Employee Compensation and Benefits: Alphabet (Google)

1. What can you glean from publicly available information about the company’s fixed
   pay compensation? (If the company does not offer publicly available pay
   information, look at employee review sites like Glassdoor.com to get a sense of pay
   information.) If you were in charge of Human Resources and Workforce
   Management for the company you selected, how would you approach a fixed pay
   strategy? Identify at least one thing you would change about the way the company is
   doing things now.
   Alphabet Inc., Google’s parent company, is undeniably one of the largest publicly traded
   companies in the world. Besides Google, Alphabet owns multiple other companies, among
   others, including X, Calico, GV, Verily Life Sciences, Waze, Looker, Fitbit, Mandiant, YouTube,
   and DoubleClick. Similar to most American technology conglomerates like Apple and Meta,
   Apple’s head offices are found in “Silicon Valley,” Mountain View, California. Alphabet is one of
   the world’s most valuable companies and the globe’s 3 rd -largest tech firm by revenue ($282.8
   billion in 2022) (Macrotrends, n.d.). It is one of the ‘Big Five’ US information technology firms,
   alongside Microsoft, Meta, Apple, and Amazon. As of June 2023, Alphabet is estimated to have
   over 181,798 employees globally.
   As one of the leading tech giants globally, Alphabet understands the importance of giving
   its employees the top dollar to attract and retain the industry’s crème de la crème. Although
   Alphabet has not published its salaries (base pay) on its official website or government domains,
   career and job review websites like Zippia.com report that the company’s average salary (fixed
   pay) is roughly $58,794 annually or $28.27 per hour. These figures are, however, estimates
   because random and unverified individuals provide the reviews and ratings. For entry-level

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employees (1-3 years), salaries range between $28,000 to $121,000. For experienced workers
(three years and beyond), the salaries range between $31,805 per year (receptionist secretary)
and $191,715 (director). The top five paying jobs include director ($191,715 annually or $92.17
per hour), producer ($133,495 or $64.18), plant engineer ($131,025 or $62.99), actor ($128,669
or $61.86), and software engineer ($124,806 or $60.00) (Zippia, n.d.).
Another website, Glassdoor.com, estimates that the lowest salary at Alphabet ranges
between $32K and $48K annually (floor sweeper), while the highest is between $175K and
$266K per year (director of product design). Other top earners include software engineer ($133k-
$198k), senior product manager ($155k-$299k), staff engineer ($149k-$2555k), and product
manager ($127k-$205k) (Glassdoor, n.d.). However, credible sources indicate that Google,
Alphabet’s primary company, has the highest median income ($295,884) compared to other tech
giants like Meta, Microsoft, and Amazon (Kelly, 2022).
For large tech companies like Alphabet that constantly depend on employee creativity and
innovation and hiring/retaining top talent (software engineers and other skilled labor), having a
fixed pay structure (salaries and allowances, such as transport, childcare, and housing) is more
than necessary and critical for keeping employees motivated, curbing attrition and turnover, and
complying with local laws, such as America’s Fair Labor Standards Act (FLSA). If I were in
charge of Alphabet’s HR and workforce management, I would approach the fixed pay strategy in
several steps. I would conduct thorough market research to benchmark what other tech
companies like Apple, Facebook, Amazon, and Microsoft are paying their staff for specific job
roles/titles, for example, software engineer or product engineer. This should be regularly done to
understand industry rates and standards.

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Secondly, I would conduct a thorough job evaluation across the entire company to establish
the value of the various job titles and responsibilities. The next step is to create job levels and
grades based on factors like employee educational level, responsibilities, experience, and
expertise/skills. Thirdly, I would review the laws and regulations that govern employee
compensation within each jurisdiction and territory, such as the FLSA. This is vital in getting a
rough idea of legislative provisions like the minimum hourly wage allowed within each state or
country. The final step is to develop competitive salaries or base pay for employees based on
these three factors (employee roles/experience/performance/educational level, market standards,
and state/federal legislation). As Alphabet’s HR manager, reviewing and adjusting employee
salaries regularly (biannually) is necessary to align with changing legislation, market trends,
company performance, and economic conditions.
As Alphabet’s new HR manager, I would cut employee salaries to match what competitors
like Amazon, Meta, Apple, and Microsoft are paying. Benchmarking industry rates is critical for
the company’s health. Google, Alphabet’s primary company, reportedly has the highest median
salary ($295,884), a figure that is 70% higher than Microsoft’s and 153% more than the average
20 largest US tech firms (Kelly, 2022). Matching salaries with competitors can reduce
operational costs and guarantee financial health in the long term.

