Google-parent Alphabet Inc on Thursday approved the plan to link more of Chief Executive Officer Sundar Pichai pay to performance, news agency Reuters reported. The new equity award comes as the board recognises Pichai's "strong performance" as CEO.

Share Market Live

NSE

Alphabet said that the vesting of a significant portion of the new equity award to the CEO’s pay would depend on the firm’s total shareholder return relative to other S&P 100 companies.

Alphabet said the award was changed to raise the performance stock units (PSUs) to 60 percent from 43 percent in 2019, while increasing the performance requirement for the payout.

Pichai gets the equity award every three years. He was granted two tranches of PSUs with a target value of $63 million each. He was also given a grant of $84 million in the form of Alphabet's restricted stock units.

Also Read | Google for India: Sundar Pichai speaks on India's need for a balanced and open internet

The development comes amid reports that Google may let go of 10,000 employees as low performers in terms of their impact on the business in early 2020. Though the firm has not confirmed the layoffs yet, earlier this month Pichai had said that it's "tough to predict the future" when asked about layoffs in the company.

According to reports, Pichai has said Google was making changes to "better weather the storm" of the economy, but he wouldn't rule out cuts. Managers were also asked to identify only the 2 percent of the lowest-performing employees.

The new system was reportedly announced in broad terms. As per the new system, the percentage of employees who can score a high rating has been reduced.

The instruction came after Hedge fund billionaire Christopher Hohn argued that Google's employees were paid higher compared to other digital companies. The billionaire also believes the company's headcount is "excessive" in comparison to historical hiring patterns and does not meet the requirements of the present business environment.

Also Read: India is a part of me, says Google and Alphabet CEO Sundar Pichai