proposal regarding a content governance report (page 98)   AGAINST  

●  We have appropriate safeguards in place to ensure our policies are designed and enforced in ways that are free from improper bias

●  We devote substantial effort to preventing misuse of our platforms and ensuring content is appropriately provided and supported by effective oversight and transparency on enforcement actions

(15) Stockholder proposal regarding a performance review of the Audit and Compliance Committee (page 101)   AGAINST   ●  Our Board believes that our Audit and Compliance Committee has the requisite experience, skill set, and protocols to conduct the robust risk oversight sought by the proponent, and that a third-party assessment would not result in better direction or performance
(16) Stockholder proposal regarding bylaws amendment (page 103)   AGAINST   ●  We amended our Bylaws in October 2022 following SEC rule changes and careful deliberations by our Board, and the amended Bylaws largely include the advance notice provisions requested by the proponent
(17) Stockholder proposal regarding “executives to retain significant stock” (page 105)   AGAINST   ●  Our existing stock ownership guidelines and policies effectively align senior management and stockholder interests, and our executive compensation programs reinforce this alignment
(18) Stockholder proposal regarding equal shareholder voting (page 107)   AGAINST   ●  Our strong governance practices and current capital structure have provided significant long-term stability to the company and have proven beneficial to stockholders through the delivery of exceptional returns over the life of the company

 

ALPHABET  2023 PROXY STATEMENT        19

 

Table of Contents

 

PROXY SUMMARY AND HIGHLIGHTS 8
1 CORPORATE GOVERNANCE DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE 22
DIRECTORS AND EXECUTIVE OFFICERS 22
CORPORATE GOVERNANCE AND BOARD MATTERS 29
Board Meetings 29
Board Leadership Structure 29
Board Committees 29
Director Independence 34
Compensation Committee Interlocks and Insider Participation 34
Consideration of Director Nominees 34
Director Service on Outside Boards and Other Commitments 35
Management Succession Planning 35
Board’s Role in Risk Oversight 36
Executive Sessions 36
Outside Advisors 36
Board Effectiveness, Board Annual Self-Assessment, Board Education 37
Engagement 37
Communications with our Board 38
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 39
DELINQUENT SECTION 16(A) REPORTS 40
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 41
RELATED PARTY TRANSACTIONS POLICY AND PROCEDURE 41
RELATED PARTY TRANSACTIONS 42
2 DIRECTOR AND EXECUTIVE COMPENSATION DIRECTOR COMPENSATION 44
BOARD COMPENSATION ARRANGEMENTS FOR NON-EMPLOYEE DIRECTORS 44
DIRECTOR COMPENSATION FOR 2022 45
EXECUTIVE COMPENSATION 46
COMPENSATION DISCUSSION AND ANALYSIS 46
Overview 46
Section 1–Executive Summary 47
Section 2–Determining Competitive Levels of Pay 47
Section 3–Elements of Pay and Fiscal Year 2022 Pay Decisions 47
Section 4–Other Compensation Information 51
LEADERSHIP DEVELOPMENT, INCLUSION AND COMPENSATION COMMITTEE REPORT 52
2022 SUMMARY COMPENSATION TABLE 53
GRANTS OF PLAN-BASED AWARDS IN 2022 54
DESCRIPTION OF PLAN-BASED AWARDS 54
OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR-END 55
OPTIONS EXERCISED AND STOCK VESTED IN FISCAL 2022 56
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL 56
ALPHABET CEO PAY RATIO 57
ALPHABET PAY VS. PERFORMANCE 58
EQUITY COMPENSATION PLAN INFORMATION 60

 

ALPHABET  2023 PROXY STATEMENT        20

 

3 AUDIT MATTERS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 61
PRINCIPAL ACCOUNTANT FEES AND SERVICES 61
AUDITOR INDEPENDENCE 61
PRE-APPROVAL POLICIES AND PROCEDURES 62
REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE OF THE BOARD OF DIRECTORS 63
4 MANAGEMENT AND STOCKHOLDER PROPOSALS MANAGEMENT PROPOSALS TO BE VOTED ON 64
PROPOSAL NUMBER 1 – ELECTION OF DIRECTORS 64
PROPOSAL NUMBER 2 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 65
PROPOSAL NUMBER 3 – APPROVAL OF THE AMENDMENT AND RESTATEMENT OF ALPHABET INC. AMENDED AND RESTATED 2021 STOCK PLAN 66
PROPOSAL NUMBER 4 – ADVISORY VOTE TO APPROVE COMPENSATION AWARDED TO NAMED EXECUTIVE OFFICERS 71
PROPOSAL NUMBER 5 – ADVISORY VOTE ON THE FREQUENCY OF ADVISORY VOTES TO APPROVE COMPENSATION AWARDED TO NAMED EXECUTIVE OFFICERS 72
STOCKHOLDER PROPOSALS 73
PROPOSAL NUMBER 6 – STOCKHOLDER PROPOSAL REGARDING A LOBBYING REPORT 76
PROPOSAL NUMBER 7 – STOCKHOLDER PROPOSAL REGARDING A CONGRUENCY REPORT 78
PROPOSAL NUMBER 8 – STOCKHOLDER PROPOSAL REGARDING A CLIMATE LOBBYING REPORT 80
PROPOSAL NUMBER 9 – STOCKHOLDER PROPOSAL REGARDING A REPORT ON REPRODUCTIVE RIGHTS AND DATA PRIVACY 83
PROPOSAL NUMBER 10 – STOCKHOLDER PROPOSAL REGARDING A HUMAN RIGHTS ASSESSMENT OF DATA CENTER SITING 86
PROPOSAL NUMBER 11 – STOCKHOLDER PROPOSAL REGARDING A HUMAN RIGHTS ASSESSMENT OF TARGETED AD POLICIES AND PRACTICES 89
PROPOSAL NUMBER 12 – STOCKHOLDER PROPOSAL REGARDING ALGORITHM DISCLOSURES 92
PROPOSAL NUMBER 13 – STOCKHOLDER PROPOSAL REGARDING A REPORT ON ALIGNMENT OF YOUTUBE POLICIES WITH LEGISLATION 95
PROPOSAL NUMBER 14 –STOCKHOLDER PROPOSAL REGARDING A CONTENT GOVERNANCE REPORT 98
PROPOSAL NUMBER 15 –STOCKHOLDER PROPOSAL REGARDING A PERFORMANCE REVIEW OF AUDIT AND COMPLIANCE COMMITTEE 101
PROPOSAL NUMBER 16 –STOCKHOLDER PROPOSAL REGARDING BYLAWS AMENDMENT 103
PROPOSAL NUMBER 17 –STOCKHOLDER PROPOSAL REGARDING “EXECUTIVES TO RETAIN SIGNIFICANT STOCK” 105
PROPOSAL NUMBER 18 –STOCKHOLDER PROPOSAL REGARDING EQUAL SHAREHOLDER VOTING 107
5 QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING 109
PROXY MATERIALS 109
VOTING INFORMATION 110
PARTICIPATING IN THE ANNUAL MEETING 113
STOCKHOLDER PROPOSALS, DIRECTOR NOMINATIONS, AND RELATED BYLAW PROVISIONS 114

6

APPENDICES APPENDIX A
ALPHABET INC. AMENDED AND RESTATED 2021 STOCK PLAN
A-1
INFORMATION CONCERNING ALPHABET’S ANNUAL MEETING OF STOCKHOLDERS A-9

 

ALPHABET  2023 PROXY STATEMENT        21

 
Back to contents 
 

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

 

— DIRECTORS AND EXECUTIVE OFFICERS

 

Our Board of Directors (our Board) is composed of highly experienced and diverse directors who have led, advised, and established leading global organizations and institutions. Our Board has taken a thoughtful approach to board composition to ensure that our directors have backgrounds that collectively add significant value to the strategic decisions made by the company and that enable them to provide oversight of management to ensure accountability to our stockholders. Our Board has endeavored to strike the right balance between long-term understanding of our business and fresh external perspectives, adding five new directors in the past seven years, as well as ensuring the diversity of backgrounds and perspectives within the boardroom.

 

Our directors have extensive backgrounds as entrepreneurs, technologists, operational and financial experts, academics, scientists, investors, advisors, nonprofit board members, and government leaders — all of which provide skills and expertise directly relevant to our strategic and oversight priorities. Many of the current directors have senior leadership experience at major domestic and international companies. In these positions, they have also gained experience in core management skills, such as strategic and financial planning, public company financial reporting, compliance, risk management, leadership development, and international business experience. Most of our directors also have experience serving on boards of directors and board committees of other public companies, and have an understanding of corporate governance practices and trends, different business processes, challenges, and strategies. Other directors have experience as presidents or trustees of significant academic, research, and philanthropic institutions, which brings unique perspectives in relevant disciplines and institutional leadership to our Board. Further, our directors also have other experience that makes them valuable members, such as entrepreneurial experience and experience developing technology or managing technology companies, which provides insight into strategic and operational issues we face.

 

The demographic information presented below for our directors is based on voluntary self-identification by each director. Additional biographical information of our directors and executive officers as of April 4, 2023 is set forth starting on page 23.

 

  Page Brin Pichai Hennessy Arnold Chávez Doerr Ferguson Mather Shriram Washington
Gender Identity                      
Male      
Female                
Race/Ethnicity                      
African American or Black                  
Asian                  
Hispanic                    
White          
LGBTQ+                    

 

ALPHABET  2023 PROXY STATEMENT        22

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

 

Directors

 

LARRY PAGE

Co-Founder

Director since 1998  |  Executive Committee (Chair)

Selected Membership:

  The Carl Victor Page Memorial Foundation

Larry Page, 50, one of Google’s Co-Founders, previously served as Google’s Chief Executive Officer from April 2011 to October 2015, and as Alphabet’s Chief Executive Officer from October 2015 to December 2019. From July 2001 to April 2011, Larry served as Google’s President, Products. In addition, from September 1998 to July 2001, Larry served as Google’s Chief Executive Officer, and from September 1998 to July 2002, as Google’s Chief Financial Officer. Larry holds a Bachelor of Science degree in engineering, with a concentration in computer engineering, from the University of Michigan and a Master of Science degree in computer science from Stanford University.

Select Leadership Skills and Additional Experiences:

Business leadership, operational experience, and experience developing technology as Co-Founder of Google and former Chief Executive Officer of Alphabet.

In-depth knowledge of the technology sector and experience in developing transformative business models.

 

SERGEY BRIN

Co-Founder

Director since 1998  |  Executive Committee

Selected Membership:

  The Sergey Brin Family Foundation

Sergey Brin, 49, one of Google’s Co-Founders, previously served as Google’s President from May 2011 to October 2015, and as Alphabet’s President from October 2015 to December 2019. From July 2001 to April 2011, Sergey served as Google’s President, Technology and Co-Founder. In addition, from September 1998 to July 2001, Sergey served as Google’s President and Chairman of Google’s Board of Directors. Sergey holds a Bachelor of Science degree with high honors in mathematics and computer science from the University of Maryland at College Park and a Master of Science degree in computer science from Stanford University.

Select Leadership Skills and Additional Experiences:

Business leadership, operational experience, and experience developing technology as Co-Founder of Google and former President of Alphabet.

In-depth knowledge of the technology sector and experience in developing transformative business models.

 

SUNDAR PICHAI

Chief Executive Officer, Alphabet and Google

Director since 2017  |  Executive Committee

Selected Membership:

  The Pichai Family Foundation

Sundar Pichai, 50, has been the Chief Executive Officer of Alphabet since December 2019 and of Google since October 2015. Since joining Google in 2004, Sundar has led product and engineering for Google’s products and platforms, including Search, Chrome, Maps, Android, Gmail, and Google Apps (now Google Workspace). Sundar served as Google’s Senior Vice President of Products from October 2014 to October 2015, and as Google’s Senior Vice President of Android, Chrome and Apps from March 2013 to October 2014. As CEO, he has shifted the company’s strategy to focus on AI, which is now powering advances in the company’s founding product, Search, as well as other helpful products for people around the world. Sundar holds a Bachelor of Technology degree from the Indian Institute of Technology Kharagpur, a Master of Science degree from Stanford University, and a Master of Business Administration degree from The Wharton School of the University of Pennsylvania.

Select Leadership Skills and Additional Experiences:

Business leadership, operational experience, and experience developing technology as Chief Executive Officer of Alphabet and Google.

In-depth knowledge of the technology sector, and experience in developing Alphabet and Google’s products and services and leading the company’s strategic vision, management, and operations.

 

ALPHABET  2023 PROXY STATEMENT        23

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

 

JOHN L. HENNESSY

Chair of the Board

Independent Director since 2004  |  Nominating and Corporate Governance Committee (Chair)

Selected Memberships and Private Directorships:

  Board of Trustees, Gordon and Betty Moore Foundation

  Board of Directors, Chan Zuckerberg Biohub

  Trustee, Queen Elizabeth Prize for Engineering Foundation

Former Public Company Directorship in the Past Five Years:

  Cisco Systems, Inc

John L. Hennessy, 70, has served as Chair of our Board since January 2018. John previously served as our Lead Independent Director from April 2007 to January 2018. John is the James F. and Mary Lynn Gibbons Professor of Computer Science and Electrical Engineering in the Stanford School of Engineering, and the Shriram Family Director of Stanford’s Knight-Hennessy Scholars, a graduate-level scholarship program. John served as the President of Stanford University from September 2000 to August 2016. From 1994 to August 2000, John held various positions at Stanford, including Dean of the Stanford University School of Engineering and Chair of the Stanford University Department of Computer Science. John holds a Bachelor of Science degree in electrical engineering from Villanova University and a Master of Science degree and a Doctoral degree in computer science from the State University of New York, Stony Brook.

Select Leadership Skills and Additional Experiences:

Leadership and management experience as a former president of a world-renowned university.

Experience developing technology businesses as founder of MIPS Technologies, Inc. and chief architect of Silicon Graphics Computer Systems, Inc.

Global business perspective from his service on other boards.

 

FRANCES H. ARNOLD

Independent Director since 2019  |  Nominating and Corporate Governance Committee

Other Public Company Directorship:

  Illumina, Inc.

Selected Memberships:

  Co-Chair, President’s Council of Advisors on Science and Technology

  Member, U.S. National Academies of Science, Medicine, and Engineering

  Member, The American Academy of Arts and Sciences

Frances H. Arnold, 66, manages a research group, is the Linus Pauling Professor of Chemical Engineering, Bioengineering and Biochemistry, and is the Director of the Donna and Benjamin M. Rosen Bioengineering Center, all at the California Institute of Technology. She joined the California Institute of Technology in 1986 and has served as a Visiting Associate, Assistant Professor, Professor, and Director. Frances’s laboratory focuses on protein engineering by directed evolution, with applications in alternative energy, chemicals, and medicine. Frances is the recipient of numerous honors, including the Nobel Prize in Chemistry, the Millennium Technology Prize, induction into the National Inventors Hall of Fame, Fellow of the National Academy of Inventors, the ENI Prize in Renewable and Nonconventional Energy, the U.S. National Medal of Technology and Innovation, and the Charles Stark Draper Prize of the U.S. National Academy of Engineering. Frances holds a Bachelor of Science degree in mechanical and aerospace engineering from Princeton University and a Doctoral degree in chemical engineering from the University of California, Berkeley.

Select Leadership Skills and Additional Experiences:

Leadership and management experience managing a research group at the California Institute of Technology and co-chair of the President’s Council of Advisors on Science and Technology.

Recipient of the 2018 Nobel Prize for Chemistry for her work on directed evolution of enzymes.

Global business perspective from her service on other boards.

 

R. MARTIN “MARTY” CHÁVEZ

Independent Director since 2022  |  Audit and Compliance Committee

Other Public Company Directorship:

  Recursion Pharmaceuticals, Inc.

Selected Memberships:

  Board of Fellows, Stanford Medicine Board

  Board of Directors, The Broad Institute of MIT

Former Public Company Directorship in the Past Five Years:

  Banco Santander, S.A.

R. Martin “Marty” Chávez, 59, has been a Partner and Vice Chairman of Sixth Street, a global asset manager, since May 2021. From January 2005 to December 2019, he served in a number of executive positions at Goldman Sachs, including Chief Information Officer, Chief Financial Officer, and global co-head of the firm’s Securities Division, and was a partner and a member of Goldman Sachs’ management committee. Previously, Marty was a Chief Executive Officer and co-founder of Kiodex, which was acquired by Sungard in 2004, and Chief Technology Officer and co-founder of Quorum Software Systems. Marty holds a Bachelor of Arts degree in biochemical sciences and a Master of Science degree in computer science from Harvard University, and a Doctoral degree in medical information sciences from Stanford University.

Select Leadership Skills and Additional Experiences:

Extensive financial and management expertise and global business leadership as Partner and Vice Chairman of Sixth Street and former Chief Financial Officer of Goldman Sachs.

In-depth knowledge of the technology sector.

Global business perspective from his service on other boards.

 

ALPHABET  2023 PROXY STATEMENT        24

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

 

L. JOHN DOERR

Independent Director since 1999  |  Leadership Development, Inclusion and Compensation Committee

Other Public Company Directorships:

  Amyris, Inc.

  DoorDash, Inc.

Selected Memberships:

  Board of Trustees, The Aspen Institute

  Board of Directors, Climate Imperative

Former Public Company Directorships in the Past Five Years:

  Bloom Energy Corporation

  Coursera, Inc.

  Quantumscape Corporation

  Zynga, Inc.

L. John Doerr, 71, has been a General Partner of Kleiner Perkins, a venture capital firm, since August 1980. John holds a Bachelor of Science degree in electrical engineering and a Master of Science degree in electrical engineering from Rice University, and a Master of Business Administration degree from Harvard Business School.

Select Leadership Skills and Additional Experiences:

Global business leadership and extensive financial and investment expertise as a venture capitalist.

In-depth knowledge of the technology sector and visionary in the industry.

Global business perspective from his service on other boards.

 

ROGER W. FERGUSON JR.

Independent Director since 2016  |  Audit and Compliance Committee

Other Public Company Directorships:

  Corning

  International Flavors & Fragrances, Inc.

Selected Memberships:

  Board of Regents, The Smithsonian Institution

  Member and Co-Chair of the Commission on the Future of Undergraduate Education, American Academy of Arts and Sciences

  Board of Trustees: The Conference Board; The Group of Thirty; The National September 11th Museum and Memorial

Former Public Company Directorships in the Past Five Years:

  Blend Labs, Inc.

  General Mills, Inc.

Roger W. Ferguson Jr., 71, has been the Chief Investment Officer of Red Cell Partners LLC, a venture capital firm, since August 2022. He is also the Steven A. Tananbaum distinguished fellow at the Council on Foreign Relations. Roger has served as the President and Chief Executive Officer of TIAA, a major financial services company, from April 2008 to May 2021. He joined TIAA after his tenure at Swiss Re, a global reinsurance company, where he served as Chairman of the firm’s America Holding Corporation, Head of Financial Services, and a member of the Executive Committee from 2006 to 2008. Prior to that, Roger joined the Board of Governors of the U.S. Federal Reserve System in 1997 and served as its Vice Chairman from 1999 to 2006. From 1984 to 1997, he was an associate and partner at McKinsey & Company. Roger holds a Bachelor of Arts degree in economics, a Doctoral degree in economics, and a Juris Doctor degree, all from Harvard University.

Select Leadership Skills and Additional Experiences:

Global business leadership and extensive financial, capital markets, and management expertise as former President and Chief Executive Officer of TIAA.

Extensive experience in management consulting and various policy-making roles.

Global business perspective from his service on other boards.

 

ALPHABET  2023 PROXY STATEMENT        25

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

 

ANN MATHER

Independent Director since 2005  |  Audit and Compliance Committee (Chair)

Other Public Company Directorships:

  Blend Labs, Inc.

  Bumble Inc.

  Netflix, Inc.

Selected Memberships:

  Board of Trustees, Dodge & Cox Funds

Former Public Company Directorships in the Past Five Years:

  Airbnb, Inc.

  Arista Networks, Inc.

  Glu Mobile, Inc.

  Planet Labs Inc.

  Shutterfly, Inc.

Ann Mather, 62, was Executive Vice President and Chief Financial Officer of Pixar, a computer animation film studio, from 1999 to 2004. Prior to her service at Pixar, Ann was Executive Vice President and Chief Financial Officer of Village Roadshow Pictures, the film production division of Village Roadshow Limited. Ann holds a Master of Arts degree from Cambridge University in England, is an honorary fellow of Sidney Sussex College, Cambridge, and is a chartered accountant.

Select Leadership Skills and Additional Experiences:

Deemed an “audit committee financial expert” with over 20 years of experience in finance and operations of technology companies, particularly publicly traded companies with knowledge of complex global financial and business matters.

Global business leadership and extensive financial experience as a former chief financial officer and senior finance executive of major corporations.

Global business perspective from her service on other boards.

 

K. RAM SHRIRAM

Independent Director since 1998  |  Leadership Development, Inclusion and Compensation Committee

Selected Memberships:

  Member, Council on Foreign Relations

  Board of Trustees, Stanford Health Care

  Charter Member, Indiaspora

K. Ram Shriram, 66, has been a managing partner of Sherpalo Ventures, LLC, an angel venture investment company, since January 2000. From August 1998 to September 1999, Ram served as Vice President of Business Development at Amazon.com, Inc., an internet retail company. Prior to that, Ram served as President at Junglee Corporation, a provider of database technology, which was acquired by Amazon.com in 1998. Ram was an early member of the executive team at Netscape Communications Corporation. Ram holds a Bachelor of Science degree in mathematics from the University of Madras, India.