2. What can you glean from publicly available information about the company’s
   variable pay compensation? Does the company advertise offering bonuses,
   commissions, or any other type of gainsharing to any of its employees? (Again, if the
   company does not offer publicly available pay information, you might look at
   employee review sites like Glassdoor.com to get a sense of pay information.) If you
   were in charge of Human Resources and Workforce Management for the company

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you selected, how would you approach a variable pay strategy? Identify at least one
thing you would change about the way the company is doing things now.
Alphabet has a comprehensive variable pay plan that includes bonuses and stock options
for certain groups of employees. Starting Oct 19, 2021, the company announced an all-inclusive
bonus plan for all employees globally. The bonus plan specifically targets rewarding staff for
their individual and team performance and contribution to the company’s success or that of its
affiliates. Eligibility criteria require that (1) an employee must have served the firm as a ‘regular
employee’ and must employed by the firm on the last day of performance duration, (2) the
employee must be serving the company as an agent, consultant, independent contractor, intern, or
temporary employee under an oral or written contract our purchase order, (3) the employee must
not take part in the sales bonus plan, and (4) and the individual must follow the firm’s established
code of conduct and other standards of business practice (Securities and Exchange Commission,
n.d.).
The bonus award must be issued by 2.5 months after the end of the financial year in which
the pertinent performance period ends. The bonus plan also applies in the event of disability or
death. In case an employee is disabled or dies before receiving their benefits but has met the
eligibility criteria, the bonus is renumerated to their beneficiary pursuant, estate, or authorized
person under applicable legislation. Therefore, participants are usually required to name their
beneficiaries to receive their bonus payments in case of death or disability. Alphabet’s Google
allegedly pays more bonuses than other tech giants like Microsoft. A leaked report has revealed
that software engineers earned the highest bonuses in 2022; the highest bonus was around
$605,000. A data scientist took home approximately $326,00, while a program manager earned
$125,000 in bonuses (Krietzberg, 2023).

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Alphabet also has a comprehensive stock plan for its employees; this applies to all workers
on a global scale. The plan was announced in 2021 and primarily intended to enhance Alphabet
and its stockholders’ interest by offering employees, consultants, and the Board of Directors
rewards and incentives to inspire them to continue serving the company, plus to ensure the long-
term financial success, growth, and profitability of the firm. The maximum number of stock or
shares that the incentive awards must not exceed 60,010,002 aggregate shares. Persons eligible
for stock rewards include (1) company employees and consultants and (b) members of the Board
of Directors. Eligible members can receive stock-based and cash-based awards; the aggregate
award cannot, however, exceed $1,500,000 as determined by the stock’s market value during
issuance (Securities and Exchange Commission, 2021). Google’s stock options are in the form of
restricted stock units. In 2022, the highest stock reward was approximately worth $1.5 million.
The highest-paid research scientist and software engineer each received over $600,00 in equity
(Krietzberg, 2023). Google’s CEO, Sundar Pichai, is an exception, as he was awarded $218
million in stock in 2022 via a triennial stock grant (Kim, 2023).
If I were in charge of Alphabet’s HR and workforce management, I would develop a
variable pay strategic plan that considers multiple factors, including equity and fairness, the
company’s overall strategic objectives and goals, market and industry patterns/trends, employee
factors (educational level, experience, responsibilities/roles, and performance/output), and
transparency in communicating the variable pay structure and the formula used. I would also
create a comprehensive variable pay program that incorporates profit sharing, gainsharing, non-
monetary performance rewards and recognitions (gift cards), team-based rewards, and retention
payouts/bonuses. As it stands, Alphabet’s approach is biased, as certain employees, such as
software engineers, receive a significantly large number of stocks. One area I would consider

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changing is communication and transparency. Like most large companies, Alphabet is reticent to
communicate the bonuses awarded to employees (including the formula used in making
estimates) by job category or geographical location. Transparency can build trust in the
administration and company.

3. Based on the company’s total rewards compensation strategy (i.e., looking at
   information on pay, healthcare benefits, retirement programs, etc.), what do you
   think are the most expensive components of employee costs for the company? Are
   any significantly more expensive than the average paid by other companies? If you
   were in charge of Human Resources and Workforce Management for the company
   you selected, how would you approach employee cost control? Identify at least one
   thing you would change about the way the company is doing things now.
   Admittedly, employee salaries (base pay + bonus) are the most expensive cost outlays for
   Alphabet. It is significantly higher than other compensations issues by the company, among
   others, including commissions, health insurance payments, stock/equity options, performance-
   based incentives (gainsharing or profit-sharing), health and wellness program benefits, 401(k)
   and other retirement plans, educational scholarships, severance packages, discounts/perks, non-
   monetary rewards and recognition, and employee assistance programs. For example, Alphabet
   pays employees roughly $23.552 billion in total ($129,554 × 181,798), taking $129,554 as the
   average employee earnings (base + bonus) and 181,798 as the current number of employees
   (Comparably, n.d.). In comparison, the firm issued stock-based compensation worth $15.376
   billion in 2021 (Macrotrends, 2023). This figure is bloated because it includes payments to
   stockholders. Employee salaries are also substantially higher than the expected severance

