Google Inc. (GOOG) Chairman Eric Schmidt was paid $101 million last year, including stock awards and options that vest over a four-year period, as he turned over control of the company to co-founder Larry Page.
Schmidt, who was paid $313,219 in 2010, received $55.6 million in share awards and $38.1 million in options, the Mountain View, California-based company said yesterday in a regulatory filing. The remaining $7.2 million came from Schmidt’s $937,500 salary and other compensation.
Schmidt, 56, who was named CEO in 2001, stepped down a year ago, putting Page back in charge of the world’s largest Internet search engine. Page and co-founder Sergey Brin, Google’s largest shareholders, were each paid $1 last year, part of a plan put in place in 2004. While shareholders should monitor to ensure Schmidt’s incentives are in line with the company’s goals, his pay shouldn’t be seen as reward just for 2011, said David Larcker, a corporate governance professor at Stanford’s Graduate School of Business.
“It’s a big enough number that it would get your attention, and it’s appropriate for shareholders to ask why it’s that big,” Larcker said in an interview. “You’d want to feel pretty comfortable that that corresponds with his new position, the new things he wants to do. But this is a multiyear grant -- it’s not like you’re going to see this every year.”
Schmidt was granted the equity awards with a target value of $100 million in connection with his transition last year to executive chairman, according to the filing. The awards will vest over a four-year period with no performance requirements, the filing said.
“That kind of volatility in pay over time is unusual,” Larcker said. “But the awards of stock and stock options, those are expected values -- they could go up or down.”
Niki Fenwick, a Google spokeswoman, declined to comment.
Apple Inc. (AAPL) Chief Executive Officer Tim Cook also got a compensation package that vests over time. Cook will receive pay for 2011 worth $378 million, one of the biggest packages on record. That includes $376.2 million in shares, half of which will vest in five years and the remaining amount in 10 years, Cupertino, California-based Apple said in January.
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