Select Leadership Skills and Additional Experiences:

Global business leadership as former Vice President of Business Development at Amazon.com, Inc., President of Junglee Corporation, and a member of the executive team of Netscape Communications Corporation.

Extensive financial and investment expertise as a venture capitalist.

Outside board experience as a director of several private companies.

 

ROBIN L. WASHINGTON

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

Other Public Company Directorships:

  Honeywell International, Inc.

  Salesforce, Inc.

  Vertiv Holdings Co.

Selected Memberships and Private Directorships:

  President’s Council & Ross Business School Advisory Board, University of Michigan

  Board of Trustees, UCSF Benioff Children’s Hospital Oakland

  Board of Directors, Mastercard Foundation

Robin L. Washington, 60, served as the Executive Vice President and Chief Financial Officer of Gilead Sciences, Inc., a biopharmaceutical company, from May 2008 to November 2019 where she oversaw Global Finance, Facilities and Operations, Investor Relations, and the Information Technology organizations. Robin remained with Gilead in an advisory capacity from November 2019 until March 2020. From January 2006 to June 2007, Robin served as Chief Financial Officer of Hyperion Solutions Corporation, an enterprise software company. Prior to Hyperion, Robin served in a number of executive positions with PeopleSoft, Inc., a provider of enterprise application software, including as Senior Vice President and Corporate Controller along with several other senior financial roles from 1996 to 2005. Prior to PeopleSoft, Robin was Director of Finance for Tandem Computers, an Accounting Analyst for the Federal Reserve Bank of Chicago, and a Senior Auditor for Deloitte. Robin holds a Bachelor of Business Administration degree from the University of Michigan and a Master of Business Administration degree from Pepperdine University.

Select Leadership Skills and Additional Experiences:

Extensive financial and management expertise and global business leadership as former Executive Vice President and Chief Financial Officer of Gilead Sciences, Inc., Hyperion Solutions Corporation, and former executive of PeopleSoft, Inc.

In-depth knowledge of the technology sector.

Global business perspective from her service on other boards.

 

ALPHABET  2023 PROXY STATEMENT        26

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

 

Executive Officers

 

This section describes the business experience of our executive officers, other than Sundar, whose biography can be found on page 23. Our executive officers are appointed by and serve at the discretion of our Board. There are no family relationships among any of our directors or executive officers.

 

RUTH M. PORAT

Senior Vice President, Chief Financial Officer, Alphabet and Google

Public Company Directorship:

  Blackstone Inc.

Selected Memberships and Private Directorships:

  Board of Directors, Council on Foreign Relations

  Board of Trustees, Memorial Sloan Kettering Cancer Center

  Board of Directors, Stanford Management Company

Ruth M. Porat, 65, has served as Senior Vice President, Chief Financial Officer of Google since May 2015 and has held the same title at Alphabet since it was created in October 2015. Prior to joining Google, Ruth was Executive Vice President and Chief Financial Officer of Morgan Stanley from January 2010 to April 2015. From September 2003 to December 2009, she served in a number of executive positions at Morgan Stanley, including Vice Chairman of Investment Banking, Global Co-Head of Technology Investment Banking, and Global Head of the Financial Institutions Group. Ruth holds a Bachelor of Arts degree from Stanford University, a Master of Science degree from The London School of Economics, and a Master of Business Administration degree from The Wharton School of the University of Pennsylvania.

Select Leadership Skills and Additional Experiences:

Extensive financial and management expertise in the finance, investment, and technology industries.

Outside board experience and global business perspective from her service on other boards.

 

PRABHAKAR RAGHAVAN

Senior Vice President, Knowledge and Information, Google

Selected Memberships:

  Member, National Academy of Engineering

  Fellow, Association for Computing Machinery

  Fellow, Institute of Electrical and Electronic Engineers (IEEE)

Prabhakar Raghavan, 62, has served as Senior Vice President of Google since November 2018. He is responsible for Google Search, Assistant, Geo, Ads, Commerce, and Payments products. Previously, he served as Senior Vice President, Ads, from October 2018 to June 2020, and as Vice President, Apps, from May 2014 to October 2018. Prior to joining Google in March 2012, Prabhakar founded and led Yahoo! Labs, served as the chief technology officer at Verity, held various positions over the course of fourteen years at IBM Research, and was a Consulting Professor of Computer Science at Stanford University. Prabhakar holds a Bachelor of Technology degree from the Indian Institute of Technology Madras and a Doctoral degree in electrical engineering and computer science from the University of California, Berkeley.

Select Leadership Skills and Additional Experiences:

Extensive management experience having served in various leadership roles in several technology companies.

In-depth knowledge of the technology sector.

 

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PHILIPP SCHINDLER

Senior Vice President, Chief Business Officer, Google

Selected Membership:

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

Philipp Schindler, 52, has served as Senior Vice President, Chief Business Officer of Google since August 2015, overseeing Google’s and YouTube’s sales activities, Google’s technical and consumer support, partnership and business development teams, and country operations. Philipp previously served at Google as Vice President of Global Sales and Operations from January 2012 to July 2015; as President for Northern and Central Europe from June 2009 to January 2012; and as Managing Director, Germany, Switzerland, Austria and Nordics from September 2005 to June 2009. Philipp holds a Diplom Kaufmann degree with distinction in business administration and management from the European Business School in Oestrich-Winkel, Germany.

Select Leadership Skills and Additional Experiences:

Extensive leadership experience having served as senior vice president at AOL Germany, and head of marketing at CompuServe in Germany, a subsidiary of AOL Inc.

In-depth knowledge of the technology sector.

 

KENT WALKER

President, Global Affairs, Chief Legal Officer and Secretary, Alphabet and Google

Selected Membership:

  Executive Council, TechNet.org

Kent Walker, 62, has served as President, Global Affairs, and Chief Legal Officer of Alphabet and Google since November 2021, and Secretary of Alphabet since January 2020. Kent previously served as Senior Vice President, Global Affairs and Chief Legal Officer of Google from June 2018 to November 2021. He oversees teams responsible for content policy, government affairs, legal and compliance matters, and philanthropy. Since joining Google in 2006, he has led Google’s advocacy on competition, content, copyright, and privacy. He previously held executive positions at Netscape, AOL, and eBay. Kent holds a Bachelor of Arts degree in social studies from Harvard University and a Juris Doctor degree from Stanford Law School.

Select Leadership Skills and Additional Experiences:

Extensive leadership experience, including serving as the first chair of the Global Internet Forum to Counter Terrorism and executive positions at various technology companies. Currently chairs Google’s Advanced Technology Review Council.

Previously served as an Assistant U.S. Attorney in San Francisco and Washington D.C.

In-depth knowledge of the technology sector.

 

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—  CORPORATE GOVERNANCE AND BOARD MATTERS

 

We have adopted a code of business conduct and ethics for directors, officers (including our principal executive officer, principal financial officer, and principal accounting officer), and employees, known as the Alphabet Code of Conduct. We have also adopted Corporate Governance Guidelines, which, in conjunction with our certificate of incorporation, bylaws, and charters of the standing committees of our Board, form the framework for our corporate governance. The Alphabet Code of Conduct and Corporate Governance Guidelines are available on our Investor Relations website at https://abc.xyz/investor/. We will post amendments to the Alphabet Code of Conduct or any waivers of the Alphabet Code of Conduct for directors and executive officers on the same website.

 

Stockholders may request printed copies of the Alphabet Code of Conduct, the Corporate Governance Guidelines, and committee charters at no charge by sending inquiries to:

 

   

Investor Relations
Alphabet Inc.
1600 Amphitheatre Parkway
Mountain View, California 94043

Email: investor-relations@abc.xyz

 

 

Board Meetings

 

During 2022, our Board held five meetings and acted by unanimous written/electronic consent twice. Each director attended at least 75% of all Board and applicable committee meetings. We encourage our directors to attend our annual meetings of stockholders. Five directors attended Alphabet’s 2022 Annual Meeting of Stockholders.

 

Board Leadership Structure

 

In January 2018, John L. Hennessy, the then Lead Independent Director, was appointed to serve as Alphabet’s Chair of the Board. In December 2019, Sundar became the Chief Executive Officer of Alphabet.

 

Our Board regularly reviews its leadership structure to ensure continued effectiveness and believes that the current structure, which separates the Chair and Chief Executive Officer roles, is appropriate at this time in light of the evolution of Alphabet’s business and operating environment. In particular, our Board believes that this structure clarifies the individual roles and responsibilities of Chief Executive Officer and Chair, streamlines decision-making, and enhances accountability. John, a long-standing member of our Board, has in-depth knowledge of the issues, challenges, and opportunities facing us. As such, our Board believes that he is best positioned to develop agendas that ensure that our Board’s time and attention are focused on the most critical matters. His role enables decisive leadership, ensures clear accountability, and enhances the ability to communicate our messages and strategy.

 

Each of the director nominees standing for election, other than Larry, Sergey, and Sundar, is independent (see “Director Independence” on page 34 of this proxy statement), and our Board believes that the independent directors provide effective oversight of management.

 

Board Committees

 

Our Board is currently composed of eleven directors. Our Board has the following four standing committees:

 

1. an Audit and Compliance Committee (the Audit Committee),
2. a Leadership Development, Inclusion and Compensation Committee (the Compensation Committee),
3. a Nominating and Corporate Governance Committee (the Governance Committee), and
4. an Executive Committee.

 

From time to time, our Board may also establish ad hoc committees to address particular matters. Each of the standing committees operates under a written charter adopted by our Board. All of the current standing committee charters are available on our Investor Relations website at https://abc.xyz/investor/other/board/. Printed copies of the charters are available at no charge to any stockholder who requests them by following the instructions above.

 

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The membership and meetings during 2022 and the primary functions of each of the standing committees are described below.

 

Board of Directors Audit
Committee
Compensation
Committee
Governance
Committee
Executive
Committee
Larry Page      
Sergey Brin      
Sundar Pichai      
John L. Hennessy«      
Frances H. Arnold«      
R. Martin “Marty” Chávez«(1)      
L. John Doerr«      
Roger W. Ferguson Jr.«      
Ann Mather«      
Alan R. Mulally«(2)      
K. Ram Shriram«      
Robin L. Washington«(3)    

 

Member 
Committee Chair
« Independent Director
(1) Marty was appointed to serve as a member of our Board and the Audit Committee effective July 11, 2022.
(2) Alan’s term as a member of our Board and the Audit Committee ended on June 2, 2022.
(3) Robin served as a member of the Audit Committee from June 1, 2022 until July 11, 2022.

 

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Audit and Compliance Committee      
 

 

The main function of the Audit Committee is to oversee our accounting and financial reporting processes, oversee our relationship with our independent auditors, provide oversight regarding significant financial matters, and review and discuss with management the company’s major risk exposures. The Audit Committee’s responsibilities include but are not limited to:

 

Overseeing the risks and exposures associated with:
  Financial matters, including financial strategy and reporting, tax, accounting, disclosure, internal control over financial reporting, investment guidelines and credit and liquidity matters;
  Data privacy and security, competition, civil and human rights, sustainability, and reputational risks; and
  Our operations and infrastructure, particularly reliability, business continuity and capacity.
Selecting, hiring, compensating, and ongoing monitoring of our independent auditors, and approving the audit and non-audit services they perform.
Overseeing and monitoring the integrity of our financial statements and our compliance with related legal and regulatory requirements.
Establishing and overseeing processes and procedures regarding complaints and confidential and anonymous employee submissions about accounting, internal accounting controls, or audit matters.
Overseeing our internal control function, reviewing the appointment of an internal auditing executive and any significant issues raised by the internal audit team.
Reviewing with management and the independent auditors our annual audited financial statements, quarterly financial statements, earnings announcements, regulatory filings including our annual proxy statement, and other public announcements regarding our results of operations.
Reviewing and approving related party transactions.
Approving Alphabet’s overall compliance program and reviewing its implementation and effectiveness.

 

During 2022, the Audit Committee held nine meetings and acted by unanimous written/electronic consent two times.

 

The Audit Committee currently comprises Ann (Chair), Roger, and Marty, each of whom is a non-employee member of our Board. Our Board has determined that each of the directors serving on the Audit Committee is independent within the meaning of the rules of the SEC and the Listing Rules of the NASDAQ Stock Market (NASDAQ).

 

Our Board has determined that, based on her professional qualifications and experience described above, Ann is an audit committee financial expert as defined under the rules of the SEC, and that each member of the Audit Committee is able to read and understand fundamental financial statements as required by the Listing Rules of NASDAQ.

 

 

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Leadership Development, Inclusion and Compensation Committee      
 

 

The purpose of the Compensation Committee is to oversee our leadership development and compensation programs for the members of our Board and our employees. The Compensation Committee reports regularly to our full Board on its activities. The Compensation Committee’s responsibilities include but are not limited to:

 

Establishing, overseeing, and administering employee compensation, benefits, and perquisites policies, programs, and strategy and overseeing related risks.
Reviewing and approving compensation programs and awards for Alphabet’s executive officers and non-employee directors (together with the Governance Committee).
Administering Alphabet’s equity compensation plans as well as stock ownership requirements for Alphabet’s Chief Executive Officer and other members of senior management.
Establishing annual and long-term performance goals for our senior management.
Reviewing senior management development, retention, and succession plans and executive education.
Annually conducting and reviewing with the Board an evaluation of senior management performance.
Overseeing human capital management matters, including with respect to diversity and inclusion, workplace environment and safety, and management’s efforts to promote a workplace environment and culture that is healthy, vibrant, inclusive, respectful and free from employment discrimination, including harassment and retaliation.
Reviewing and approving peer companies for compensation benchmarking purposes.
Investigating any matters brought to its attention, with full access to all books, records, facilities, and employees.
Sole authority to retain and oversee the engagement of compensation consultants, legal counsel, or other advisors to advise the Compensation Committee at the expense of Alphabet.
Reviewing with management our annual Compensation Discussion and Analysis (CD&A).
Preparing and approving the annual Leadership Development, Inclusion and Compensation Committee Report.

 

During 2022, the Compensation Committee held six meetings and acted by unanimous written/electronic consent thirteen times.

 

The Compensation Committee currently comprises Robin (Chair), L. John Doerr, and Ram, each of whom is a non-employee member of our Board. Our Board has determined that each of the directors serving on the Compensation Committee is independent as defined in the Listing Rules of NASDAQ.

 

 

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Nominating and Corporate Governance Committee      
 

 

The Governance Committee’s purpose is to assist our Board in identifying individuals qualified to become members of our Board consistent with criteria set by our Board and as provided in the Corporate Governance Guidelines, to oversee the evaluation of the Board and management, and to develop and update our corporate governance principles. The Governance Committee’s responsibilities include but are not limited to:

 

Evaluating Board and Committee composition, including diversity, size, tenure, organization, and governance and determining future requirements.
Establishing a policy for considering director nominees; evaluating and recommending candidates for election consistent with Board-approved criteria and as provided by the Corporate Governance Guidelines.
Reviewing the chair of each committee and making recommendations to our Board.
Reviewing and recommending to our Board director independence determinations.
  Taking a leadership role in shaping Alphabet’s corporate governance, including reviewing the corporate governance framework and considering corporate governance issues that may arise from time to time, and developing appropriate recommendations to our Board.
  Evaluating stockholder proposals submitted to Alphabet for consideration at the annual meeting of stockholders and providing appropriate oversight.
Recommending ways to enhance communications and relations with our stockholders.
Overseeing risks and exposures associated with director and management succession planning, corporate governance, and overall Board effectiveness.
Overseeing our Board’s performance and annual self-evaluation process and developing continuing education programs for our directors.
Evaluating whether a director who notifies our Board of a change in job responsibilities, including with respect to commitments on other boards, continues to satisfy the Board’s membership criteria and independence requirements.
Evaluating and recommending termination of service of individual directors to the Board as appropriate, in accordance with governance principles, for cause or for other proper reasons.

 

During 2022, the Governance Committee held four meetings and acted by written/electronic consent once.

 

The Governance Committee currently comprises John L. Hennessy (Chair) and Frances, each of whom is a non-employee member of our Board. Our Board has determined that each of the directors serving on the Governance Committee is independent as defined in the Listing Rules of NASDAQ.

 

 

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 2022, the Executive Committee did not hold any meetings. The Executive Committee currently comprises Larry (Chair), Sergey, and Sundar.

 

 

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Director Independence

 

Our Board has adopted independence standards that mirror the criteria specified by applicable laws and regulations of the SEC and the Listing Rules of NASDAQ. Our Board has determined that Alan Mulally, who served as a member of our Board and the Audit Committee until June 2, 2022, and each of the director nominees standing for election, except Larry, Sergey, and Sundar are independent directors under these standards. In determining the independence of our directors, our Board considered all transactions in which we and any director had any interest, including those discussed under “Certain Relationships and Related Transactions” on pages 41-43 of this proxy statement, transactions involving payments made by us to companies in the ordinary course of business where certain of our directors serve on the board of directors or as a member of the executive management team of the other company, and transactions involving payments made by us to educational institutions with director affiliations.

 

Compensation Committee Interlocks and Insider Participation

 

During 2022, L. John Doerr, Ram, and Robin served on the Compensation Committee. None of the members of the Compensation Committee has been an officer or employee of Alphabet. None of our executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on our Board or the Compensation Committee.

 

Consideration of Director Nominees

 

Stockholder Recommendations and Nominees

 

The Governance Committee, a standing committee of our Board, considers properly submitted recommendations for candidates to our Board from stockholders. In evaluating such recommendations, the Governance Committee evaluates candidates recommended by stockholders using the same criteria it applies to evaluate other candidates and seeks to achieve a balance of experience, knowledge, integrity, and capability on our Board and to address the membership criteria set forth under “Director Selection Process and Qualifications” below.

 

Any stockholder recommendations for consideration by the Governance Committee should include the candidate’s name, biographical information, information regarding any relationships between the candidate and the company within the last three years, at least three personal references, a statement of recommendation of the candidate from the stockholder, a description of our shares beneficially owned by the stockholder, a description of all arrangements between the candidate and the recommending stockholder and any other person pursuant to which the candidate is being recommended, a written indication of the candidate’s willingness to serve on our Board, any other information required to be provided under securities laws and regulations, and a written indication to provide such other information as the Governance Committee may reasonably request. There are no differences in the manner in which the Governance Committee evaluates nominees for director based on whether the nominee is recommended by a stockholder or otherwise. Stockholder recommendations to our Board should be sent to us by one of the following two ways:

 

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 114 of this proxy statement.

 

Director Selection Process and Qualifications

 

The Governance Committee will evaluate and recommend candidates for membership on our Board consistent with criteria established by our Board in our policy with regard to the selection of director nominees. Pursuant to this policy, the Governance Committee screens candidates and evaluates the qualifications of the persons nominated by or recommended by our stockholders. The Governance Committee recommends director nominees who are ultimately approved by the full Board.

 

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Identification of Nominees

 

The Governance Committee uses a variety of methods for identifying and evaluating nominees for directors. The Governance Committee regularly assesses the appropriate size and composition of our Board, the needs of our Board and the respective committees of our Board, and the qualifications of candidates in light of these needs. Candidates may come to the attention of the Governance Committee through stockholders, management, current members of our Board, or search firms. The evaluation of these candidates may be based solely upon the information provided to the Governance Committee or may also include discussions with persons familiar with the candidate, an interview of the candidate, or other actions the Governance Committee deems appropriate, including the use of third parties to review candidates. The Governance Committee may, at Alphabet’s expense, retain search firms, consultants, and other advisors to identify, screen, and/or evaluate candidates.

 

Evaluation and Selection

 

When considering a potential non-incumbent candidate, the criteria with regard to the selection of director nominees reflect at a minimum any requirements of applicable law or listing rules of NASDAQ. Further, the Governance Committee will factor into its determination the following qualities, among others: integrity, professional reputation and strength of character, judgment, educational background, specific areas of expertise and knowledge of the industries in which we operate, diversity of professional experience, including whether the person is a current or former chief executive officer or chief financial officer of a public company or the head of a division of a large international organization, and ability to represent the best interests of our stockholders as a whole rather than special interest groups or constituencies, and to provide practical insights and diverse perspectives.

 

Diversity Criteria

 

Additionally, due to the global and complex nature of our business, our Board believes it is important to consider diversity of race, ethnicity, gender identity, age, education, skills, cultural background, and professional experiences in evaluating board candidates. Accordingly, when evaluating candidates for nomination as new directors, the Governance Committee will consider, and will ask any search firm that it engages to provide, a set of candidates that includes both underrepresented people of color and different genders. Candidates also are evaluated in light of our other policies, such as those relating to independence and service on other boards, as well as considerations relating to the size, structure, and needs of our Board. As part of its consideration of director succession, our Board and the Governance Committee monitor whether the directors as a group meet the criteria for the composition of our Board, including overall diversity of perspective and experience.

 

The Governance Committee and our Board believe that the above-mentioned attributes, along with the leadership skills and other experiences of our Board members described in their respective biographies on pages 23-26 provide us with a diverse range of perspectives and judgment necessary to guide our strategies and monitor their execution.