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package of between $1.9 billion and $2.3 billion Alphabet is expected to spend for laying off
over 12,000 employees (Confino, 2023).
Going by recent reports, Alphabet’s salaries (base pay + bonuses) are significantly higher
than those of its competitors, especially America’s Top Five tech firms, including Meta
(Facebook), Apple, Microsoft, and Amazon. Forbes reports that the median salary for an
Alphabet worker in 2022 was roughly $295,884, based on reports filed with the US Securities
and Exchange Commission. This figure was 70% higher than what Microsoft paid its staff and
153% more than what the 20 largest competitors paid their employees (Kelly, 2023). A recent
survey by the Wall Street Journal has also placed Alphabet as the third highest-paying company,
with a median salary of $280,000, just one spot below Meta ($300,000) and Vici Properties
($415,000). The survey compared the median salaries of 278 S&P 500 companies. Vici, a real
estate investment trust fund, is an isolated case because it has only 22 employees (Kanetkar,
2023). The report further ranked Sundar Pichai, Alphabet’s CEO, as the highest-grossing
executive, with a salary of $226 million, 808 times higher than the firm’s median salary. In
comparison, Mark Zuckerberg, Facebook’s chief, took home only $28 million – 9 times less than
Pichai and 91 times higher than Meta’s media salary (Kanetkar, 2023).
If I were Alphabet’s HR and workforce manager, I would approach the company’s
skyrocketing employee costs as a major problem to the company’s operational efficiency, growth,
and health in the long term. My first goal would be to cut on the number of employees by
consolidating redundant roles and outsourcing others. Having 181,798 employees on the roaster,
each receiving an average of $129,554 annually, is too much for Alphabet to bear in the future,
especially considering competitors like Microsoft are cutting their employees and wage bills and,
thus, operating efficiently. Therefore, the first step is to conduct a thorough audit of the

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organization, including all roles/positions, performance, educational levels, employee
experience, and current salaries. The second step is to benchmark the total benefits (salaries,
bonuses, commissions, stock options, and other non-monetary benefits) competitors are offering
their workers. Benchmarking market trends and standards can assist in aligning Alphabet’s
salaries and benefits with industry levels. Thirdly, I would consider the state and federal laws of
each state or country before deciding the final compensation figures. All these factors can ensure
that employee salaries and rewards comply with fair labor laws, align with industry standards,
and meet staff needs and expectations. Therefore, the first thing I would change about Alphabet’s
current strategy is the bloated wage bill. This requires laying off a few employees or
consolidating functions/roles and cutting salaries and bonuses.

4. What, if anything, can you glean from publicly available information about the way
   in which the union(s) operating within the company effect employee pay and
   benefits? Do the union(s) have a strong membership and presence? Do they appear
   to wield a significant amount of power? Based on where the company operates (i.e.
   which states), do you think Right to Work laws are affecting union leverage within
   the company? If you were in charge of Human Resources and Workforce
   Management for the company you selected, how would you approach union
   partnership and negotiations? Identify at least one thing you would change about
   the way the company is doing things now.
   The right to unionize has been a farfetched privilege for most employees of American tech
   conglomerates (Alphabet, Amazon, Meta, and Microsoft) and other large firms in the S&P 500
   list. While other firms continue to deny workers the right to join unions, the creation of the
   Alphabet Workers Union (AWU), formerly called Google Union, on January 4, 2021, paved the

