Google Gets Its CFO. He Gets His Payday.

Erick Schonfeld

After looking for a nearly a year,
Google has finally found a new chief financial officer to replace
outgoing CFO George Reyes. So who’s job will it be to count all of
Google’s cash? The lucky winner
of what must have been one of the most intense executive searches of
the year is Patrick Pichette, the president of operations at Bell
Canada.

Google went with a relative unknown here, but Pichette (a Rhodes
Scholar and former McKinsey consultant) must have done well on the
brain teasers Google famously asks all incoming employees. Pichette
will be counting some of his own cash. At today’s stock price of $532,
Pichette is looking at $1.7 million just in restricted stock a year
from now. Add a $500,000 signing bonus, plus the
here’s-another-$500,000-for sticking-around-six–whole-months bonus,
plus his $450,000 base salary, plus another regular bonus of
as much as $1.125 million and the total comes to $4.3 million. And that
is not even counting the stock options. (In comparison, last year
George Reyes brought home $5.1 million in total compensation. Sergey
Brin, Larry Page, and Eric Schmidt each receive $1 in base salary,
although Schmidt’s personal security detail cost the company $475,000
last year and is listed as part of his total comp).

The compensation details outlined in Pichette’s offer letter are the following:

—Patrick’s annual base salary will be $450,000 and his
discretionary target bonus percentage will be 150% of his annual base
salary.

—Google has agreed to pay Patrick a special one-time sign-on bonus of $500,000 (taxed as supplemental income).

—Google has agreed to pay Patrick an additional special bonus of
$500,000 (taxed as supplemental income) upon completion of six months
of employment. In the event that Patrick’s employment is terminated by
Google prior to the end of this six-month period, this additional bonus
will be paid out in full within 30 days from the date of termination.

—If Patrick terminates his employment with Google before the one
year anniversary of his start date then Patrick will be required to
repay the special bonus amounts described above, prorated for time
spent at Google.

Google has agreed to grant Patrick four new hire equity grants:

— stock option to purchase 11,112 shares of the Google’s Class A
common stock pursuant to Google’s 2004 Stock Plan. The stock option
will vest at a rate of 25% on the date one year after Patrick commences
employment and will vest an additional 2.083% each month thereafter,
for a total vesting period of 48 months.

—5,556 Google restricted stock units (GSUs) pursuant to Google’s
2004 Stock Plan. The GSUs will vest at a rate of 25% on the date one
year after Patrick commences employment and will vest an additional 25%
each year thereafter, for a total vesting period of four years.

—910 GSUs pursuant to Google’s 2004 Stock Plan. The GSUs will vest
at a rate of 100% on the date six months after Patrick commences
employment. In the event Patrick’s employment is terminated (other than
as a result of Patrick’s resignation) prior to the six month vesting
date, this GSU grant will immediately vest.

—910 GSUs pursuant to Google’s 2004 Stock Plan. The GSUs will vest
at a rate of 100% on the date 12 months after Patrick commences
employment. In the event Patrick’s employment is terminated (other than
as a result of Patrick’s resignation) after six months but prior to the
12 month vesting date, this GSU grant will immediately vest.

Google will assist Patrick with relocation-related expenses pursuant
to Google’s policy with respect to the relocation of officers in North
America.

In accordance with Google’s standard equity grant policies,
Patrick’s options and GSUs will be granted on the first Wednesday after
Patrick commences employment with Google.

Patrick will also participate in the compensation and benefit programs generally available to Google’s executive officers.