 

Director Service on Outside Boards and Other Commitments

 

Each member of our Board is expected to ensure that other existing and future commitments, including employment responsibilities and service on the boards of other entities, do not materially interfere with the member’s service as a director on our Board. The Governance Committee regularly reviews our Board members’ outside commitments for conflicts of interest and other concerns.

 

Our Board has adopted a policy that the maximum number of public company boards our directors can serve on is four, including membership on the Alphabet Board. All of our directors are in compliance with this policy.

 

Management Succession Planning

 

One of our Board’s principal duties is to review management succession planning. The Compensation Committee reviews at least annually and recommends to the full Board plans for the development, retention, and replacement of executive officers, including the Chief Executive Officer of Alphabet. Additionally, the Compensation Committee and the Governance Committee are jointly responsible for overseeing the risks and exposures associated with management succession planning.

 

Our Board believes that the directors and the Chief Executive Officer should collaborate on succession planning and that the entire Board should be involved in the critical aspects of the management succession planning process, including establishing selection criteria that reflect our business strategies, identifying and developing internal candidates to ensure the continuity of our culture, and making key management succession decisions.

 

Management succession is regularly discussed by the directors in meetings and in executive sessions of our Board. Directors become familiar with potential successors for key management positions through various means, including regular organization and talent reviews, presentations to our Board, and informal meetings.

 

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Board’s Role in Risk Oversight

 

Our Board, as a whole and through its committees, has responsibility for oversight of risk management. The oversight responsibility of our Board and its committees is enabled by management reporting processes, including an annual company-wide risk assessment, that are designed to provide visibility to our Board and its committees about the identification, assessment, and management of critical risks and management’s risk mitigation strategies. While our Board is ultimately responsible for risk oversight at Alphabet, our Board has delegated to its committees oversight of risks associated with their respective areas of responsibility, as summarized below. When appropriate, the committees provide reports to the full Board on these and other areas for review. Each committee meets in executive session with key management personnel and representatives of outside advisors as needed.

 

In particular, our Board has delegated to the Audit Committee the primary responsibility for the oversight of many of the risks facing our businesses. The Audit Committee’s charter provides that it will review and discuss with management any major risk exposures, including, among others, the key areas of oversight set forth below, and the steps Alphabet takes to detect, monitor, and actively manage such exposures.

 

Board/Committee   Primary Areas of Risk Oversight
Full Board   Strategic, financial, and execution risks and exposures associated with our business strategy, product innovation, sales roadmap, policy matters, significant litigation and regulatory exposures, and other current matters that may present material risk to our financial performance, operations, infrastructure, plans, prospects or reputation, acquisitions and divestitures, and data privacy, including cybersecurity.
Audit and Compliance Committee   Risks and exposures associated with (1) financial matters, in particular, financial strategy, financial reporting, tax, accounting, disclosure, internal control over financial reporting, investment guidelines and credit and liquidity matters; (2) data privacy and security, competition, legal, regulatory, compliance, civil and human rights, sustainability, and reputational risks; and (3) our operations and infrastructure, particularly reliability, business continuity, and capacity.
Leadership Development, Inclusion and Compensation Committee   Risks and exposures associated with leadership assessment, management succession planning, and the operation and structure of our compensation programs and arrangements, including incentive plans.
Nominating and Corporate Governance Committee   Risks and exposures associated with director and management succession planning, corporate governance, and overall board effectiveness.

 

Executive Sessions

 

Executive sessions of independent directors are held in connection with each regularly scheduled Board meeting and at other times as necessary, and are chaired by the Chair of our Board. Our Board’s policy is to hold executive sessions without the presence of management, including the Chief Executive Officer and other non-independent directors. The committees of our Board also generally meet in executive session at the end of each committee meeting, except for meetings of the Executive Committee as this committee has no independent directors.

 

Outside Advisors

 

Our Board and each of its committees may retain outside advisors, legal counsel, and consultants of their choosing at our expense. Our Board and its committees need not obtain management’s consent to retain such outside advisors, legal counsel, and consultants.

 

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Board Effectiveness, Board Annual Self-Assessment, Board Education

 

Our Board and each of its committees perform an annual self-assessment to evaluate the effectiveness of our Board and its committees in fulfilling their respective obligations and to identify areas for enhancement. As part of this annual self-assessment, directors are able to provide feedback on the performance of other directors. The self-assessment process, including evaluation method, is reviewed annually by the Governance Committee. A summary of the results is presented to our Board. The Chair of the Governance Committee leads our Board in its review of the results of the annual self-assessment and takes further action as needed.

 

In addition, all members of our Board have the opportunity and are encouraged to attend director education programs to assist them in remaining current with best practices and developments in corporate governance.

 

 

Engagement

 

We proactively engage with our stockholders and other stakeholders throughout the year on a broad range of topics that are of interest and priority to the company and our stockholders. These include business strategy and performance, and ESG topics such as environmental sustainability, human capital, workforce diversity, executive compensation, and Board leadership and composition.

 

Our engagement enables us to better understand our stockholders’ priorities and perspectives, gives us an opportunity to elaborate on our initiatives, policies, and practices, and fosters open and constructive dialogue. We share the feedback from these conversations with our Board, which considers these perspectives as part of its evaluation and review of our practices including those on governance, compensation, and ESG matters. This engagement also provides us an opportunity to understand investor perspectives on topics raised in stockholder proposals and to provide insight into our Board, management team, and subject matter experts as they consider our practices and disclosures.

 

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

 

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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.

 

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COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth information, as of April 4, 2023, concerning, except as indicated by the footnotes below:

 

Each person whom we know beneficially owns more than five percent of our Class A common stock or Class B common stock.
Each of our directors and nominees for our Board.
Each of our named executive officers (see the section titled “Executive Compensation” beginning on page 46 of this proxy statement).
All of our directors and executive officers as a group.

 

Unless otherwise noted below, the address of each beneficial owner listed in the table is c/o Alphabet Inc., 1600 Amphitheatre Parkway, Mountain View, California 94043.

 

We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws.

 

Applicable percentage ownership is based on 5,943,457,010 shares of Class A common stock and 882,702,042 shares of Class B common stock outstanding at April 4, 2023. In computing the number of shares of Class A and Class B common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of Class A common stock subject to options held by that person that are currently exercisable within sixty days of April 4, 2023 to be outstanding, ignoring the withholding of shares of common stock to cover applicable taxes. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Beneficial ownership representing less than one percent is denoted with an asterisk (*).

 

The information provided in the table is based on our records, information filed with the SEC, and information provided to us, except where otherwise noted. Non-voting Class C capital stock is not included in the table.

 

    Voting Shares Beneficially Owned    
    Class A Common Stock   Class B Common Stock   Total Voting
Name of Beneficial Owner   Shares   %   Shares   %   Power(1) %
Executive Officers and Directors                    
Larry Page       389,051,160   44.1   26.3
Sergey Brin(2)       368,712,520   41.8   25.0
Sundar Pichai   227,560   *       *
Ruth M. Porat(3)   28,060   *       *
Prabhakar Raghavan          
Philipp Schindler          
Kent Walker          
Frances H. Arnold          
R. Martin “Marty” Chávez          
L. John Doerr(4)   2,911,880   *   22,348,940   2.5   1.5
Roger W. Ferguson Jr.          
John L. Hennessy(5)   33,160   *       *
Ann Mather   16,720   *       *
K. Ram Shriram(6)   2,605,740   *       *
Robin L. Washington          
All executive officers and directors as a group (15 persons)   5,823,120   *   780,112,620   88.4   52.9
Other > 5% Security Holders                    
BlackRock, Inc.(7)   416,003,093   7.0       2.8
Eric E. Schmidt(8)   6,966,070   *   60,929,262   6.9   4.2
The Vanguard Group(9)   482,277,696   8.1       3.3

 

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(1) Percentage total voting power represents voting power with respect to all shares of our Class A common stock and Class B common stock, voting together as a single class. Each holder of Class B common stock is entitled to ten (10) votes per share of Class B common stock, and each holder of Class A common stock is entitled to one (1) vote per share of Class A common stock on all matters submitted to our stockholders for a vote. The Class A common stock and Class B common stock vote together as a single class on all matters submitted to a vote of our stockholders, except as may otherwise be required by law. The Class B common stock is convertible at any time by the holder into shares of Class A common stock on a share-for-share basis upon written notice to the transfer agent.
(2) Includes (i) 172,700 shares of Class B common stock held by SMB Pacific 2021 Charitable Remainder Unitrust I, of which Sergey is the sole trustee; and (ii) 172,700 shares of Class B common stock held by SMB Pacific 2021 Charitable Remainder Unitrust II, of which Sergey is the sole trustee. The address for SMB Pacific 2021 Charitable Remainder Unitrust I and SMB Pacific 2021 Charitable Remainder Unitrust II is 555 Bryant Street, #376, Palo Alto, California 94301.
(3) Consists of 28,060 shares of Class A common stock held by the Passfield Hall Foundation Inc. Ruth and her spouse are officers of the Passfield Hall Foundation Inc. and share voting and investment authority of the shares held by the Foundation. Ruth disclaims any pecuniary interest in shares held by the Passfield Hall Foundation Inc. The address for the Passfield Hall Foundation Inc. is 1251 Avenue of the Americas, 9th Floor, New York, New York 10020-1104.
(4) Includes 234,560 shares of Class A common stock held by The Austin 1999 Trust; 234,560 shares of Class A common stock held by The Hampton 1999 Trust; 2,373,060 shares of Class A common stock held by The Benificus Foundation; and 22,348,940 shares of Class B common stock held by Vallejo Ventures Trust. John is a trustee of The Austin 1999 Trust and The Hampton 1999 Trust and has voting and investment authority over the shares held by these trusts. John disclaims any pecuniary interest in these trusts. John is an officer and trustee of The Benificus Foundation and shares the investment authority over the shares held by The Benificus Foundation. John disclaims any pecuniary interest in the shares held by The Benificus Foundation. John is a trustee of Vallejo Ventures Trust and shares voting and investment authority over the shares held by such trust. The address for The Austin 1999 Trust and The Hampton 1999 Trust is c/o Kleiner Perkins, 2750 Sand Hill Road, Menlo Park, California 94025. The address for The Benificus Foundation and Vallejo Ventures Trust is 1180 San Carlos Ave., #717, San Carlos, California 94070.
(5) Consists of 33,160 shares of Class A common stock held by the Hennessy 1993 Revocable Trust. John is a trustee of the Hennessy 1993 Revocable Trust and has voting and investment authority over the shares held by the Trust. The address for the Hennessy 1993 Revocable Trust is 580 Lomita Drive, Stanford, California 94305.
(6) Includes (i) 123,320 shares of Class A common stock held by Ram’s spouse; (ii) 337,680 shares of Class A common stock held by Janket Ventures Limited Partnership; (iii) 734,324 shares of Class A common stock held by the 2021 RS Irrevocable Trust UAD 9/10/2021, of which Ram is the sole trustee (the 2021 RS GRAT); (iv) 734,324 shares of Class A common stock held by the 2021 VS Irrevocable Trust UAD 9/10/2021, of which Ram’s spouse is the sole trustee (the 2021 VS GRAT); (v) 265,676 shares of Class A common stock held by the 2022 RS Irrevocable Trust UAD 10/28/2022, of which Ram is the sole trustee (the 2022 RS GRAT); and (vi) 265,676 shares of Class A common stock held by the 2022 VS Irrevocable Trust UAD 10/28/2022, of which Ram’s spouse is the sole trustee (the 2022 VS GRAT). Each, the 2021 RS GRAT, the 2021 VS GRAT, the 2022 RS GRAT, and the 2022 VS GRAT (each, a GRAT, and collectively, the GRATs) has a 5-year term. During the term, Ram and his spouse each have sole voting and sole dispositive power over the shares held by the respective GRAT. Ram has voting and investment authority over the shares held by Janket Ventures Limited Partnership. The address for Janket Ventures L.P. and for all GRATs is 2475 Hanover Street, Suite 100, Palo Alto, California 94303.
(7) Based on the most recently available Schedule 13G/A filed with the SEC on February 1, 2023 by BlackRock, Inc. BlackRock, Inc., a parent holding company through certain of its subsidiaries, beneficially owned 416,003,093 shares of Class A common stock with sole voting power over 370,294,917 shares and sole dispositive power over 416,003,093 shares. The address for BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.
(8) Based on the most recently available Schedule 13G/A filed with the SEC on February 14, 2023 by Eric E. Schmidt, The Schmidt Family Living Trust, The Schmidt Family Foundation, and The Eric and Wendy Schmidt Fund for Strategic Innovation. Includes 2,993,760 shares of Class A common stock held by The Schmidt Family Foundation, of which Mr. Schmidt is a member of the board and vice president; 3,655,950 shares of Class A common stock held by The Eric and Wendy Schmidt Fund for Strategic Innovation, of which Mr. Schmidt is a member of the board and president; 6,291,300 shares of Class B common stock held by the Schmidt Investments L.P. of which The Schmidt Family Living Trust is the sole general partner; and 47,723,980 shares of Class B common stock held by The Schmidt Family Living Trust of which Mr. Schmidt is a co-trustee. The address for Eric E. Schmidt, The Schmidt Family Living Trust, The Schmidt Family Foundation and The Eric and Wendy Schmidt Fund for Strategic Innovations is 1010 El Camino Real, Suite 200, Menlo Park, California 94025.
(9) Based on the most recently available Schedule 13G/A filed with the SEC on February 9, 2023 by The Vanguard Group. The Vanguard Group, an investment adviser, beneficially owned through certain of its subsidiaries 482,277,696 shares of Class A common stock, with shared voting power over 8,825,739 shares, sole dispositive power over 457,351,119 shares, and shared dispositive power over 24,926,577 shares. The address for The Vanguard Group is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.

 

—  DELINQUENT SECTION 16(A) REPORTS

 

Section 16(a) of the Exchange Act requires our directors, executive officers, and persons who own more than ten percent of our Class A common stock, Class B common stock, and our Class C capital stock to file with the SEC reports of ownership of our securities and changes in reported ownership. Based on a review of reports filed with the SEC, or written representations from reporting persons that all reportable transactions were reported, we believe that, during 2022, our directors, executive officers, and ten percent stockholders timely filed all reports that were required to be filed under Section 16(a), except: (i) Marty’s grant of 8,824 shares of Class C GSUs on August 3, 2022 was reported on Form 4 filed with the SEC on August 9, 2022; (ii) Kent’s sale of 34,809 shares of Class C capital stock on September 28, 2022 was reported on Form 4 filed with the SEC on October 3, 2022; and (iii) Ruth’s charitable donation of 300 shares of Class C capital stock on August 23, 2021 was reported on Form 5 filed with the SEC on February 13, 2023.

 

In making this statement, we have relied upon examination of the copies of Forms 3, 4, and 5, and amendments to these forms provided to us, and the written representations of our directors, executive officers, and ten percent stockholders.

 

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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.

 

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6 Appendices

 

—  RELATED PARTY TRANSACTIONS

 

Indemnification Agreements

 

We have entered into an indemnification agreement with each of our directors and executive officers. The indemnification agreements, our certificate of incorporation, and bylaws require us to indemnify our directors and executive officers to the fullest extent permitted by Delaware law.

 

Use of Moffett Airfield

 

Pursuant to a 60-year lease agreement with NASA in early 2015, we became the operator of Moffett Airfield (the Airfield). Larry, Sergey, Eric E. Schmidt, and Ram, through their affiliated entities (the Founder Entities), have historically used and paid NASA applicable fees for the use of the Airfield for their personal aircraft. As the operator of the Airfield, we charge the Founder Entities fees for the use of the Airfield that are (i) non-preferential when compared to the fees charged to other private customers landing aircraft at the Airfield, and (ii) derived from rate schedules that are consistent with what an independent airfield services company believes, based on its industry experience, to be arm’s-length terms that are fair and reasonable to us as the operator. From the beginning of 2022 through March 31, 2023, we charged the Founder Entities approximately $1,941,587. These flights have not interfered with our business plans for use of the Airfield. The Audit Committee regularly reviews these fees. Larry, Sergey, Eric, and Ram do not have a material interest in any of the transactions described above.

 

License of Hangar Space at Moffett Airfield

 

In December 2015, we entered into an agreement to license a portion of our hangar space at the Airfield to LTA Research & Exploration LLC (LTA), which is owned by an entity affiliated with Sergey. From the beginning of 2022 through March 31, 2023, we charged LTA approximately $14,484,993. The Audit Committee believes that this transaction has been conducted on arm’s-length terms that are fair and reasonable to us as the operator of the Airfield based on its review of market comparables that were further reviewed and validated by an independent real estate services firm. This license has not interfered with our business plans for the use of the Airfield. Sergey does not have a material interest in the transaction described above.

 

License of Hangar Space at the San Jose International Airport

 

In November 2015, we entered into an agreement with BCH San Jose LLC (BCH) to license the use of a portion of BCH’s hangar space at the Mineta San Jose International Airport to hold Google’s corporate aircraft. Larry, Sergey, and Eric each own one-third interests in BCH, through their respective affiliated entities. From the beginning of 2022 through March 31, 2023, we paid approximately $1,303,278 to BCH. The Audit Committee reviewed market comparables and has deemed this transaction to be on terms, taken as a whole, no less favorable to us than terms generally available to an unaffiliated third-party under the same or similar circumstances. Larry, Sergey, and Eric do not have a material interest in the transaction described above.

 

Investments in Certain Private Companies

 

Google, GV, and Gradient Ventures directly invested, or committed to invest, an aggregate of approximately $25.9 million in certain private companies from the beginning of 2022 through March 31, 2023, in which Kleiner Perkins was a co-investor or existing investor (excluding Viz.ai, Inc. investment described on page 43). KPCB Holdings, Inc., as nominee for certain funds of Kleiner Perkins and several of the managers of the fund, holds more than 10% of the outstanding shares of such private companies. In addition, from time to time, we sell to and purchase from companies in which Kleiner Perkins holds more than 10% of the outstanding shares, products and services in the ordinary course of our business. L. John Doerr is a managing director/member of the managing members of those funds. L. John Doerr does not have a material interest in any of the transactions described above.

 

Office Building Lease

 

In July 2017, we purchased three office buildings in Mountain View, California, from an unaffiliated third-party seller. Pursuant to the purchase agreement, the seller’s existing leases were transferred to us, including a lease with Kitty Hawk Corporation (formerly Zee.Aero, Inc.), an entity affiliated with Larry. In June 2019, the lease was divided into three separate lease agreements. Kitty Hawk Corporation currently leases two of three buildings. From the beginning of 2022 through March 31, 2023, we charged Kitty Hawk Corporation approximately $2,947,443 in rent and operating expenses to occupy these two buildings.

 

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The third building is leased to Wisk Aero LLC, an entity affiliated with Larry. From the beginning of 2022 through March 31, 2023, we charged Wisk Aero LLC approximately $2,312,312.

 

The Audit Committee believes these transactions have been conducted on arm’s-length terms that are fair and reasonable to us as the owner, based on its review of market comparables that were further reviewed and validated by an independent real estate services firm. The Wisk Aero LLC lease does not interfere with our business plans for the use of the building. Larry does not have a material interest in the transactions described above.

 

Equity Investment in Viz.ai, Inc.

 

In June 2018, GV invested $5,000,000 in Viz.ai, Inc., a private company that develops artificial intelligence assisted medical imaging products (Viz.ai). Between August and October 2019, GV invested an additional $6,750,000 in a subsequent round of financing. In March 2021, GV invested an additional $2,000,000, and in March 2022, GV invested an additional $4,000,000 in subsequent rounds of financing. KPCB Holdings, Inc., as nominee for certain funds of Kleiner Perkins, and Innovation Endeavors II, L.P. co-invested in Viz. ai alongside GV. An entity affiliated with Eric Schmidt is the sole limited partner of Innovation Endeavors II, L.P. L. John Doerr is a General Partner of Kleiner Perkins. Kleiner Perkins and Innovation Endeavors II, L.P. each hold less than 20% of the outstanding equity of Viz.ai. In addition, Larry holds an indirect investment in Viz.ai as a limited partner of a venture fund. L. John Doerr, Eric, and Larry do not have a material interest in the transaction described above.

 

Certain Relationships

 

From time to time, we engage in certain transactions with other companies affiliated with our directors, executive officers, and significant stockholders or their immediate family members. We believe that all such arrangements have been entered into in the ordinary course of business and have been conducted on an arm’s-length basis and do not represent a material interest to such parties.

 

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DIRECTOR COMPENSATION

 

—  BOARD COMPENSATION ARRANGEMENTS FOR NON-EMPLOYEE DIRECTORS

 

Alphabet’s director compensation program is designed to attract and retain highly qualified non-employee directors. Our program aligns director compensation with compensation offered by peer companies (identified in Section 2 of the “Compensation Discussion and Analysis”) that compete with us for talent.

 

We designed the program to address the time, effort, expertise, and accountability required of active board membership. The Governance Committee and Compensation Committee believe that annual compensation for non-employee directors should consist of both cash and equity to compensate members for their service on our Board and its committees and to align their interests with those of our stockholders. By vesting over multiple years, equity also creates an incentive for continued service on our Board.

 

The Governance Committee and the Compensation Committee jointly review the compensation program for non-employee directors on an annual basis. In addition, the Compensation Committee reviews the director compensation program with and considers guidance from its independent compensation consultants, Compensia Inc. and Semler Brossy Consulting Group LLC.

 

In 2022, we awarded our standard ongoing compensation to each of our non-employee directors, including a $75,000 annual cash retainer payable in arrears and an annual $350,000 Class C Google Stock Unit (GSU) grant. To John L. Hennessy, we paid an additional $25,000 annual cash retainer and an additional annual $150,000 Class C GSU grant for his role as the non-executive Chair of our Board. To Ann Mather, we also paid an additional $25,000 annual cash retainer for her role as the Audit Committee Chair.

 

We awarded the above-mentioned cash retainers and GSU grants to our non-employee directors on July 6, 2022, the first Wednesday of the month following the month of our 2022 Annual Meeting of Stockholders. GSUs entitle the holder to receive one share of Class C capital stock for each share underlying the GSU grant as each GSU vests. The exact number of GSUs comprising the equity awards was calculated by dividing the target dollar value of the award by the average closing price of Alphabet’s Class C capital stock during the month of June 2022, rounded up to the nearest whole share. Annual GSU grants made to our non-employee directors are intended to vest at the rate of 1/48th monthly, beginning on the 25th day of the month following the grant date until fully vested, subject to continued service on our Board through the applicable vesting dates. Effective December 17, 2019, the Compensation Committee approved an amendment to Alphabet’s form of restricted stock unit agreement for future grants, such that, similar to GSUs granted to all other Alphabet employees, GSUs granted to our non-employee directors will immediately vest in full upon termination of service on the Board by reason of death.

 

R. Martin “Marty” Chávez was appointed to serve as a member of our Board and the Audit Committee effective July 11, 2022. In connection with his appointment, he received our standard initial compensation for new non-employee directors consisting of a $1.0 million GSU grant made on August 3, 2022 (the first Wednesday of the month following the effective date of his appointment). These GSUs vest at the rate of 1/4th on the 25th day of the month in which the grant’s first anniversary occurs, and an additional 1/48th vests on the 25th day of each month thereafter, subject to continued service on our Board through the applicable vesting dates.

 

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

 

Under Alphabet’s Amended and Restated 2021 Stock Plan, the aggregate amount of stock-based and cash-based awards that may be granted to any non-employee director in respect of any calendar year, solely with respect to his or her service as a member of our Board, is limited to $1.5 million.

 

To further align directors’ interests with those of our stockholders, each non-employee director is required to own shares of Alphabet stock equal in value to at least $1.0 million. Each director has five years from the date he or she became a director to comply with these ownership requirements. All of our non-employee directors either met the applicable minimum stock ownership requirement as of December 31, 2022 or were within the grace period noted above to come into compliance with these requirements.

 

During 2022, Larry, Sergey, and Sundar served as our employee directors and did not receive any compensation for their services as members of our Board. Please see the section titled “Executive Compensation” for more information about compensation paid to Sundar, who was a named executive officer during 2022.

 

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5 Questions and
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6 Appendices

 

DIRECTOR COMPENSATION FOR 2022

 

The following table summarizes compensation earned by our directors other than Sundar during 2022.

 

Name   Fees Earned or
Paid in Cash
($)
  Stock
Awards
($)(1)
  All Other
Compensation
($)
  Total
($)
Frances H. Arnold(2)   75,000   359,455     434,455
R. Martin “Marty” Chávez(3)     1,048,115     1,048,115
Sergey Brin(4)       1   1
L. John Doerr(5)   75,000   359,455     434,455
Roger W. Ferguson Jr.(5)   75,000   359,455     434,455
John L. Hennessy(6)   100,000   511,532     611,532
Ann Mather(5)   100,000   359,455     459,455
Alan R. Mulally(7)   75,000       75,000
Larry Page(4)       1   1
K. Ram Shriram(5)   75,000   359,455     434,455
Robin L. Washington(8)   75,000   359,455     434,455
(1) The amounts reported in the Stock Awards column reflect the aggregate grant date fair value of GSUs granted to our non-employee directors in 2022 calculated in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 (Compensation – Stock Compensation). The grant date fair value of each GSU award is measured based on the closing price of Alphabet’s Class C capital stock on the date of grant. The grant date fair value of GSUs granted to the non-employee directors on July 6, 2022 (the GSU grant following the 2022 Annual Meeting of Stockholders) was $115.21 per share. The grant date fair value of GSUs granted to Marty on August 3, 2022 was $118.78 per share.
(2) On December 31, 2022, there were 9,340 Class C GSUs outstanding for Frances.
(3) On December 31, 2022, there were 8,824 Class C GSUs outstanding for Marty.
(4) Co-Founders Larry and Sergey serve as employee directors and do not receive any compensation for their services as members of our Board. Their “All Other Compensation” reflects an annual employee salary of $1.
(5) On December 31, 2022, there were 7,140 Class C GSUs outstanding for John Doerr, Roger, Ann, and Ram.
(6) On December 31, 2022, there were 10,180 Class C GSUs outstanding for John Hennessy.
(7) Alan’s term as a member of our Board and the Audit Committee ended on June 2, 2022.
(8) On December 31, 2022, there were 8,220 Class C GSUs outstanding for Robin.

 

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EXECUTIVE COMPENSATION

 

TABLE OF CONTENTS

 

THE CD&A IS ORGANIZED INTO FOUR SECTIONS:  
SECTION 1—EXECUTIVE SUMMARY 46
SECTION 2—DETERMINING COMPETITIVE LEVELS OF PAY 47
SECTION 3—ELEMENTS OF PAY AND FISCAL YEAR 2022 PAY DECISIONS 47
SECTION 4—OTHER COMPENSATION INFORMATION 51

 

  COMPENSATION DISCUSSION AND ANALYSIS

 

Overview

 

Our Compensation Discussion and Analysis (CD&A) includes a detailed discussion of compensation for five named executive officers during the fiscal year ended December 31, 2022:

 

 

Section 1—Executive Summary

 

Compensation Philosophy

 

We designed our employee and executive compensation programs to support three goals:

 

Attract and retain the world’s best talent
Support our culture of innovation and performance
Align employee and stockholder interests

 

We pay employees competitively compared to other opportunities they might have in the market. We also offer competitive benefits to promote the health and wellbeing of our employees, provide certain perks that make life and work more convenient, design compelling job opportunities aligned with our mission, and create a fun and energizing work environment.

 

We believe in pay for performance, which is reflected in our compensation design. The proportion of overall pay tied to performance is higher for employees at more senior levels in the organization, reflecting their opportunity to have more impact on company performance.

 

We use equity awards that vest over time to align employee and stockholder interests and provide incentive for continued service. We believe that retaining and developing the best talent over the long-term is a key factor in our business success and ability to continue creating value for our stockholders. We require our named executive officers and other senior executives to maintain certain levels of holdings of Alphabet stock. See Section 4 of this CD&A for a description of our minimum stock ownership requirements.

 

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5 Questions and
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6 Appendices

 

Section 2—Determining Competitive Levels of Pay

 

Our executive compensation decisions are informed by competitive market data in addition to the reviews of individual roles and performance. We use peer group data to obtain compensation benchmarks for our named executive officers.

 

Each year, we review our peer group and our evaluation criteria. For 2022, we determined our peer group by evaluating potential peer companies against the following criteria:

 

High-technology or media company
Key talent competitor
High-growth, with a minimum of 50% of Alphabet’s revenue growth and/or headcount growth over the previous two-year period
$25 billion or more in annual revenue
$100 billion or more in market capitalization Considering these criteria, in October 2021, the Compensation

 

Committee selected the following peer companies for 2022 (which were the same peer companies our Compensation Committee used for 2021):

 

Amazon.com, Inc. Intel Corporation Netflix, Inc.
Apple Inc. International Business Machines Corporation Oracle Corporation
Cisco Systems, Inc. Meta Platforms, Inc. Salesforce, Inc.
Comcast Corporation Microsoft Corporation The Walt Disney Company

 

When appropriate, we supplement publicly available peer group data with compensation data for comparable opportunities at other S&P 500 companies and startup organizations.

 

Process for Determining Compensation

 

We regularly review our compensation levels against our peer group and comparable opportunities. We also assess executives based on their individual performance and overall company performance. Management uses this information to develop compensation recommendations for our named executive officers. The Compensation Committee, comprised entirely of independent directors, then reviews these recommendations, considers any relevant guidance from their independent compensation consultants, and makes the final decision on compensation for our named executive officers.

 

Compensation Consultants

 

The Compensation Committee directly engaged both Compensia Inc. and Semler Brossy Consulting Group LLC as independent compensation consultants in 2022. The consulting firms provide input, analysis, and guidance on Alphabet and Google’s executive compensation, peer groups, compensation design, equity usage and allocation, risk assessment, and human capital management. Both firms report directly to the Compensation Committee rather than to management, and the firms provided no services to Alphabet other than those in support of the Compensation Committee. The Compensation Committee has evaluated the independence of both consultants and concluded that their work does not raise any conflicts of interest.

 

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

 

We hold our advisory vote on named executive officer compensation (commonly known as a “say-on-pay” vote) every three years, and hold our advisory vote on the frequency of future say-on-pay votes (commonly known as “say-when-on-pay” vote) every six years. We are holding both the advisory say-on-pay and say-when-on-pay votes at the Annual Meeting (see Proposals Number 4 and 5 in this proxy statement). The Compensation Committee annually reevaluates our compensation practices to determine how they might be improved and considers prior say-on-pay vote results, among other considerations, in such reevaluation.

 

Section 3—Elements of Pay and Fiscal Year 2022 Pay Decisions

 

Base Salary

 

We use salaries to provide employees, including our named executive officers, a steady income in line with their contributions to our business, skills, experiences, and the job opportunities available to them outside of Alphabet, as appropriate.

 

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Effective January 2022, the Compensation Committee increased the annual salaries of Ruth, Prabhakar, Philipp, and Kent from $650,000 to $1.0 million. We last adjusted senior executive base salaries (excluding Sundar) in January 2011, and the increases were intended to align with market compensation trends during that time period. Sundar’s base salary remained at $2.0 million.

 

Environmental, Social, and Governance Bonus

 

In January 2022, we adopted an Environmental, Social, and Governance Bonus (ESG Bonus) for members of Alphabet’s senior executive team, including our named executive officers Ruth, Prabhakar, Philipp, and Kent (ESG Participants). The ESG Bonus provides individual participants with a maximum $2.0 million annual cash bonus opportunity, based on contributions to the company’s performance against environmental and social goals. The ESG Bonus consists of two components – Environmental and Social – each with a maximum potential payout of $1.0 million. The Compensation Committee is responsible for determining payout of the ESG Bonus for each ESG Participant, in conjunction with the CEO’s review of company-wide performance and individual contributions made by each ESG Participant.

 

For the Environmental component, key accomplishments include progress toward advancing carbon-free energy across our global operations – as of 2022, we achieved five consecutive years of 100% renewable energy annual matching1. We also took steps to drive net-positive impact through user engagement with Google technologies, platforms, products, and services. For the Social component in 2022, key accomplishments include progress toward our DEI goals, including our 2020 Racial Equity Commitments. We also took concrete steps to foster a culture of belonging, which helps us better design and build products with everyone in mind. For more information on how we are progressing toward our Environmental and Social goals, please see our most recent Environmental Report and Diversity Annual Report.

 

To acknowledge the central role each ESG Participant played, both as individuals and as a group, in advancing progress toward Alphabet’s Environmental and Social goals as outlined above, the Compensation Committee decided to align the amounts of the 2022 ESG Bonus payouts for all four individuals. Based on the strong Google and individual performance against ESG goals in 2022, the Compensation Committee initially proposed a bonus amount of $1.55 million for each ESG Participant. However, in light of macroeconomic conditions, the Compensation Committee decided to reduce ESG Bonus payouts for the ESG Participants by 50%. As a result, each individual’s 2022 ESG Bonus payout is $775,000. While both the Compensation Committee and the ESG Participants recognize each ESG Participant’s strong individual performance against ESG goals in 2022, each ESG Participant also encouraged the Compensation Committee’s decision, in its sole discretion, to adjust ESG bonuses downward in order to reflect macroeconomic conditions.

 

Equity Awards

 

We grant equity awards to our named executive officers to reinforce management’s focus on long-term stockholder value and commitment to the company. The Compensation Committee regularly evaluates the structure of these equity awards to ensure the right balance of time- and performance-based equity that supports the objectives of our compensation philosophy, aligns with our business priorities, and considers the perspectives of our stockholders.

 

The Compensation Committee utilizes a combination of GSUs and performance stock units (PSUs) to award our named executive officers. To determine individual grant values and the proportion of GSUs and PSUs, the Compensation Committee considers the following elements:

 

Market compensation values and practices for performance-based equity awards, including peers and S&P 100 companies.
Alphabet’s overall business performance, and the scope of role, impact, and performance of each recipient.
Each recipient’s outstanding and unvested equity awards, and the vesting schedules of those awards.
The resulting compensation at target and maximum performance values for each recipient.

 

 

 

1 Alphabet’s renewable energy methodology is a custom calculation and is based on a global approach. The numerator includes all renewable energy procured, regardless of the market in which the renewable energy was consumed. Additional details on Alphabet’s criteria and methodology can be found in the Achieving Our 100% Renewable Energy Purchasing Goal and Going Beyond disclosure.

 

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Based on the above criteria, in 2022, the Compensation Committee determined to grant the following equity awards for each of our named executive officers. See the sections below and the “Grants of Plan-Based Awards in 2022” table on page 54 for further details on the awards’ performance criteria and vesting.

 

Named Executive    Number of GSUs
Granted
    Target GSU
Award Value ($)
    Number of PSUs
Granted(1)
    Target PSU
Award Value ($)
    Aggregate
Target Award
Value ($)
    Grant
Cadence
Sundar Pichai  892,573(1)  84,000,000  1,338,859  126,000,000  210,000,000  Triennial
Ruth M. Porat  123,600(2)  18,000,000  34,340  5,000,000  23,000,000  Annual
Prabhakar Raghavan  157,920(2)  23,000,000  82,400  12,000,000  35,000,000  Annual
Philipp Schindler  157,920(2)  23,000,000  82,400  12,000,000  35,000,000  Annual
Kent Walker  123,600(2)  18,000,000  34,340  5,000,000  23,000,000  Annual

 

(1) The exact number of GSUs and PSUs comprising the equity awards was calculated by dividing the target dollar value of the award by the average closing price of Alphabet’s Class C capital stock during the month of November 2022 ($94.11 per share), rounded up to the nearest whole share.
(2) The exact number of GSUs and PSUs comprising the equity awards was calculated by dividing the target dollar value of the award by the average closing price of Alphabet’s Class C capital stock during the month of December 2021 ($145.65 per share), rounded up to the nearest whole share.

 

2022 CEO Equity Award for Sundar

 

The Compensation Committee currently follows a triennial grant cadence for CEO equity awards. Sundar’s last equity award was granted in December 2019, and fully vested at the end of December 2022. In December 2022, the Compensation Committee granted a new equity award to Sundar to recognize his strong performance as our CEO.

 

As with the 2019 award, the 2022 award consisted of both GSUs and PSUs. The on-target value of the award was unchanged from the 2019 award. However, relative to the 2019 award, the Compensation Committee made two design changes such that more of the award’s vesting is dependent on performance: (1) increased the proportion of PSUs to 60% of the total award from 43%; and (2) increased the performance requirement for on-target PSU payout to the 55th percentile from the 50th percentile of Alphabet’s relative total shareholder return (TSR). These changes further align Sundar’s compensation to long-term shareholder value creation and Alphabet’s stock performance relative to the S&P 100 over the applicable performance periods.

 

The GSU portion of the award vests quarterly over three years in 12 equal installments beginning March 25, 2023. The PSU portion of the award includes two tranches. The PSUs will vest, if at all, based on Alphabet’s TSR performance relative to the companies comprising the S&P 100 over a 2023-2024 performance period for the first tranche (2022 Tranche A) and over a 2023-2025 performance period for the second tranche (2022 Tranche B), subject to continued employment on each applicable vesting date. The number of PSUs vesting will be determined after the end of each performance period based on the payout curve illustrated below. Depending upon performance, the number of PSUs that vest will range from 0%-200% of the target number of PSUs. Upon vesting, each PSU and GSU will entitle Sundar to receive one share of Alphabet’s Class C capital stock.

 

 

(1) The number of PSUs vesting will be determined by linear interpolation for relative TSR ranks between the 25th and 55th percentile and between the 55th and 75th percentile.

 

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2019 Tranche B PSU Award Vest for Sundar

 

The performance period for the second tranche (2019 Tranche B) of the PSUs awarded to Sundar in December 2019 ended on December 31, 2022. Sundar’s 2019 Tranche B award provided that if the TSR performance of Alphabet relative to companies comprising the S&P 100 was between the 50th percentile (for 100% payout) and the 75th percentile (for the maximum 200% payout) for the three-year performance period ending December 31, 2022, the PSU payout would be determined by linear interpolation. Alphabet’s TSR for the three-year performance period was 47.53%, which ranked Alphabet’s TSR at the 73.20th percentile. On January 5, 2023, Sundar earned 192.78% of his target PSU award (for a total of 1,330,260 shares of Class C capital stock) upon the certification by the Compensation Committee based on the satisfaction of the performance criteria underlying the award.

 

2022 Equity Awards for Ruth, Prabhakar, Philipp, and Kent

 

In January 2022, the Compensation Committee granted a combination of GSUs and PSUs to our named executive officers, Ruth, Prabhakar, Philipp, and Kent, as part of our annual equity award structure. The 2022 equity awards are the conclusion of a multi-year transition from the previous compensation structure of biennial GSU awards that vested over a four-year period to our current structure of annual awards divided into GSUs and PSUs that each vest over a three-year period.

 

The GSU awards vest quarterly over three years in equal installments beginning March 25, 2022. The PSU awards will vest, if at all, on December 31, 2024, based on Alphabet’s TSR performance relative to the companies comprising the S&P 100 over a 2022-2024 performance period, subject to continued employment on the vesting date. The payout structure and time period of these PSUs mirror the structure of the three-year performance period PSUs granted to Sundar in 2019. The number of PSUs vesting will be determined after the end of the performance period based on the payout curve illustrated below. Depending upon performance, the number of PSUs that vest will range from 0%-200% of the target number of PSUs. Upon vesting, each PSU and GSU will entitle the recipient to receive one share of Alphabet’s Class C capital stock.

 

 

(1) The number of PSUs vesting will be determined by linear interpolation for relative TSR ranks between the 25th and 50th percentile and between the 50th and 75th percentile.

 

2023 Equity Awards for Ruth, Prabhakar, Philipp, and Kent

 

In April 2023, the Compensation Committee approved annual equity awards (GSUs and PSUs) to our named executive officers Ruth, Prabhakar, Philipp, and Kent. The awards will be granted on May 3, 2023.

 

The GSUs vest quarterly from May 2023 through December 2025. The PSUs will vest, if at all, based on the TSR performance of Alphabet relative to the companies comprising the S&P 100 over a 2023-2025 performance period, subject to continued employment on the vesting date. Depending upon performance, the number of PSUs that vest will range from 0%-200% of target. Upon vesting, each GSU and PSU will entitle the grantee to receive one share of Alphabet’s Class C capital stock.

 

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Section 4—Other Compensation Information

 

The first three sections of this CD&A describe how we think about compensation and how that affects our pay practices. Other compensation-related details that may be important considerations for our investors are discussed below.

 

Risk Considerations

 

The Compensation Committee reviews our compensation programs continuously throughout the year to assess and mitigate against material risks. In addition, in January 2023, the Compensation Committee reviewed a comprehensive evaluation conducted by Alphabet management of all our 2022 compensation programs and concluded that these programs do not create risks that are reasonably likely to have a material adverse effect on the company.

 

The Compensation Committee believes that the design of our annual and long-term incentives focuses performance on long-term value creation and discourages short-term risk taking at the expense of long-term results. A substantial portion of employees’ compensation is delivered in the form of equity awards, further aligning their interests with those of stockholders.

 

The Compensation Committee believes that the following risk oversight and compensation design features safeguard against excessive risk-taking:

 

Our Board as a whole has responsibility for risk oversight and regularly reviews reports on the deliberations of its committees. In addition, our Board reviews the strategic, financial, and execution risks and exposures associated with the financial, operational, and capital decisions that serve as inputs to our compensation programs.
Through discussions with management, the Compensation Committee gains insight into a reasonable range of future company performance expectations. This information is incorporated into decisions regarding the compensation of our named executive officers.
The majority of compensation provided to our named executive officers is delivered through equity awards, with payout based on long-term company performance. Our GSUs awards vest over a long-term period, and our PSUs awards are earned based on company performance. As the compensation of our named executive officers is tied to long-term performance, their interests are closely aligned with our stockholders’ interests and they are motivated to carefully assess risks to the company to protect their compensation.
Given that equity compensation comprises a high percentage of our named executive officers’ overall pay:
  Our equity awards are subject to vesting conditions and performance goals that promote focus on long-term interests rather than only short-term results and create compelling incentives for executive retention.
  Our named executive officers are subject to, and are in compliance with, Alphabet’s minimum stock ownership requirements (detailed in the Minimum Stock Ownership Requirements section below). This ensures that each named executive officer will hold a certain amount of our equity to further align his or her interests with those of our stockholders over the long term.
  We prohibit all speculative, short-sale, short-term and hedging transactions involving our securities. As a result, our named executive officers cannot insulate themselves from the effects of poor stock price performance.
  We have internal controls over financial reporting, the measurement and calculation of performance relative to goals, and other financial, operational, and compliance policies and practices designed to protect our compensation programs from manipulation by any employee.

 

Timing of Equity Award Grants

 

The effective grant date for equity awards to employees, members of our Board, and non-employee advisors is typically the first non-holiday Wednesday of the month following the date on which the equity award is approved by the Compensation Committee, unless otherwise specified by our Board or the Compensation Committee.

 

The Compensation Committee does not grant equity awards in anticipation of the release of material nonpublic information. Similarly, we do not time the release of material nonpublic information based on equity award grant dates.

 

Minimum Stock Ownership Requirements

 

To align our named executive officers’ interests with those of our stockholders, our Board has instituted minimum stock ownership requirements under our Corporate Governance Guidelines.

 

In April 2022, we increased our minimum stock ownership requirements as follows: (i) the Founders of Google and the Chief Executive Officer of Alphabet and Google shall each own shares of Alphabet stock equal in value to at least $35.0 million; and (ii) senior vice presidents of Alphabet or Google shall each own shares of Alphabet stock equal in value to at least $7.5 million.

 

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The Chief Executive Officer of Alphabet and Google, and senior vice presidents of Alphabet or Google shall have until the later of: (i) April 20, 2024; or (ii) five years from hire or promotion to their respective levels to comply with the minimum stock ownership requirements. Alphabet advisors who do not receive annual equity awards and the chief executive officers of Alphabet’s Other Bets are exempt from the minimum stock ownership requirements.

 

All of our named executive officers met the applicable minimum stock ownership requirements as of December 31, 2022.

 

Insider Trading, Hedging, and Pledging Policies

 

Our policy against insider trading prohibits all employees and our non-employee directors from engaging in any speculative or hedging transactions in our securities. We prohibit hedging transactions such as puts, calls, collars, swaps, forward sale contracts, exchange funds, and similar arrangements or instruments designed to hedge or offset decreases in the market value of Alphabet’s securities. No employee or non-employee director may engage in short sales of Alphabet securities, hold Alphabet securities in a margin account, or pledge Alphabet securities as collateral for a loan.

 

Perquisites and Other Benefits

 

Like all employees, our named executive officers are eligible to participate in various employee benefit plans, including medical, dental, and vision care plans; flexible spending accounts for health and dependent care; life, accidental death and dismemberment, disability, and travel insurance; survivor income benefit; employee assistance programs (e.g., confidential counseling); matching gift program; and paid time off. We also pay life insurance premiums for all employees (other than Larry and Sergey).

 

In addition, we maintain a tax-qualified 401(k) retirement savings plan with both pre-tax and after-tax Roth savings features for eligible employees, including our named executive officers. In 2022, we provided a company match equal to the greater of 100% of contributions up to $3,000, or 50% of $20,500, the maximum contribution under the Internal Revenue Code for employees younger than 50, for a maximum match of $10,250 per employee (other than Larry and Sergey). Our company match is fully vested at the time of contribution. Participants are not taxed on their pre-tax contributions or earnings on those contributions until distribution, but pre-tax contributions and all company matching contributions are deductible by us when made. Participants are taxed on their after-tax Roth contributions, and all company matching contributions and after-tax Roth contributions are deductible by us when made.

 

In 2022, we paid for personal security for Sundar, and incremental costs related to the personal use of non-commercial aircraft for Sundar, Ruth, Prabhakar, Philipp, and Kent. Pursuant to our Non-Commercial Aircraft Policy, which sets forth the guidelines and procedures for the personal use of non-commercial aircraft, named executive officers and their guests may use company aircraft with appropriate approvals and pay tax on any associated imputed income.

 

No Additional Executive Benefit Plans

 

Since we do not generally differentiate the benefits we offer our named executive officers from the benefits we offer other employees, we do not maintain any benefit plans that cover only named executive officers. We also do not maintain any executive retirement programs such as executive pension plans or supplemental executive retirement plans.

 

  LEADERSHIP DEVELOPMENT, INCLUSION AND COMPENSATION COMMITTEE REPORT

 

The Leadership Development, Inclusion and Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on its review and discussions with management, the Leadership Development, Inclusion and Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in this proxy statement.

 

LEADERSHIP DEVELOPMENT, INCLUSION AND COMPENSATION COMMITTEE

 

Robin L. Washington, Chair

L. John Doerr

K. Ram Shriram

 

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  2022 SUMMARY COMPENSATION TABLE

 

The following table sets forth information regarding the compensation paid to, or earned or received by, our named executive officers for the fiscal years ended December 31, 2022, 2021, and 2020.

 

Name and
Principal Position
  Year  Salary
($)
(1)  Stock
Awards
($)
(2)  Non-Equity
Incentive Plan
Compensation
(3)  All Other
Compensation
($)
(4)  Total
($)
Sundar Pichai
Chief Executive Officer, Alphabet and Google, and Director
  2022  2,000,000  218,037,684(5)    5,947,461(10)  225,985,145
  2021  2,000,000      4,322,599  6,322,599
  2020  2,000,000      5,410,162  7,410,162
Ruth M. Porat
Senior Vice President, Chief Financial Officer, Alphabet and Google
  2022  1,000,000  22,663,723(6)  775,000  15,046  24,453,769
  2021  650,000  13,995,065(7)    17,411  14,662,476
  2020  650,000  50,217,913    17,770  50,885,683
Prabhakar Raghavan
Senior Vice President, Knowledge and Information, Google
  2022  1,000,000  35,295,496(8)  775,000  10,329  37,080,824
  2021  650,000  27,984,366(9)    13,643  28,648,009
  2020  650,000  54,585,860    9,750  55,245,610
Philipp Schindler
Senior Vice President, Chief Business Officer, Google
  2022  1,000,000  35,295,496(8)  775,000  10,814  37,081,309
  2021  650,000  27,984,366(9)    27,617  28,661,983
  2020  650,000  65,501,684    226,816  66,378,500
Kent Walker
President, Global Affairs, Chief Legal Officer, and Secretary, Alphabet and Google
  2022  1,000,000  22,663,723(6)  775,000  12,541  24,451,264
  2021  650,000  13,995,065(7)    12,697  14,657,762
  2020  650,000  50,217,913    9,750  50,877,663

 

(1) Salaries reflect each named executive officer’s stated annual salary for the relevant fiscal year. Salaries include amounts deferred pursuant to Section 401(k) of the Internal Revenue Code.
(2) Amounts reflect the aggregate grant date fair value of GSUs and PSUs computed in accordance with FASB ASC Topic 718 and are not necessarily an indication of the value that will be realized if and when vesting occurs. The grant date fair value of each GSU award is measured based on the closing price of Alphabet’s Class C capital stock on the date of grant. The grant date fair value of each PSU award is measured using a Monte Carlo simulation model as PSUs contain a market condition at the time of grant (as calculated in accordance with FASB ASC Topic 718 and SEC Staff Accounting Bulletin Topic 14). The Monte Carlo simulation model for the PSUs assumes that the stock prices of Alphabet and the peer firms follow a correlated geometric Brownian motion. Under this model, the daily stock prices for Alphabet and peer firms were simulated over the remaining performance period using volatilities and correlations calculated from daily stock returns over a lookback term from the grant date. The valuation was done under a risk-neutral framework using the term-matched zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the grant date.
(3) As described under the “Environmental, Social, and Governance Bonus” section, these amounts reflect ESG bonus awards paid out on March 10, 2023 for performance in 2022.
(4) Generally consists of our 401(k) plan or Roth plan company match of up to $10,250 and personal use of company aircraft, unless otherwise noted. The aggregate incremental cost of personal use of the company aircraft is calculated based on a cost-per-flight-hour charge developed by a nationally recognized and independent service. The charge reflects the direct operating cost of the aircraft, including fuel, additives and lubricants, an allocable allowance for airframe, engine and APU maintenance and restoration, crew travel expenses, on-board catering, and trip-related landing/hangar/ramp fees and parking costs. This charge does not include any fixed costs that do not change based on usage, such as pilots’ and other employees’ salaries, home hangar expenses, and general taxes and insurance.
(5) The grant date fair value of the GSU award, $79,572,883, is measured based on the closing price of Alphabet’s Class C capital stock on the date of grant. The grant date fair value of the PSU award, $138,464,801, is measured using a Monte Carlo simulation model as PSUs contain a market condition at the time of grant. Assuming the maximum achievement of the TSR performance goals, the aggregate market value of the PSUs on the date of grant would be $238,718,560. See “Equity Awards” under Section 3 of the CD&A and the “Grants of Plan-Based Awards in 2022” table for details on the GSUs and PSUs awarded.
(6) The grant date fair value of the GSU award, $17,013,540, is measured based on the closing price of Alphabet’s Class C capital stock on the date of grant. The grant date fair value of the PSU award, $5,650,183, is measured using a Monte Carlo simulation model as PSUs contain a market condition at the time of grant. Assuming the maximum achievement of the TSR performance goals, the aggregate market value of the PSUs on the date of grant would be $9,453,802. See “Equity Awards” under Section 3 of the CD&A and the “Grants of Plan-Based Awards in 2022” table for details on the GSUs and PSUs awarded.
(7) Assuming the maximum achievement of the TSR performance goals, the aggregate market value of the 2021 PSUs on the date of grant would be $10,924,058.
(8) The grant date fair value of the GSU award, $21,737,688, is measured based on the closing price of Alphabet’s Class C capital stock on the date of grant. The grant date fair value of the PSU award, $13,557,808, is measured using a Monte Carlo simulation model as PSUs contain a market condition at the time of grant. Assuming the maximum achievement of the TSR performance goals, the aggregate market value of the PSUs on the date of grant would be $22,684,720. See “Equity Awards” under Section 3 of the CD&A and the “Grants of Plan-Based Awards in 2022” table for details on the GSUs and PSUs awarded.
(9) Assuming the maximum achievement of the TSR performance goals, the aggregate market value of the 2021 PSUs on the date of grant would be $21,843,616.
(10) Includes $5,935,084 for personal security.

 

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  GRANTS OF PLAN-BASED AWARDS IN 2022

 

The following table provides information regarding the equity awards granted in 2022 to our named executive officers.

 

         Estimated Future Payouts under
Non-Equity Incentive Plan Awards(1)
  Estimated Future Payouts Under
Equity Incentive Plan Awards
  Equity Grants  
Name  Grant Date  Date of
Approval of
Equity Awards
by Committee
 Threshold  Target  Maximum  Threshold
(#)
  Target
(#)
   Maximum
(#)
  All Other
Stock Awards:
Number of
Shares of Stock
or Units
(#)
   Grant Date
Fair Value of
Stock Awards
($)
(2) 
Sundar Pichai  12/19/2022  12/19/2022                  892,573(3)  79,572,883  
Sundar Pichai  12/19/2022  12/19/2022           669,430  1,338,859(3)  2,677,718      138,464,801  
Ruth M. Porat  N/A  N/A    2,000,000  2,000,000                   
Ruth M. Porat  1/5/2022  12/28/2021                  123,600(4)  17,013,540  
Ruth M. Porat  1/5/2022  12/28/2021           17,170  34,340(4)  68,680     5,650,183  
Prabhakar Raghavan  N/A  N/A    2,000,000  2,000,000                   
Prabhakar Raghavan  1/5/2022  12/28/2021                  157,920(4)  21,737,688  
Prabhakar Raghavan  1/5/2022  12/28/2021           41,200  82,400(4)  164,800     13,557,808  
Philipp Schindler  N/A  N/A    2,000,000  2,000,000                   
Philipp Schindler  1/5/2022  12/28/2021                  157,920(4)  21,737,688  
Philipp Schindler  1/5/2022  12/28/2021           41,200  82,400(4)  164,800     13,557,808  
Kent Walker  N/A  N/A    2,000,000  2,000,000                   
Kent Walker  1/5/2022  12/28/2021                  123,600(4)  17,013,540  
Kent Walker  1/5/2022  12/28/2021           17,170  34,340(4)  68,680     5,650,183  

 

(1) The company’s non-equity incentive plan award plan is determined based on the ESG bonus opportunity which consists only of a maximum of $2,000,000 and no threshold or target value.
(2) GSUs and PSUs are shown at their aggregate grant date fair value in accordance with FASB ASC Topic 718. The fair value of GSUs is measured based on the closing price of Alphabet’s Class C capital stock on the date of grant, and the fair value of PSUs is measured using a Monte Carlo simulation model, as PSUs contain a market condition at the time of grant (as calculated in accordance with FASB ASC Topic 718 and SEC Staff Accounting Bulletin Topic 14). The Monte Carlo simulation model for the PSUs assumes that the stock prices of Alphabet and the peer firms follow a correlated geometric Brownian motion. Under this model, the daily stock prices for Alphabet and peer firms were simulated over the remaining performance period using volatilities and correlations calculated from daily stock returns over a lookback term from the grant date. The valuation was done under a risk-neutral framework using the term-matched zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the grant date. See “Equity Awards” under Section 3 of the CD&A for details on the GSUs and PSUs awarded.
(3) The exact number of GSUs and PSUs comprising the equity award was calculated by dividing the target GSU and PSU grant values by the average closing price of Alphabet’s Class C capital stock during the month of November 2022 ($94.11 per share), rounded up to the nearest whole share number.
(4) The exact number of GSUs and PSUs comprising the equity award was calculated by dividing the target GSU and PSU grant values by the average closing price of Alphabet’s Class C capital stock during the month of December 2021 ($145.65 per share), rounded up to the nearest whole share number.

 

  DESCRIPTION OF PLAN-BASED AWARDS

 

The GSUs and PSUs granted to our named executive officers in 2022 were granted under Alphabet’s Amended and Restated 2021 Stock Plan in accordance with its terms and the applicable award agreements. See footnotes to the “Outstanding Equity Awards at 2022 Fiscal Year-End” table on page 55 for a description of the vesting schedule of the GSUs and PSUs reported in the “Grants of Plan-Based Awards in 2022” table above.

 

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  OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR-END

 

The following table provides information on the current holdings of unvested GSUs and PSUs by our named executive officers as of December 31, 2022. There are no longer any stock options outstanding for any of our named executive officers.

 

        Stock Awards
Name  Grant Date    Number of
Shares or
Units of Stock
That Have Not
Vested
(#)
  Market Value of
Shares or Units
of Stock That
Have Not
Vested
($)
(1)  Number of
Unearned
Shares or Units
of Stock That
Have Not
Vested
(#)
(2)  Market Value
of Unearned
Shares or Units
of Stock That
Have Not
Vested
($)
(1) 
Sundar Pichai  12/19/2022 (3)  892,573  79,198,002     
   12/19/2022 (4)      1,338,859  118,796,959  
   12/19/2019 (5)      1,330,260  118,033,970  
Ruth M. Porat  1/5/2022 (6)  82,400  7,311,352     
   1/5/2022 (7)      34,340  3,046,988  
   4/7/2021 (8)      48,560  4,308,729  
   5/6/2020 (9)  186,380  16,537,497     
Prabhakar Raghavan  1/5/2022 (6)  105,280  9,341,494     
   1/5/2022 (10)      82,400  7,311,352  
   4/7/2021 (11)      97,100  8,615,683  
   5/6/2020 (9)  202,580  17,974,923     
Philipp Schindler  1/5/2022 (6)  105,280  9,341,494        
   1/5/2022 (10)        82,400  7,311,352  
   4/7/2021 (11)        97,100  8,615,683  
   5/6/2020 (9)  243,100  21,570,263        
Kent Walker  1/5/2022 (6)  82,400  7,311,352        
   1/5/2022 (7)        34,340  3,046,988  
   4/7/2021 (8)        48,560  4,308,729  
   5/6/2020 (9)  186,380  16,537,497        

 

(1) The market value of unvested GSUs and PSUs is calculated by multiplying the number of unvested GSUs and PSUs held by the named executive officer by the closing price of Alphabet’s Class C capital stock on December 30, 2022, which was $88.73 per share.
(2) The number of PSUs included in the table assumes achievement of market-based goals at the target level, except for Sundar’s 2019 Tranche B PSUs, which are shown at a payout of 192.78% payout based on actual performance for the performance period that ended December 31, 2022.
(3) This award vests as follows: 1/12th of GSUs vested on March 25, 2023 and an additional 1/12th will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.
(4) This award vests as follows: Any PSUs vesting per the applicable grant agreement with respect to the January 1, 2023 to December 31, 2024 performance period (Target = 669,429, but between 0 and 1,338,858 may vest in accordance with the performance requirements in the applicable grant agreement) shall vest within 45 days after December 31, 2024 (2022 Tranche A); and any PSUs vesting per the applicable grant agreement with respect to the January 1, 2023 to December 31, 2025 performance period (Target = 669,430, but between 0 and 1,338,860 may vest in accordance with the performance requirements in the applicable grant agreement) shall vest within 45 days after December 31, 2025 (2022 Tranche B).
(5) This award vests as follows: The number of PSUs earned per the applicable grant will be determined by the Compensation Committee based on the Company’s achievement of performance goals set forth in the grant agreement and shall vest within 45 days after the performance period ends. With respect to the January 1, 2020 to December 31, 2022 performance period (2019 Tranche B), the Compensation Committee determined on January 5, 2023 that based on the Company’s performance, Sundar earned 192.78% of the target number of PSUs (1,330,260 shares)
(6) This award vests as follows: 1/12th of GSUs vested on May 25, 2022 and an additional 1/12th will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.
(7) This award vests as follows: The number of PSUs earned per the applicable grant will be determined by the Compensation Committee based on the Company’s achievement of performance goals set forth in the grant agreement and shall vest within 45 days after the performance period ends. With respect to the January 1, 2022 to December 31, 2024 performance period, the target is 34,340 shares, but between 0 and 68,680 shares may be earned in accordance with the market-based performance goals.
(8) This award vests as follows: The number of PSUs earned per the applicable grant will be determined by the Compensation Committee based on the Company’s achievement of performance goals set forth in the grant agreement and shall vest within 45 days after the performance period ends. With respect to the January 1, 2021 to December 31, 2023 performance period, the target is 48,560 shares, but between 0 and 97,100 shares may be earned in accordance with the market-based performance goals.

 

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(9) This award vests as follows: 1/8th of GSUs vested on June 25, 2020 and an additional 1/16th will vest quarterly thereafter until the units are fully vested, subject to continued employment on such vesting dates.
(10) This award vests as follows: The number of PSUs earned per the applicable grant will be determined by the Compensation Committee based on the Company’s achievement of performance goals set forth in the grant agreement and shall vest within 45 days after the performance period ends. With respect to the January 1, 2022 to December 31, 2024 performance period, the target is 82,400 shares, but between 0 and 164,800 shares may be earned in accordance with the market-based performance goals.
(11) This award vests as follows: The number of PSUs earned per the applicable grant will be determined by the Compensation Committee based on the Company’s achievement of performance goals set forth in the grant agreement and shall vest within 45 days after the performance period ends. With respect to the January 1, 2021 to December 31, 2023 performance period, the target is 97,100 shares, but between 0 and 194,200 shares may be earned in accordance with the market-based performance goals.

 

  OPTIONS EXERCISED AND STOCK VESTED IN FISCAL 2022

 

The following table provides information for the named executive officers regarding stock option exercises during the year ended December 31, 2022, including the number of shares acquired upon exercise and the value realized, before payment of any applicable withholding tax and broker commissions, and GSUs that vested during the same period, before payment of any applicable withholding tax.

 

  Option Awards   Stock Awards
Name   Number of Shares
Acquired on
Exercise
(#)
  Value Realized
on Exercise
($)
(1)   Number of Shares
Acquired on
Vesting
(#)
  Value Realized
on Vesting
($)
(2)
Sundar Pichai   345,840   39,618,219     1,993,460   262,060,740  
Ruth M. Porat         276,120   30,983,056  
Prabhakar Raghavan         352,320   39,532,104  
Philipp Schindler         392,820   44,077,089  
Kent Walker         276,120   30,983,056  

 

(1) The value realized on exercise is calculated as the product of (a) the number of shares of Alphabet’s Class A common stock or Class C capital stock, as applicable, for which the stock options were exercised and (b) the excess of the closing price of Alphabet’s Class A common stock or Class C capital stock, as applicable, on the NASDAQ Global Select Market on the date of the exercise over the applicable exercise price per share of the stock options.
(2) The value realized on vesting is calculated as the product of (a) the number of shares of Class C capital stock underlying the GSUs that vested and (b) the closing price of Class C capital stock on the NASDAQ Global Select Market on the day before vesting. The value realized on vesting for vesting events prior to our July 15, 2022 stock split is calculated as the product of (a) the number of pre-stock split shares of Class C Capital stock underlying the GSUs that vested and (b) the pre-stock split closing price of Class C capital stock on the NASDAQ Global Select market on the day before vesting.

 

  POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

 

We have no agreements with our named executive officers that provide for additional or accelerated compensation upon termination of the named executive officer’s employment or a change in control of Alphabet, except as set forth below.

 

In the event of a change in control of Alphabet and, unless our Board or the Compensation Committee determines otherwise, if the successor corporation does not assume or substitute the equity awards held by our employees, including our named executive officers, all unvested stock options and unvested GSUs will fully vest and the target number of PSUs awarded to each of our named executive officers will fully vest.

 

Effective December 17, 2019, the Compensation Committee approved an amendment to Alphabet’s form of restricted stock unit agreement for future grants, such that, similar to GSUs granted to all other Alphabet employees, GSUs granted to our non-employee directors and named executive officers of Alphabet will immediately vest in full upon termination of service on the Board, or of employment, by reason of death.

 

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In respect to PSUs awarded to our named executive officers:

 

Upon a termination of employment by reason of death (i) prior to the start of the performance period of a PSU award or during the performance period of a PSU award, the target number of PSUs for such award will immediately vest in full as of the date of such termination of employment and (ii) following the end of the performance period of an award but prior to the determination date with respect to such award, the number of PSUs earned based on actual performance will immediately vest as of the determination date.
Upon a termination of employment by Alphabet without cause (as defined in the PSU agreement) prior to the determination date for an award but after the start of the performance period with respect to such award, the number of PSUs earned based on actual performance will be prorated based on the number of calendar days in the performance period a named executive officer performed services and the pro rata portion will vest as of the determination date.

 

The following are our estimates of the value each of our named executive officers would have received as the result of GSU and/or PSU vesting, as applicable, following a change in control, death or termination without cause (as defined in the PSU agreement) occurring on December 31, 2022.

 

Upon a change in control or upon death, the estimated benefits of equity acceleration are as follows: $259,222,211 for Sundar, $31,204,566 for Ruth, $43,243,453 for Prabhakar, $46,838,792 for Philipp, and $31,204,566 for Kent. These estimates were calculated by multiplying the number of unvested GSUs and the target number of PSUs, by the closing price of Class C capital stock on December 30, 2022 (the last business day of Alphabet’s fiscal year 2022), which was $88.73 per share.

 

The performance period for Sundar’s 2019 Tranche B PSU award ended on December 31, 2022, and the award vested on January 5, 2023. As such, upon termination without cause, the estimated vested equity value for Sundar is $118,007,365, which reflects the actual value of Sundar’s 2019 Tranche B PSU award. The value was calculated by multiplying 192.78% of the target PSU award for Tranche B by the closing price of Alphabet’s Class C capital stock on January 4, 2023 (the business day immediately prior to vesting), which was $88.71 per share.

 

Upon termination without cause, the estimated vested equity value is $7,774,444 for Ruth, $16,357,365 for Prabhakar, $16,357,365 for Philipp, and $7,774,444 for Kent. The estimated vested equity value reflects prorated achievement of market-based goals at the maximum level for the PSU awards granted in 2021 and 2022. As of December 31, 2022, two-thirds of the performance period for the 2021 PSU awards (January 2021 to December 2022) had been completed, and 365/1096 of the performance period for the 2022 PSU awards (January 2022 to December 2022) had been completed. The estimated vested equity value shown was calculated by multiplying two-thirds of the maximum number of PSUs for the 2021 PSU awards and 365/1096 of the maximum number of PSUs for the 2022 PSU awards by the closing price of Alphabet’s Class C capital stock on December 30, 2022 (the last business day of Alphabet’s fiscal year 2022), which was $88.73 per share.

 

  ALPHABET CEO PAY RATIO

 

The following table sets forth the ratio of Alphabet Chief Executive Officer Sundar’s total compensation to the median of the annual total compensation of all our employees (except Sundar) for the year ended December 31, 2022.

 

Chief Executive Officer total compensation in 2022 $225,985,145
Median Employee total compensation in 2022 $279,802
Ratio of Chief Executive Officer to Median Employee total compensation 808:1

 

The Chief Executive Officer total compensation reflects Sundar’s 2022 total compensation as shown in the Summary Compensation Table on page 53, including the triennial equity award that was granted to Sundar in December 2022. Given that CEO equity awards are currently made on a triennial cadence, while our broad-based employee equity awards are typically made on an annual cadence, the pay ratio can fluctuate significantly across years. For example, our 2020 pay ratio was 27:1; our 2021 pay ratio was 21:1; and our 2022 pay ratio is 808:1.

 

To determine the median employee compensation, we analyzed all of Alphabet’s employees, excluding Alphabet’s Chief Executive Officer, as of December 31, 2022. We annualized wages and salaries for employees that were not employed for the full year. We used base salary and actual bonus as the consistently applied compensation measure to determine the median employee. If this resulted in more than one individual at the median level, we assessed the grant date fair value of standard equity awards for these individuals and selected the employee with the median award value. After identifying the median employee, we calculated annual total compensation for the median employee according to the methodology used to report the annual total compensation of our named executive officers in the 2022 Summary Compensation Table on page 53.

 

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  ALPHABET PAY VS. PERFORMANCE

 

Compensation Actually Paid

 

As outlined in the CD&A above, the Compensation Committee has implemented an executive compensation program that prioritizes performance and aims to align employee and stockholder interests. The following table sets forth additional compensation information for our principal executive officer (PEO) and our non-PEO named executive officers (Non-PEO NEOs), calculated in accordance with Item 402(v) of Regulation S-K, for fiscal years 2022, 2021, and 2020.

 

Year  Summary
Compensation
Table
(SCT) Total
for PEO
($)
  Compensation
Actually Paid to
PEO
($)
  Average SCT
Total for
Non-PEO NEOs
($)
(1)  Average
Compensation
Actually Paid to
Non-PEO NEOs
($)
(1)  Alphabet
TSR
($)
(2)  Peer Group
TSR (RDG
Internet
Composite
Index)
($)
(2)  Net Income
(Millions)
($)
  1-Year TSR
Relative to
S&P 100
(3) 
2022  225,985,145  115,820,786  30,766,792  (15,249,938) 131.03  81.50  59,972  14th 
2021  6,322,599  267,277,583  21,657,558  72,131,743  216.42  134.41  76,033  94th 
2020  7,410,162  121,360,289  55,846,864  76,136,650  132.73  137.32  40,269  72nd 

 

(1) The Non-PEO NEOs represent the following individuals for each of the years shown: Ruth M. Porat, Prabhakar Raghavan, Philipp Schindler, and Kent Walker.
(2) Alphabet TSR reflects TSR for Alphabet’s Class C shares (ticker: GOOG). Peer Group TSR is calculated based on the RDG Internet Composite index, which is used for purposes of Item 201(e) of Regulation S-K under the Exchange Act. The calculation is weighted according to the constituent companies’ market capitalization at the beginning of each period for which a return is indicated.
(3) 1-Year Relative TSR is calculated as a percentile ranking, and reflects TSR for Alphabet’s Class C shares (ticker: GOOG) for each period as a percentile ranking when compared to the TSR for the S&P 100 index (which is the peer group used for purposes of the performance-based awards outlined in the CD&A above).

 

To calculate Compensation Actually Paid (CAP), the following amounts were deducted from and added to Summary Compensation Table (SCT) total compensation:

 

   2022  2021  2020 
   PEO
($)
  Average for
Non-PEO 
NEOs
($)
  PEO
($)
  Average for
Non-PEO
NEOs
($)
  PEO
($)
 Average for
Non-PEO
NEOs
($)
 
SCT Total  225,985,145  30,766,792  6,322,599  21,657,558  7,410,162  55,846,864 
Adjustments                   
Deduction for Amounts Reported Under the “Stock Awards” Column in the SCT (i)  (218,037,684) (28,979,610) 0  (20,989,716) 0  (55,130,843)
Increase for Fair Value of Awards Granted during year that Remain Unvested as of Year End (ii)  213,860,445  10,808,316  0  29,055,529  0  53,762,742 
Increase for Fair Value of Awards Granted during year that Vest during year (ii)  0  5,264,776  0  0  0  15,423,645 
Increase/deduction for Change in Fair Value from Prior Year-end to Current Year-end of Awards Granted Prior to year that were Outstanding and Unvested as of Year-end (ii)  (79,637,516) (24,101,414) 234,908,651  23,361,513  108,778,718  5,059,005 
Increase/deduction for Change in Fair Value from Prior Year-end to Vesting Date of Awards Granted Prior to year that Vested during year (ii)  (26,349,603) (9,008,799) 26,046,332  19,046,859  5,171,409  1,175,237 
Compensation Actually Paid  115,820,786  (15,249,938) 267,277,583  72,131,743  121,360,289  76,136,650 

 

(i) Represents the grant date fair value of equity-based awards granted each year.
(ii) Reflects the value of equity calculated in accordance with the SEC methodology for determining CAP for each year shown. For all equity awards, our methodology for calculating the value of equity remained consistent between the grant date fair value measurement reflected in row (i) and the point-in-time fair value measurements reflected in the adjustment rows that follow. In all cases, we use the closing price on the applicable date as a basis for fair value. Fair values for each PSU award are measured using a Monte Carlo simulation model as PSUs contain a market condition at the time of grant (as calculated in accordance with FASB ASC Topic 718).

 

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As outlined in our CD&A, the only financial performance measure we currently incorporate within our executive pay program is Alphabet’s TSR relative to the companies comprising the S&P 100. As such, and as outlined below, relative TSR is the sole and most important financial performance measure as it relates to CAP.

 

Most Important Performance Measures
Relative Total Shareholder Return

 

The PEO’s CAP amounts are aligned with the Company’s TSR, Net Income, and 1-Year TSR ranking relative to the S&P 100 (the Alphabet-selected measure in the CAP table above), with the highest PEO CAP in 2021 when Alphabet TSR, Net Income and 1-Year Relative TSR were at their highest during the three-year period being reported. The reported 2021 Peer Group TSR was slightly down from 2020. The reduced value of the PEO’s outstanding awards in 2022, caused by a decline in our share price, was offset by a new equity award granted in December 2022. For non-PEO NEOs, CAP amounts are generally aligned with the aforementioned measures. However, 2021 was a transition year during which their equity award mix was updated to include performance-based awards, thereby reducing the target-value of grants compared to 2020. This resulted in a decline in non-PEO CAP for 2021 relative to 2020, despite the increase in the Company’s TSR, Net Income, and 1-Year TSR ranking relative to the S&P 100 for 2021 relative to 2020.

 

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EQUITY COMPENSATION PLAN INFORMATION

 

The following table summarizes our equity compensation plan information as of December 31, 2022. Information is included for equity compensation plans approved by our stockholders. As of December 31, 2022, we did not have any active equity compensation plans not approved by our stockholders. Neither shares of Class B common stock nor stock options are issued and outstanding under any of our current equity compensation plans.

 

Plan Category  Class of
Common
Stock/Capital
Stock
                  (a)
Common/
Capital
Shares to be
Issued Upon
Exercise of
Outstanding
Options and
Rights
(#)
                   (b)
Common/
Capital Shares
Available for
Future Issuance
Under Equity
Compensation
Plans (Excluding
Securities
Reflected in
Column (a))
(#)
 
Equity compensation plans approved by our stockholders  Class A   160(1)    (2) 
Equity compensation plans approved by our stockholders  Class C   324,139,026(3)    706,859,701(4) 
Total  Class A and Class C   324,139,186    706,859,701(4) 
(1) Consists of GSUs representing the right to acquire shares of our Class A common stock outstanding under our 2004 Stock Plan.
(2) We granted Class A common stock under the 2004 Stock Plan that expired in April 2014. No further grants may be made under the 2004 Stock Plan.
(3) Consists of GSUs representing the right to acquire 160 shares of Class C capital stock outstanding under our 2004 Stock Plan, GSUs representing the right to acquire 133,984,771 shares of Class C capital stock outstanding under our Amended and Restated 2012 Stock Plan, and GSUs representing the right to acquire 190,154,095 shares of Class C capital stock outstanding under our Amended and Restated 2021 Stock Plan.
(4) Consists of shares of Class C capital stock authorized to be issued pursuant to the Alphabet Inc. Amended and Restated 2021 Stock Plan, which was approved by our stockholders at the 2021 Annual Meeting of Stockholders and amended by our stockholders at the 2022 Annual Meeting of Stockholders. No further grants may be made under the 2004 Stock Plan and the Alphabet Inc. Amended and Restated 2012 Stock Plan.

 

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

—  PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

The following table sets forth all fees paid or accrued by us for the audit and other services provided by Ernst & Young LLP during the years ended December 31, 2021 and 2022 (in thousands):

 

   2021
($)
                    2022
($)
 
Audit Fees(1)   23,880    27,676 
Audit-Related Fees(2)   8,715    10,474 
Tax Fees(3)   1,155    1,407 
Other Fees(4)   625    1,663 
TOTAL FEES   34,375    41,220 
(1) Audit Fees: This category represents fees for professional services provided in connection with the audit of our financial statements, audit of our internal control over financial reporting, review of our quarterly financial statements, and audit services provided in connection with other regulatory or statutory filings for which we have engaged Ernst & Young LLP.
(2) Audit-Related Fees: This category consists primarily of system and organization controls reporting and other attest services related to information systems.
(3) Tax Fees: This category consists of tax compliance, tax planning, and tax advice, including foreign tax return preparation and requests for rulings or technical advice from tax authorities.
(4) Other Fees: This category consists of fees for permitted services other than the services reported in audit fees, audit-related fees, and tax fees.

 

—  AUDITOR INDEPENDENCE

 

We maintain a policy that aims to help maintain auditor independence and our compliance with regulatory requirements by ensuring a process for: (1) internal and external auditor review of proposed services for independence; and (2) pre-approval of the services by the Audit Committee. The Audit Committee considers whether the provision of services other than audit services is compatible with maintaining Ernst & Young LLP’s independence.

 

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—  PRE-APPROVAL POLICIES AND PROCEDURES

 

All audit and non-audit services provided by Ernst & Young LLP to us must be pre-approved in advance by the Audit Committee.

 

If the following conditions are met, the service will be considered pre-approved by the Audit Committee (without any further action from the Audit Committee):

 

the service is identified as a permitted service, as determined by the Audit Committee each year, and
the estimated fee for the permitted service is less than or equal to $500,000.

 

If the service does not meet the conditions noted above, explicit approval must be obtained from the Audit Committee, or the delegate of the Audit Committee who has been granted the authority to grant pre-approvals, before the professional from the independent registered accounting firm is engaged by Alphabet or its subsidiaries to render the service. If a pre-approval is obtained from the Audit Committee delegate, the auditor may be engaged to commence the service, but the service must still be presented to the full Audit Committee at its next scheduled meeting.

 

All services provided to us by Ernst & Young LLP in 2021 and 2022 were pre-approved by the Audit Committee.

 

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REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE OF THE BOARD OF DIRECTORS

 

The Audit and Compliance Committee of the Board of Directors of Alphabet is comprised entirely of independent directors who meet the independence requirements of the Listing Rules of the NASDAQ Stock Market and the SEC. The Audit and Compliance Committee operates pursuant to a charter that is available on our Investor Relations website at https://abc.xyz/investor/other/board/#audit-committee.

 

The Audit and Compliance Committee oversees Alphabet’s financial reporting process and internal control structure on behalf of our Board. Management is responsible for the preparation, presentation, and integrity of the financial statements and the effectiveness of Alphabet’s internal control over financial reporting. Alphabet’s independent auditors are responsible for expressing an opinion as to the conformity of Alphabet’s consolidated financial statements with generally accepted accounting principles and as to the effectiveness of Alphabet’s internal control over financial reporting.

 

In performing its responsibilities, the Audit and Compliance Committee has reviewed and discussed with management and the independent auditors the audited consolidated financial statements in Alphabet’s Annual Report on Form 10-K for the year ended December 31, 2022. The Audit and Compliance Committee has also discussed with Ernst & Young LLP, Alphabet’s independent auditors, the matters required to be discussed by Auditing Standard No. 1301, “Communications with Audit and Compliance Committees” issued by the Public Company Accounting Oversight Board (PCAOB).

 

The Audit and Compliance Committee received written disclosures and the letter from the independent auditors pursuant to the applicable requirements of the PCAOB regarding the independent auditors’ communications with the Audit and Compliance Committee concerning independence, and the Audit and Compliance Committee discussed with the auditors their independence.

 

Based on the reviews and discussions referred to above, the Audit and Compliance Committee unanimously recommended to our Board that the audited consolidated financial statements be included in Alphabet’s Annual Report on Form 10-K for the year ended December 31, 2022.

 

AUDIT AND COMPLIANCE COMMITTEE

 

Ann Mather, Chair
R. Martin “Marty” Chávez
Roger W. Ferguson Jr.

 

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MANAGEMENT PROPOSALS TO BE VOTED ON

 

Proposal Number 1    Election of Directors

 

Nominees

 

The Governance Committee recommended, and our Board nominated:

 

Larry Page,
Sergey Brin,
Sundar Pichai,
John L. Hennessy,
Frances H. Arnold,
R. Martin “Marty” Chávez,
L. John Doerr,
Roger W. Ferguson Jr.,
Ann Mather,
K. Ram Shriram, and
Robin L. Washington

 

as nominees for election as members of our Board at the Annual Meeting. At the Annual Meeting, eleven directors will be elected to our Board.

 

Except as set forth below, unless otherwise instructed, the persons appointed in the accompanying form of proxy will vote the proxies received by them for these nominees, who are all presently directors of Alphabet. In the event that any nominee becomes unavailable or unwilling to serve as a member of our Board, the proxy holders will vote in their discretion for a substitute nominee. The term of office of each person elected as a director will continue until the next annual meeting or until a successor has been elected and qualified, or until the director’s earlier death, resignation, or removal.

 

The sections titled “Directors and Executive Officers” and “Director Selection Process and Qualifications” on pages 22 and 34 of this proxy statement contain more information about the leadership skills and other experiences that caused the Governance Committee and our Board to determine that these nominees should serve as directors of Alphabet.

 

Required Vote

 

We have implemented a majority voting standard for elections of directors. To be elected, a nominee must receive the affirmative FOR vote of the holders of a majority of the voting power of Alphabet’s shares of Class A common stock and Class B common stock present or represented by proxy at the Annual Meeting and entitled to vote thereon, voting together as a single class. Unless marked to the contrary, proxies received will be voted FOR these nominees.

 

Our Board expects a director to tender his or her resignation if he or she fails to receive the required number of votes for re-election. If an incumbent director fails to receive the required number of votes for re-election, the Governance Committee will act on a prompt basis to determine whether to recommend that our Board accept the director’s resignation and will submit such recommendation for prompt consideration by our Board. Our Board may accept the resignation, refuse the resignation, or refuse the resignation subject to such conditions as our Board may impose. Additional details about this process are specified in our Corporate Governance Guidelines, which are available on our Investor Relations website at https://abc.xyz/investor/other/corporate-governance-guidelines/.

 

Alphabet Recommendation

 

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

 

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Proposal Number 2    Ratification of Appointment of Independent Registered Public Accounting Firm

 

The Audit Committee has appointed Ernst & Young LLP as the independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2023. During the fiscal year ended December 31, 2022, Ernst & Young LLP served as our independent registered public accounting firm and also provided certain audit-related, tax, and other services. See “Independent Registered Public Accounting Firm” on page 61 of this proxy statement.

 

The Audit Committee believes that the continued retention of Ernst & Young LLP as our independent registered public accounting firm is in the best interests of Alphabet and our stockholders. Notwithstanding its selection, the Audit Committee, in its discretion, may appoint another independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interests of Alphabet and our stockholders. If our stockholders do not ratify the appointment, the Audit Committee may reconsider whether it should appoint another independent registered public accounting firm. Representatives of Ernst & Young LLP are expected to participate in the Annual Meeting, where they will be available to respond to appropriate questions and, if they desire, to make a statement.

 

Required Vote

 

Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023 requires the affirmative FOR vote of the holders of a majority of the voting power of Alphabet’s shares of Class A common stock and Class B common stock present or represented by proxy at the Annual Meeting and entitled to vote thereon, voting together as a single class. Unless marked to the contrary, proxies received will be voted FOR ratification of the appointment of Ernst & Young LLP.

 

Alphabet Recommendation

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023.

 

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

 

At the Annual Meeting, stockholders will be asked to approve the amendment and restatement of the Alphabet Inc. Amended and Restated 2021 Stock Plan (the Plan), in order to increase the maximum number of shares of our Class C capital stock that may be issued under the Plan by 170,000,0001 shares. The amended and restated Plan also includes a recoupment provision and certain revisions to clarify the treatment of awards during an authorized leave of absence.

 

In April 2023, the Compensation Committee recommended, and our full Board adopted, subject to stockholder approval, the amendment and restatement of the Plan, which increases the share reserve by 170,000,000 shares of Class C capital stock. Our stockholders have previously authorized us to issue under the Plan up to a total of 1,280,200,040 shares of Class C capital stock, subject to adjustment upon certain changes in our capital structure.

 

The Compensation Committee and our full Board believe that in order to successfully attract and retain the best possible candidates, we must continue to offer a competitive equity incentive program. The proposed share reserve increase would allow Alphabet to continue its current granting practices.

 

As of December 31, 2022, of the 1,280,200,040 shares of Class C capital stock authorized for issuance under the Plan, 706,859,701 shares of stock remained available for future grants of stock awards, a number that the Compensation Committee and our full Board believes to be insufficient to meet our anticipated needs. Therefore, the Compensation Committee recommended, and our full Board approved, subject to stockholder approval, an increase in the maximum number of shares of Class C capital stock issuable under the Plan by 170,000,000 shares to a total of 1,450,200,040 shares of our Class C capital stock, subject to adjustment upon certain changes in our capital structure.

 

Further, in April 2023, the Compensation Committee recommended, and our full Board adopted, amendments to the Plan to: (1) reflect Alphabet’s entitlement to recoup compensation, to the extent permitted or required by applicable law, Alphabet policy and/or the requirements of an exchange on which the Alphabet’s shares of Capital Stock are listed for trading, including recoupment of incentive compensation from executive officers in compliance with the SEC’s recently adopted clawback rules; and (2) clarify that the awards granted under the Plan will be subject to the company’s leave policies as may be in effect from time to time.

 

Summary of the Plan

 

The material features of the Plan are summarized below. This summary is qualified in its entirety by reference to the full text of the Plan, which is set forth in Appendix A to this proxy statement.

 

Purpose

 

The Plan is intended to promote the interests of Alphabet and its subsidiaries (collectively, the company) and its stockholders by providing the employees and consultants of the company and members of our Board with incentives and rewards to encourage them to continue in the service of the company and with a proprietary interest in pursuing the long-term growth, profitability and financial success of the company.

 

Administration

 

The Compensation Committee shall administer the Plan in accordance with its terms. The Compensation Committee has full discretionary authority to administer the Plan, including, without limitation, the authority to (1) designate the employees and consultants of the Company and members of our Board who shall be granted incentive awards under the Plan and the amount, type and other terms and conditions of such incentive awards, and (2) interpret and construe any and all provisions of the Plan and the terms of any incentive award (and any agreement evidencing the grant of an incentive award). The Compensation Committee may exercise all discretion granted to it under the Plan in a non-uniform manner among participants. The Compensation Committee may delegate to a subcommittee of one or more members of our Board or employees of the company the authority to grant incentive awards, subject to such limitations as the Compensation Committee shall specify and to the requirements of applicable law.

 

 

 

1 On July 15, 2022, Alphabet executed a 20-for-one stock split with a record date of July 1, 2022, effected in the form of a one-time special stock dividend on each share of Class A common stock, Class B common stock, and Class C capital stock. All references made to the number of shares in this proposal and in the Plan, as well as all outstanding awards, reflect the stock dividend in accordance with the terms of the Plan.

 

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Eligibility

 

Any employee or consultant of, or person who renders services directly or indirectly to, the company and any member of our Board is eligible for selection by the Compensation Committee to receive an incentive award under the Plan (such a person who is selected to receive an incentive award is referred to herein as a participant). As of December 31, 2022, the company had approximately 190,234 employees and eleven members of our Board (including three employee directors).

 

Shares Subject to the Plan

 

Currently, the maximum number of shares of Class C capital stock that may be covered by incentive awards granted under the Plan shall not exceed 1,280,200,040 shares in the aggregate, and the maximum number of shares of Class C capital stock that may be covered by incentive awards granted under the Plan that are intended to be incentive stock options (ISOs) shall not exceed 1,280,200,040 shares in the aggregate. As of December 31, 2022, of the 1,280,200,040 shares of Class C capital stock authorized for issuance under the Plan, 706,859,701 shares of stock remained available for future grants of stock awards. Assuming stockholders approve this proposal, a total of 1,450,200,040 shares of Class C capital stock will have been authorized and reserved for issuance pursuant to the Plan. Assuming stockholders approve this proposal, the maximum number of shares of Class C capital stock that may be covered by incentive awards granted under the Plan that are intended to be ISOs shall not exceed 1,450,200,040.

 

For purposes of these maximum share limitations, shares of Class C capital stock shall only be counted as used to the extent that they are actually issued and delivered to a participant (or such participant’s permitted transferees as described in the Plan) pursuant to the Plan. Accordingly, if an incentive award is settled for cash or if shares of Class C capital stock are withheld to pay the exercise price of a stock option or to satisfy any tax withholding requirements in connection with an incentive award, only the shares issued (if any), net of the shares withheld, will be deemed delivered for purposes of determining the number of shares of Class C capital stock that are available for delivery under the Plan. In addition, shares of Class C capital stock related to incentive awards that expire, are forfeited or cancelled, or terminate for any reason without the issuance of shares shall not be treated as issued pursuant to the Plan. In addition, if shares of Class C capital stock owned by a participant (or such participant’s permitted transferees as described in the Plan) are tendered (either actually or through attestation) to the company in payment of any obligation in connection with an incentive award, the number of shares tendered shall be added to the number of shares of Class C capital stock that are available for delivery under the Plan. Notwithstanding anything to the contrary herein, shares of Class C capital stock attributable to incentive awards transferred under any incentive award transfer program (as described below) shall not again be available for delivery under the Plan. As of April 4, 2023, the market value of a share of Class C capital stock was $105.12 (representing the closing price on NASDAQ on such day).

 

Award Types

 

The Plan permits grants of the following types of incentive awards subject to such terms and conditions as the Compensation Committee shall determine, consistent with the terms of the Plan: (1) stock options, including stock options intended to qualify as ISOs, (2) other stock-based awards, including in the form of stock appreciation rights, phantom stock, restricted stock, restricted stock units, performance shares, deferred share units or share-denominated performance units and (3) cash awards. Subject to the terms and conditions set forth in the Plan, incentive awards may be settled in cash or shares of Class C capital stock and may be subject to performance-based and/or service-based conditions.

 

Stock Options

 

The Plan permits the Compensation Committee to grant stock options, including ISOs, which are stock options that are designated by the Compensation Committee as incentive stock options and which meet the applicable requirements of incentive stock options pursuant to Section 422 of the Code, subject to certain terms and conditions.

 

Exercise Price. The exercise price per share of Class C capital stock covered by a stock option shall not be less than 100% of the fair market value of a share of Class C capital stock on the date on which such stock option is granted. For this purpose, fair market value (Fair Market Value) is determined as being equal to the closing sales price on the date of grant or, if not so reported for such day, the immediately preceding business day, of a share of Class C capital stock as reported on the principal securities exchange on which shares of Class C capital stock are listed and admitted to trading.

 

Terms Applicable to Stock Options. A stock option granted to a participant under the Plan allows a participant to purchase up to a specified total number of shares of Class C capital stock at a specified exercise price per share during specified time periods, each as determined by the Compensation Committee in its discretion, provided that no stock option may have a term of longer than ten (10) years.

 

Additional Terms for ISOs. Stock options granted under the Plan that are intended to qualify as ISOs are subject to certain additional terms and conditions as set forth in the Plan, including: (1) each stock option that is intended to qualify as an ISO must be designated as an ISO in the agreement evidencing its grant, (2) ISOs may only be granted to individuals who are employees of the Company,

 

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(3) the aggregate Fair Market Value (determined as of the date of grant of the ISOs) of the number of shares of Class C capital stock with respect to which ISOs are exercisable for the first time by any participant during any calendar year under all plans of the Company cannot exceed $100,000, or such other maximum amount as is then applicable under Section 422 of the Code and (4) no ISO may be granted to a person who, at the time of the proposed grant, owns (or is deemed to own under the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of common stock of the Company unless (a) the exercise price of such ISO is at least one hundred ten percent (110%) of the Fair Market Value of a share of Class C capital stock at the time such ISO is granted, and (b) such ISO is not exercisable after the expiration of five years from the date it is granted. Any stock option granted under the Plan that is designated as an ISO but for any reason fails to meet the requirements of an ISO shall be treated under the Plan as a nonstatutory stock option.

 

Repricing Prohibited. Alphabet may not reprice any stock option granted under the Plan without the approval of the stockholders of Alphabet. For this purpose, “reprice” means (1) any of the following or any other action that has the same effect: (a) lowering the exercise price of a stock option after it is granted, (b) any other action that is treated as a repricing under U.S. generally accepted accounting principles (GAAP), or (c) cancelling a stock option at a time when its exercise price exceeds the fair market value of the underlying Class C capital stock, in exchange for another stock option, restricted stock or other equity, unless the cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate transaction, and (2) any other action that is considered to be a repricing under formal or informal guidance issued by NASDAQ.

 

Term

 

No grants of incentive awards may be made under the Plan after June 2, 2033.

 

Non-Employee Director Awards

 

Any awards granted to non-employee members of our Board under the Plan in respect of any calendar year, solely with respect to his or her service to our Board, may not exceed $1,500,000, based on the aggregate value of cash-based awards and the fair market value of any stock-based awards granted under the Plan, in each case determined as of the date of grant. Our Board will reassess this cap at least once every five years. As of December 31, 2022, there were eight non-employee members of our Board.

 

Amendment and Termination

 

Our Board may at any time suspend or discontinue the Plan or revise or amend the Plan in any respect whatsoever, provided that to the extent that any applicable law, tax requirement or rule of a stock exchange requires stockholder approval in order for any such revision or amendment to be effective, such revision or amendment shall not be effective without such approval. No amendment will be given effect to the extent that such provision would cause any tax to become due under Section 409A of the Code. Except as expressly provided in the Plan, no action under the Plan may, without the consent of a participant, reduce the participant’s rights under any previously granted and outstanding incentive award.

 

Adjustments Upon Certain Changes

 

The Plan includes provisions that require or permit the Compensation Committee to make certain adjustments upon the occurrence of specified events, including provisions that provide as follows: (1) upon the occurrence of certain events affecting the capitalization of Alphabet such as a recapitalization or stock split, the Compensation Committee shall make appropriate adjustments in the type and maximum number of shares available for issuance under the Plan and the limits described above for ISOs; (2) in the event of an increase or decrease in the number or type of issued shares of common or capital stock of Alphabet without receipt or payment of consideration by the Company, the Compensation Committee shall appropriately adjust the type or number of shares subject to each outstanding incentive award and the exercise price per share, if any, of shares subject to each such incentive award; (3) in the event of a merger or similar transaction as a result of which the holders of shares of Class C capital stock receive consideration consisting exclusively of securities of the surviving corporation in such transaction, the Compensation Committee shall appropriately adjust each outstanding incentive award so that it pertains and applies to the securities which a holder of the number of shares of Class C capital stock subject to such incentive award would have received in such transaction; and (4) upon the occurrence of certain specified extraordinary corporate transactions, such as a dissolution or liquidation of Alphabet, sale of all or substantially all of the company’s assets, and certain mergers involving Alphabet, and upon any other corporate change, including, but not limited to an extraordinary cash dividend, spin-off or the sale of a subsidiary or business unit, the Compensation Committee has discretion to make certain adjustments to outstanding incentive awards, cancel outstanding incentive awards and provide for cash payments to participants in consideration of such cancellation, or provide for the exchange of outstanding incentive awards.

 

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Summary of Federal Income Tax Consequences of Awards

 

ISOs. A participant who is granted an ISO does not recognize taxable income at the time the ISO is granted or upon its exercise, but the excess of the aggregate fair market value of the shares acquired on the exercise date (ISO shares) over the aggregate exercise price paid by the participant is included in the participant’s income for alternative minimum tax purposes. Upon a disposition of the ISO shares more than two years after grant of the ISOs and one year after exercise of the ISOs, any gain or loss is treated as long-term capital gain or loss. In such case, Alphabet would not be entitled to a deduction. If the participant sells the ISO shares prior to the expiration of these holding periods, the participant recognizes ordinary income at the time of disposition equal to the excess, if any, of the lesser of (1) the aggregate fair market value of the ISO shares at the date of exercise; and (2) the amount received for the ISO shares, over the aggregate exercise price previously paid by the participant. Any gain or loss recognized on such a premature disposition of the ISO shares in excess of the amount treated as ordinary income is treated as long-term or short-term capital gain or loss, depending on how long the shares were held by the participant prior to the sale. The amount of ordinary income recognized by the participant is subject to payroll taxes. Alphabet is entitled to a deduction at the same time and in the same amount as the participant recognizes ordinary income.

 

Nonstatutory Stock Options. A participant who is granted a stock option that is not an ISO (a nonstatutory stock option) does not recognize any taxable income at the time of grant. Upon exercise, the participant recognizes taxable income equal to the aggregate fair market value of the shares subject to nonstatutory stock options over the aggregate exercise price of such shares. Any taxable income recognized in connection with the exercise of nonstatutory stock options by an employee is subject to payroll taxes. Alphabet is entitled to a deduction at the same time and in the same amount as the participant recognizes ordinary income. The participant’s basis in the option shares will be increased by the amount of ordinary income recognized. Upon the sale of the shares issued upon exercise of nonstatutory stock options, any further gain or loss recognized will be treated as long-term or short-term capital gain or loss, depending on how long the shares were held by the participant prior to the sale.

 

Restricted Stock and Restricted Stock Units. A participant will not recognize income at the time a restricted stock award is granted. When the restrictions lapse with regard to any portion of restricted stock, the participant will recognize ordinary income in an amount equal to the fair market value of the shares with respect to which the restrictions lapse, unless the participant elected to realize ordinary income in the year the award is granted in an amount equal to the fair market value of the restricted stock awarded, determined without regard to the restrictions. A participant will not recognize income at the time an award of restricted stock units (GSUs) or performance-based restricted stock units (PSUs) is granted. When GSUs or PSUs vest, the participant will recognize ordinary income in an amount equal to the cash paid or to be paid or the fair market value of the shares delivered or to be delivered. The amount of ordinary income recognized by the participant is subject to payroll taxes. Alphabet is entitled to a deduction at the same time and in the same amount as the participant recognizes ordinary income.

 

Performance-Based Awards. A participant will not recognize income at the time of grant of a performance-based award. The participant will recognize ordinary income at the time the performance-based award vests in an amount equal to the dollar amount, or the fair market value of the shares of Class C capital stock, subject to the award. The amount of ordinary income recognized by the participant is subject to payroll taxes. Alphabet is entitled to a deduction at the same time and in the same amount as the participant recognizes ordinary income.

 

Section 162(m) Compensation Deduction Limitation. In general, Section 162(m) limits Alphabet’s compensation deduction to $1,000,000 paid in any tax year to any “covered employee” as defined under Section 162(m), as amended. A “covered employee” includes each individual who served as Alphabet’s Chief Executive Officer or Chief Financial Officer at any time during the taxable year, each of the three other most highly compensated officers of the Company for the taxable year, and any other individual who was a covered employee of the company for the preceding tax year beginning after December 31, 2016.

 

THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF U.S. FEDERAL INCOME TAXATION WITH RESPECT TO THE GRANT AND EXERCISE OF AWARDS UNDER THE PLAN. IT DOES NOT PURPORT TO BE COMPLETE AND DOES NOT DISCUSS THE TAX CONSEQUENCES OF AN INDIVIDUAL’S DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH ANY ELIGIBLE INDIVIDUAL MAY RESIDE.

 

Plan Benefits

 

The amount and timing of awards granted under the Plan are determined in the sole discretion of the administrator and therefore cannot be determined in advance. The future awards that would be received under the Plan by executive officers and other employees are discretionary and are therefore not determinable at this time.

 

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Required Vote

 

Approval of the proposed amendment and restatement of the Plan to increase the maximum number of shares of our Class C capital stock that may be issued under the Plan by 170,000,000 shares requires the affirmative FOR vote of the holders of a majority of the voting power of Alphabet’s shares of Class A common stock and Class B common stock present or represented by proxy at the Annual Meeting and entitled to vote thereon, voting together as a single class. Unless marked to the contrary, proxies received will be voted FOR approval of the amendment and restatement of the Plan.

 

Alphabet Recommendation

 

We believe strongly that the approval of the increase in the number shares of Class C capital stock issuable under the Plan by 170,000,000 shares is essential to our continued success. Our employees are among our most valuable assets. Equity awards provided under the Plan are vital to our ability to attract and retain outstanding and highly skilled individuals. Such awards also are crucial to our ability to motivate employees to achieve our goals. For the reasons stated above the stockholders are being asked to approve the Plan.

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE ALPHABET INC. AMENDED AND RESTATED 2021 STOCK PLAN TO INCREASE THE NUMBER OF SHARES OF CLASS C CAPITAL STOCK ISSUABLE UNDER THE PLAN BY 170,000,000 SHARES.

 

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Proposal Number 4    Advisory Vote to Approve Compensation Awarded to Named Executive Officers

 

As required by the SEC’s proxy rules, we are seeking an advisory, non-binding stockholder vote with respect to compensation awarded to our named executive officers.

 

Our executive compensation program and compensation paid to our named executive officers are described on pages 46-58 of this proxy statement. Our compensation programs are overseen by the Compensation Committee and reflect our philosophy to pay all of our employees, including our named executive officers, in ways that support three primary business objectives:

 

Attract and retain the world’s best talent.
Support our culture of innovation and performance.
Align employee and stockholder interests.

 

We believe in pay for performance, which is reflected in our compensation design. The proportion of overall pay tied to performance is higher for employees at more senior levels in the organization, including our named executive officers, reflecting their opportunity to have more impact on company performance.

 

You are being asked to approve, on an advisory basis, the compensation awarded to Alphabet’s named executive officers as disclosed under SEC rules, including the Compensation Discussion and Analysis, the compensation tables, and related narrative disclosures included in this proxy statement.

 

Required Vote

 

Approval of this proposal requires the affirmative FOR vote of the holders of a majority of the voting power of Alphabet’s shares of Class A common stock and Class B common stock present or represented by proxy at the Annual Meeting and entitled to vote thereon, voting together as a single class. Because this vote is advisory, it will not be binding upon our Board. However, the Compensation Committee will consider the outcome of the vote, along with other relevant factors, in evaluating Alphabet’s executive compensation program.

 

Alphabet Recommendation

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION AWARDED TO ALPHABET’S NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THIS PROXY STATEMENT.

 

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Proposal Number 5    Advisory Vote on the Frequency of Advisory Votes to Approve Compensation Awarded to Named Executive Officers

 

As required by the SEC’s proxy rules, we are seeking an advisory, non-binding stockholder vote about how often we should present stockholders with the opportunity to vote on compensation awarded to our named executive officers. You may elect to have the vote held every year, every two years, or every three years, or you may abstain.

 

We recommend that this advisory vote be held once every three years. The company and our Board believe that a triennial voting frequency is aligned with our long-term compensation philosophy, and provides our stockholders with an appropriate horizon over which to evaluate the efficacy of our compensation program and policies in achieving long-term business results. We also believe that a three-year timeframe provides a better opportunity to observe and evaluate the impact of any changes to our executive compensation policies and practices that have occurred since the last advisory vote.

 

Required Vote

 

The frequency that receives the highest number of votes will be deemed to be the frequency selected by the stockholders. Because this vote is advisory, it will not be binding upon our Board. However, the Compensation Committee will consider the outcome of the vote, along with other relevant factors, in recommending a voting frequency to our Board.

 

Alphabet Recommendation

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR A FREQUENCY OF ONCE EVERY “3 YEARS” FOR THE STOCKHOLDER ADVISORY VOTE ON COMPENSATION AWARDED TO OUR NAMED EXECUTIVE OFFICERS.

 

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STOCKHOLDER PROPOSALS

 

OUR APPROACH TO STOCKHOLDER PROPOSALS

 

We are committed to advancing our practices, policies, and disclosures in ways that further the interests of the company and our stakeholders and ultimately contribute to strong business outcomes and stockholder value creation.

 

We recognize that the submission of proposals for vote at our Annual Meeting is one mechanism for our stockholders to convey their priorities, perspectives, and issues of concern. Our Board and management team assess each proposal request carefully and discuss them with internal subject matter experts who have deep insight into our current approach to the matters raised by the proposals. In many instances, we engage directly with the proponents, which enables us to better understand their objectives and give us an opportunity to elaborate on our initiatives, policies, and practices. We prioritize those engagements where we believe direct dialogue will be most constructive to our ongoing efforts in these areas.

 

Stockholder proposals often request that we prepare a report, adopt a policy, or implement new (or different) processes. We do appreciate the issues raised in many of the proposals, and in many cases we have already taken actions to address them, rendering the implementation of a specific proposal unnecessary or not the best use of company resources. While our actions may not be exactly as prescribed in a proposal, they are designed to further the long-term interests of the company, our stockholders, and other stakeholders.

 

For example, we are proud of the leadership role our company has played in advancing transparency on important issues. In 2010, we were one of the first in our industry to issue annual Transparency Reports, which share data on how we handle content that violates our policies, as well as how we handle government requests for removal content. We were also one of the first technology companies to publish numbers about the diversity of our workforce beginning in 2014. In 2018, we launched a quarterly YouTube Community Guidelines Enforcement Report, which we have expanded and refined over the years to include additional data like channel removals, the number of comments removed, the policy reason why a video or channel was removed, and appeals data.

 

We have continued to thoughtfully add to and enhance our disclosures, often as a result of our ongoing engagement with external experts, in alignment with the requirements of our business as it evolves, and in ways that do not compromise competitively sensitive information or stockholder value.

 

Various stockholders have submitted Proposal Numbers 6-18 for our Annual Meeting. While a number of these proposals contain claims that we believe are incorrect or misleading, we have not attempted to refute all of them.

 

Below we describe our Board’s rationale for recommending against each stockholder proposal submitted for our Annual Meeting.

 

Proposal   Alphabet
Board Voting
Recommendation
        Rationale
STOCKHOLDER PROPOSALS:              
(6) Stockholder proposal regarding a lobbying report (page 76)    AGAINST  

●  We already publish extensive lobbying disclosures, which address much of the information requested in the proposal

●  Our lobbying transparency efforts have been recognized as best in class

●  We have robust oversight mechanisms in place including oversight by our Board and senior management team

(7) Stockholder proposal regarding a congruency report (page 78)    AGAINST  

●  We seek to advance the best interests of the company and our stockholders in partnering with various organizations

●  Our collaboration with organizations does not reflect an endorsement of their entire agendas

 

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Proposal         Alphabet
Board Voting
Recommendation
        Rationale
(8) Stockholder proposal regarding a climate lobbying report (page 80)   AGAINST  

●  We already publish extensive lobbying disclosures including on climate-related topics

●  We assess alignment of our trade association participation with the goals of the Paris Agreement

●  We engage with our trade associations to encourage alignment between our core public policy objectives and their policy advocacy activities, including on climate change

(9) Stockholder proposal regarding a report on reproductive rights and data privacy (page 83)   AGAINST  

●  We have policies and procedures for evaluating and responding to requests for user information, and routinely push back on overbroad or otherwise inappropriate demands

●  We provide robust privacy controls and practice data minimization for users, and are committed to improving our privacy protections when appropriate, especially around health-related topics

(10) Stockholder proposal regarding a human rights assessment of data center siting (page 86)   AGAINST  

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

●  Our human rights governance and management structure provides effective oversight of key human rights risks and mitigation strategies

(11) Stockholder proposal regarding a human rights assessment of targeted ad policies and practices (page 89)   AGAINST  

●  Our existing policies are designed to safeguard user privacy and work in tandem with our human rights governance and management structure

●  Through our Privacy Sandbox commitments, we collaborate with regulators and others across the digital advertising ecosystem to improve privacy and test new methodologies

●  We have already updated our Privacy Sandbox initiative to address concerns similar to those raised in this proposal

(12) Stockholder proposal regarding algorithm disclosures (page 92)   AGAINST  

●  We already disclose significant information about our advertising and search policies and procedures and our transparency efforts are informed by multiple frameworks

●  Disclosure of additional details on proprietary algorithmic systems could be used to compromise our operations and the quality of our services

(13) Stockholder proposal regarding a report on alignment of YouTube policies with legislation (page 95)   AGAINST  

●  We already provide significant information about YouTube’s policies and procedures to further our commitment to online safety and have intensified our regulatory readiness initiatives under appropriate senior management and Board oversight

●  We have published a number of substantive disclosures to meet rigorous reporting requirements, and we are transparent about our compliance

(14) Stockholder proposal regarding a content governance report (page 98)   AGAINST  

●  We have appropriate safeguards in place to ensure our policies are designed and enforced in ways that are free from improper bias

●  We devote substantial effort to preventing misuse of our platforms and ensuring content is appropriately provided and supported by effective oversight and transparency on enforcement actions

(15) Stockholder proposal regarding a performance review of the Audit and Compliance Committee (page 101)   AGAINST  

●  Our Board believes that our Audit and Compliance Committee has the requisite experience, skill set, and protocols to conduct the robust risk oversight sought by the proponent, and that a third-party assessment would not result in better direction or performance

(16) Stockholder proposal regarding bylaws amendment (page 103)   AGAINST  

●  We amended our Bylaws in October 2022 following SEC rule changes and careful deliberations by our Board, and the amended Bylaws largely include the advance notice provisions requested by the proponent

 

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Proposal         Alphabet
Board Voting
Recommendation
        Rationale
(17) Stockholder proposal regarding “executives to retain significant stock” (page 105)   AGAINST  

●  Our existing stock ownership guidelines and policies effectively align senior management and stockholder interests, and our executive compensation programs reinforce this alignment

(18) Stockholder proposal regarding equal shareholder voting (page 107)   AGAINST  

●  Our strong governance practices and current capital structure have provided significant long-term stability to the company and have proven beneficial to stockholders through the delivery of exceptional returns over the life of the company

 

Upon receiving an oral or written request, we will promptly provide the address and the number of known voting securities held by the proponents of the stockholder proposals. You may request this information via mail, email, or phone, as follows:

 

   
         
Alphabet Inc.
Attn: Corporate Secretary
1600 Amphitheatre Parkway
Mountain View, California 94043
  Email: corporatesecretary@abc.xyz   (650) 253-3393

 

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Proposal Number 6    Stockholder Proposal Regarding a Lobbying Report

 

United Church Funds has advised us that it intends to submit the proposal set forth below for consideration at our Annual Meeting.

 

Whereas, full disclosure of Alphabet’s lobbying activities and expenditures to assess whether its lobbying is consistent with Alphabet’s expressed goals and stockholders’ best interests.

 

Resolved, stockholders request the preparation of a report, updated annually, disclosing:

 

1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.
2. Payments by Alphabet used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.
3. Description of management’s and the Board’s decision-making process and oversight for making payments described in sections 2 above.

 

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Alphabet is a member.

 

Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.

 

The report shall be presented to the Nominating Committee and posted on Alphabet’s website.

 

Supporting Statement

 

Alphabet spent $105,845,000 on federal lobbying from 2015 – 2021. This does not include state lobbying. Alphabet lobbied in at least 38 states in 2021. Alphabet also lobbies abroad, “being accused of shady lobbying”1 and spending between €6,000,000 – 6,499,999 on lobbying in Europe for 2021.

 

Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity.2 Alphabet lists support of 369 trade associations (TAs), social welfare groups (SWGs) and nonprofits for 2022, yet fails to disclose its payments, or the amounts used for lobbying. Alphabet belongs to the Chamber of Commerce and Business Roundtable, which have spent over $2.1 billion on lobbying since 1998, supports SWGs that lobby like National Taxpayers Union3 and Taxpayers Protection Alliance,4 and funds controversial nonprofits like the Federalist Society5 and Independent Women’s Forum, which “routinely pushes policy positions that are highly favorable to its corporate donors.”6

 

Alphabet’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions or hides payments to SWGs. Alphabet has drawn attention for funding “dark money groups” to oppose antitrust regulation.7 Highlighting dark money risks, utility FirstEnergy was fined $230 million for funneling $60 million through SWG Generation Now in a bribery scandal.8 On company positions, Alphabet believes in addressing climate change, yet the Business Roundtable lobbied against the Inflation Reduction Act.9 And while Alphabet does not belong to the American Legislative Exchange Council, which is attacking so called woke capitalism,10 it is represented by the Chamber, NetChoice and National Taxpayers Union, which all sit on its Private Enterprise Advisory Council.

 

Last year, this proposal received majority support from outside shareholders.

 

 

 

(1) https://www.politico.eu/article/big-tech-companies-face-potential-eu-lobbying-ban/.
(2) https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/.
(3) https://time.com/6182329/the-strange-coalition-in-congress-poised-to-score-a-major-win-against-big-tech/.
(4) https://www.opensecrets.org/news/2021/06/dark-money-groups-battle-efforts-to-limit-big-tech/.
(5) https://www.cnbc.com/2021/01/15/federalist-society-under-fire-after-leader-spoke-at-pro-trump-rally-before-riot.html.
(6) https://theintercept.com/2022/10/01/roe-amazon-google-facebook-independent-womens-forum/.
(7) https://www.opensecrets.org/news/2021/06/dark-money-groups-battle-efforts-to-limit-big-tech/.
(8) https://www.npr.org/2021/07/23/1019567905/an-energy-company-behind-a-major-bribery-scandal-in-ohio-will-pay-a-230-million-.
(9) https://www.theguardian.com/environment/2022/aug/19/top-us-business-lobby-group-climate-action-business-roundtable.
(10) https://www.exposedbycmd.org/2022/07/27/abandoning-free-market-and-liberty-principles-alec-takes-on-woke-capitalism-bodily-aut onomy-and-more-at-its-annual-meeting/.

 

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Alphabet Opposing Statement

 

Our Board, which provides oversight of Google’s corporate political policies and activities, believes that participating in the political process in a transparent manner is an important way to enhance stockholder value and promote good corporate citizenship. Our engagement with policymakers and regulators is guided by a commitment to ensure our participation is open, transparent, and clear to our users, stockholders, and the public.

 

Our Board is committed to transparency in our public policy and lobbying activities. Our transparency efforts were recognized in the 2022 CPA-Zicklin Index of Corporate Political Disclosure and Accountability, and Google’s U.S. Public Policy Transparency website already contains much of the information requested by the proposal. Our Board therefore believes that the report requested by this proposal would not provide substantial additional information to our stockholders and recommends a vote AGAINST this proposal.

 

We Already Provide Transparency and Publish Extensive Lobbying Disclosures

 

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

 

Our governance and management structure, policies, and procedures regarding oversight and compliance of our lobbying and political engagement activities, including a policy prohibiting trade associations and other organizations from using Google funds for political expenditures.
Key issues informing our public policy work and our positions on a range of important issues.
Links to publicly available reports on our federal lobbying activity and NetPAC filings and details of contributions to national committees and organizations, state and local candidates, and other political organizations.
List of trade associations, independent organizations, and other tax-exempt groups that receive the most substantial contributions from Google’s U.S. Government Affairs and Public Policy team.

 

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

 

We Maintain Executive and Board Oversight of Political Engagement

 

Our Board and senior management team oversees our corporate political activity to ensure appropriate policies and practices are in place and that it serves the interest of our stockholders. The Governance Committee reviews Google’s corporate political policies and activities, including expenditures made with corporate funds, Google’s NetPAC contributions, direct corporate contributions to state and local political campaigns, and our policy prohibiting trade associations and other organizations from using Google funds for political expenditures.

 

Google’s U.S. Government Affairs and Public Policy Team interacts with government and elected officials to explain our products and promote innovation and the growth of the web. The Google Vice President who leads this team works directly with Kent Walker, Google’s President for Global Affairs, who reports to Google’s CEO.

 

Google’s Ethics and Business Integrity team ensures compliance with all relevant political laws. The Ethics and Business Integrity team provides training on applicable laws and has implemented approval processes for Google’s political contributions and public reporting of political contributions with Ethics and Business Integrity reviews.

 

Our Practices Are Recognized as Best in Class

 

Our transparency efforts have been recognized in the 2022 CPA-Zicklin Index of Corporate Political Disclosure and Accountability, which has noted Alphabet’s high level of disclosure and named us a “trendsetter” — its highest category — for four consecutive years.

 

Given the depth and breadth of our existing disclosures and frequency of our updates to our stockholders and the public about our public policy activities, our Board does not believe that implementing this proposal would provide additional benefit to our stockholders.

 

Required Vote

 

Approval of the stockholder proposal requires the affirmative FOR vote of the holders of a majority of the voting power of Alphabet’s shares of Class A common stock and Class B common stock present or represented by proxy at the Annual Meeting and entitled to vote thereon, voting together as a single class. Unless marked to the contrary, proxies received will be voted AGAINST the stockholder proposal.

 

Alphabet Recommendation

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE STOCKHOLDER PROPOSAL.

 

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Proposal Number 7    Stockholder Proposal Regarding a Congruency Report

 

The National Center for Public Policy Research has advised us that it intends to submit the proposal set forth below for consideration at our Annual Meeting.

 

Congruency Report of Partnerships with Globalist Organizations

 

Resolved: We request that Alphabet Inc. (the “Company”) publish a report, at reasonable expense, analyzing the congruency of voluntary partnerships with organizations that facilitate collaboration between businesses, governments and NGOs for social and political ends against the Company’s fiduciary duty to shareholders.

 

Supporting Statement:

 

Alphabet does not list the World Economic Forum (WEF), Council on Foreign Relations (CFR), Business Roundtable (BR) or other similar globalist organizations among its partners or as recipients of contributions;1 however, WEF and CFR do list the Company as a partner,2 BR lists CEO Sundar Pichai among its members,3 and Google founders Larry Page and Sergey Brin both graduated from WEF’s “Young Global Leaders” program.4 Why the inconsistency? Why is the Board concealing these partnerships, amongst other similar ones, from shareholders?

 

Alphabet’s legal duty as a Delaware business corporation requires it to first serve the interests of its shareholders.5 Because Alphabet is not a public benefit corporation,6 all additional Company actions and expenditures with third parties must be shown by the Board to be congruent with the interests of shareholders and the Company’s fundamental purpose.

 

However, the agendas of WEF, CFR, BR and other such organizations are antithetical with the Company’s fiduciary duty. This obliges the Board to explain how these partnerships serve the interests of shareholders (rather than Directors).

 

WEF, for example, describes itself as an “international organization for public-private cooperation,” and that it was “founded on the stakeholder theory, which asserts that an organization is accountable to all parts of society.”7

 

Similarly, CFR describes itself as a “membership organization” for both “government officials” and “business executives” on an international scale,8 and BR pretended to redefine “the purpose of a corporation” such that a corporation ought to cater to the special interests of “stakeholders” rather than the fundamental interests of its owners, the shareholders.9

 

Those agendas are incongruent with the interests of Alphabet shareholders and the traditional – and legally binding – definition of a corporation. The more the Board pays favor to hand-picked “stakeholders,” the less it’s accountable to capital-providing shareholders. In partnering and conspiring with WEF and others, then, Alphabet shareholders are funding the efforts designed to debase their own influence as shareholders within the Company.

 

But most importantly, it’s the radical agendas of these organizations that makes partnering with them so troubling, not to mention inconsistent with the values of most shareholders.

 

For example, WEF openly advocates for transhumanism,10 abolishing private property,11 eating bugs,12 social credit systems,13 “The Great Reset,”14 and host of other blatantly Orwellian objectives.

 

Most Alphabet shareholders are unaware (since the Board hides it from them) that their capital is in part being used to pursue this anti-human, anti-freedom agenda. Moreover, none of this is congruent with the Company’s basic purpose of providing value to shareholders by serving customers.

 

 

 

(1) https://www.google.org/our-work/; https://www.google.org/racial-justice/; https://impactchallenge.withgoogle.com/bayarea2021/charities; https://www.google.com/nonprofits/success-stories/; https://impactchallendge.withgoogle.com/womenandgirls2021/organizations; https://www.influencewatch.org/non-profit/google-foundation/; https://blog.google/outreach-initiatives/google-org/giving-2-billion-to-nonprofits-since-2017/; https://sustainability.google/for-partners/partner-stories/; https://abc.xyz/investor#esg-updates
(2) https://www.weforum.org/partners/; https://www.cfr.org/membership/corporate-members
(3) https://www.businessroundtable.org/about-us/members
(4) https://web.archive.org/web/20051029210229/http:/www.younggloballeaders.org/scripts/modules/Profiles/page11265.html; https://web.archive.org/ web/20051029205517/http:/www.younggloballeaders.org/scripts/modules/Profiles/page11251.html
(5) https://law.justia.com/cases/delaware/court-of-chancery/2012/ca-7164-vcn-0.html, et al.
(6) https://delcode.delaware.gov/title8/c001/scl5/index.html
(7) https://www.weforum.org/about/world-economic-forum/
(8) https://www.cfr.org/about
(9) https://www.businessroundtable.org/purposeanniversary
(10) https://www.weforum.org/about/the-fourth-industrial-revolution-by-klaus-schwab
(11) https://web.archive.org/web/20200919112906/https://twitter.corn/wef/status/799632174043561984
(12) https://www.weforum.org/agenda/2021/07/why-we-need-to-give-insects-the-role-they-deserve-in-our-food-systems/
(13) https://www.weforum.org/reports/identity-in-a-digital-world-a-new-chapter-in-the-social-contract
(14) https://www.weforum.org/focus/the-great-reset

 

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Alphabet Opposing Statement

 

Our Board believes that our company’s current approach to partnering with third-party organizations, along with our existing disclosures, appropriately advances the interest of the company and serves the best interests of our stockholders. As publicly stated on Google’s U.S. Public Policy Transparency website, our sponsorship or collaboration with third-party organizations does not reflect an endorsement of their entire agendas. Our Board therefore believes that the report requested by this proposal would not provide useful information to our stockholders and recommends a vote AGAINST this proposal.

 

We Transparently Partner With Organizations to Advance the Best Interests of the Company and Our Stockholders

 

As a public company, we are committed to serving the best interests of our stockholders, which is why we engage on a range of topics with a broad range of organizations on causes that are important to our business.

 

We regularly update Google’s U.S. Public Policy Transparency website to provide a listing of politically engaged trade associations, independent organizations, and other tax-exempt groups that receive the most substantial contributions from Google’s U.S. Government Affairs and Public Policy team, including organizations the proponent incorrectly asserts we have not disclosed, such as Business Roundtable. The Governance Committee helps to shape our overall corporate governance strategy and reviews Google’s corporate political policies and activities, including expenditures made with corporate funds, Google’s NetPAC contributions, direct corporate contributions to state and local political campaigns, and our policy prohibiting trade associations and other organizations from using Google funds for political expenditures and activities.

 

Further, several of our executives have publicly disclosed their participation in discussions facilitated by organizations, like the World Economic Forum, where we have engaged on key issues affecting the company. For example, Kent Walker, Google’s President for Global Affairs, tweeted regarding his participation on a panel discussing the future of technology and digital Europe, and Kate Brandt, Google’s Chief Sustainability Officer, tweeted regarding her participation on panel discussions on climate.

 

Our Participation in Organizations Does Not Reflect an Endorsement of Their Agendas

 

Our engagement with policymakers and regulators is guided by a commitment to ensuring our participation is open, transparent, and clear to our stockholders, users, and the public. We respect the independence and agency of trade associations and third parties to shape their own policy agendas, events, and advocacy positions. Our sponsorship or collaboration with an organization does not mean that we endorse its entire agenda, its events or advocacy positions, or the views of its leaders or members. We prohibit trade associations and other tax-exempt organizations such as 501(c)(4)s from using dues or payments made by us for political expenditures. We inform trade associations and other organizations of this policy by sending an electronic transmittal letter outlining the parameters of our prohibition with every payment we make. To ensure that organizations are abiding by our policy, Google reserves the right to terminate all payments immediately if we find that any portion of our contributions have been used for political expenditures.

 

We believe it is important to be an active participant in organizations to support issues that are important to our business and ultimately to our stockholders, and we remain committed to being transparent regarding that participation. As a result, our Board does not believe that implementing this proposal would be useful for our stockholders.

 

Required Vote

 

Approval of the stockholder proposal requires the affirmative FOR vote of the holders of a majority of the voting power of Alphabet’s shares of Class A common stock and Class B common stock present or represented by proxy at the Annual Meeting and entitled to vote thereon, voting together as a single class. Unless marked to the contrary, proxies received will be voted AGAINST the stockholder proposal.

 

Alphabet Recommendation

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE STOCKHOLDER PROPOSAL.

 

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Proposal Number 8    Stockholder Proposal Regarding a Climate Lobbying Report

 

Boston Trust Walden Company and Zevin Asset Management, as lead filers, and the Benedictine Sisters of Virginia and the Benedictine Sisters of Mount St. Scholastica, as co-filers, along with a number of other co-filers, whose names, addresses, and stockholdings will be provided by us upon request, have advised us that they intend to submit the proposal set forth below for consideration at our Annual Meeting.

 

Whereas: Regular examination of the alignment of lobbying activities (direct and indirect) with corporate public commitments and policies is an increasingly important requirement of strong corporate governance.

 

Resolved: Shareholders request the Alphabet Inc. Board of Directors within the next year conduct an evaluation and issue a report (at reasonable cost, omitting proprietary information) describing its framework for identifying and addressing misalignments between Alphabet’s lobbying (directly and indirectly through trade associations and social welfare and nonprofit organizations) and Alphabet’s commitments to mitigate climate impact and its support of the Paris Agreement, which seeks to limit average global warming to no more than 1.5 degrees Celsius by 2030. The report should include essential elements, such as the criteria used to assess alignment; the strategies used to address any misalignment; and circumstances under which these strategies are implemented.

 

Supporting Statement: Corporate lobbying activities inconsistent with meeting the goals of the Paris Agreement present regulatory, reputational, and legal risks to companies. Such policy engagement also presents systemic risks to economies and markets, as delays in implementation of the Paris Agreement increase the physical risks of climate change, undermine economic stability, and introduce uncertainty and volatility into our investment portfolios. We believe Paris-aligned climate lobbying helps mitigate these risks and contributes positively to the long-term value of companies.

 

Alphabet publicly supports the goals of the Paris Agreement, advocates for specific science-based climate policies, leads investment in carbon-free energy, and maintains a policy for Google advertisers, publishers and YouTube creators “that will prohibit ads for, and monetization of, content that contradicts well-established scientific consensus around the existence and causes of climate change.”1 Alphabet also discloses an extensive list of its memberships in trade associations and policy-focused non-profits.

 

Alphabet does not, however, disclose whether its lobbying practices (directly and indirectly) align with the Paris Agreement’s aims or Alphabet’s own carbon-free energy target, nor company actions to address instances of misalignment.

 

Of particular concern are industry and policy groups that represent business but too often present obstacles to global emissions reductions, and regulation or legislation addressing climate risk. A review of Alphabet’s disclosed memberships2 reveals inconsistencies with Alphabet’s actions on, and commitments to, the Paris Agreement and the prevailing science.345 For example, Alphabet discloses it is a member of the US Chamber of Commerce, which has spent nearly $1.8 billion on federal lobbying since 1998.6 The Chamber lobbied strongly against the Inflation Reduction Act, the most ambitious climate policy in U.S. history.7

 

An alignment assessment can help to identify and address risks presented by misalignment and protect the credibility of Alphabet’s leadership efforts on climate.

 

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. This proposal was introduced with Alphabet last year and earned 55.6% of the outside vote.

 

 

 

(1)  https://support.google.com/google-ads/answer/11221321?hl=en
(2) https://kstatic.googleusercontent.com/files/565eb487f8cf9f96af89a4147ee79eb4cf3989d3c3953197b1e36e65e132b57ffaebccfb03ed62c57b8ffc5cd83654686f6b5160a97d3b561bc65ce5206012e9
(3) https://cei.org/sites/default/files/20170508%20CEI%20Paris%20Treaty%20with%20logos%20-%2044%20Final.pdf
(4) https://www.ae