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way for Alphabet workers to unionize. The union is still in its infancy, with only 1,400+
members as of December 2023. It is often labeled a solidary and minority union by experts
because it has not been registered by the US National Labor Rights Board, meaning it cannot
participate in collective bargaining. The union’s core purpose is to give its employees –
temporary workers, full-time employees, contractors, and vendors – a voice and power to lobby
for equal pay and treatment, a favorable and safe work environment, and protection from
workplace retaliation, discrimination, bigotry, and harassment. It promotes socioeconomic justice
in society, community, and the workplace and encourages democracy and solidarity.
Admittedly, AWU lacks strong membership and presence, considering that it has only
1,400 members out of the possible 181,798 Alphabet employees globally. This limits the union’s
ability to wield enough power to impact change compared to Alphabet’s might and financial
muscle. Despite its small membership compared to other unions, AWU is actively engaged in
fighting for pay parity for its members (temps, vendors, and contractors), a safe working
environment for its members, job security for Alphabet workers amidst artificial intelligence
(AI) rise, and other employee rights (Alphabet Workers Union, n.d.).
`Despite its size, the union has been able to win small battles against Google and other
affiliate companies. For example, the union has played a critical role in ending ‘Caste’ inequity
and discrimination at Google. In response, Google announced an external speaker policy to
address concerns raised by AWU and other staff. The new policy specifically targets to block
speakers in the future from undercutting and disrespecting the culture of inclusivity at Google.
The policy announcement follows discontent raised by employees about a talk by Malhotra
Rajiv, a far-right individual of Hindutva origin famed for encouraging violent and caste-
supremacist views against minority groups. The company has also helped thousands of Google

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contract employees win back thousands of dollars owed to them in back pay by Artech, one of
Google’s main subcontractors. Google workers discovered a disparity/inequity between the
money paid to Artech staff by Accenture and their pay stubs. Lack of transparency and honesty is
one of the most rampant issues affecting most Alphabet contract workers, vendors, and
temporary employees. With the help of AWU, over thirteen workers have received back pay of
over $50,000 each (Alphabet Workers Union, n.d.). The right-to-work laws do not significantly
impact AWU union leverage. For example, the Taft-Hatley Act, which outlines the “closed-shop”
condition, does not affect AWU. Alphabet does not require employees to join AWU as a
condition for employment.
Finally, if I were Alphabet’s HR and workforce manager, I would approach union
partnership and negotiations by encouraging open communication between the management and
the labor unions. The goal is to encourage open dialogue with employees and their unions
through round-table meetings and other communication channels. I would also strive to
understand employee priorities and concerns by collecting their feedback regularly and
conducting surveys. This would allow me to acknowledge and emphasize their concerns. It is
also a critical factor in finding common ground during negotiations. During negotiations, I will
focus on following the law and upholding employee rights, equity, and fairness. One aspect I
would change in Alphabet’s current approach is employee involvement in the negotiation
process. The company has, many times, ignored the plight of employees and, to some extent,
even failed to acknowledge their labor union.

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References

Alphabet Workers Union. (n.d.). Our campaigns. https://www.alphabetworkersunion.org/our-
campaigns
Comparably. (n.d.). Alphabet Inc. salaries. https://www.comparably.com/companies/alphabet-
inc/salaries
Confino, P. (2023, Feb 13). Layoffs cost companies billions—here’s how much Amazon,
Alphabet, Microsoft, and 7 other companies spent per employee. Fortune.
https://fortune.com/2023/02/13/layoffs-cost-companies-billions-heres-how-much-
amazon-alphabet-microsoft-spent-per-employee/
Glassdoor. (n.d.). Alphabet (GB) salaries. https://www.glassdoor.com/Salary/Alphabet-GB-
Salaries-E764177_P1.htm
Kanetkar, R. (2023, June 19). Despite their mass layoffs, Alphabet and Meta were among the
top-paying big companies in 2022, according to analysis in the Wall Street Journal.
Business Insider. https://africa.businessinsider.com/careers/despite-their-mass-
layoffs-alphabet-and-meta-were-among-the-top-paying-big-companies/rwdbxet
Kelly, J. (2022, Nov 21). Alphabet seeks to identify 10,000 poor-performing Googlers as activist
investor calls to cut staff. Forbes.
https://www.forbes.com/sites/jackkelly/2022/11/21/alphabet-seeks-to-cut-10000-poor-
performing-googlers/?sh=5e768422704b
Kim, H. (2023, Apr 22). Alphabet CEO Sundar Pichai’s compensation topped $200 million in

2022. CNBC. https://www.cnbc.com/2023/04/22/alphabet-ceo-sundar-pichais-
      compensation-topped-200-million-in-2022.html

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Krietzberg, I. (2023). See the leaked Google data that reveals salaries, bonuses, and more. The
Street. https://www.thestreet.com/technology/leaked-google-salaries-bonuses
Macrotrends. (2023). Alphabet stock-based compensation 2010-2023.
https://www.macrotrends.net/stocks/charts/GOOG/alphabet/stock-based-compensation
Macrotrends. (n.d.). Alphabet revenue 2010-2023.
https://www.macrotrends.net/stocks/charts/GOOG/alphabet/revenue
Securities and Exchange Commission. (2021). Alphabet Inc. 2021 stock plan.
https://www.sec.gov/Archives/edgar/data/1652044/000119312521182989/d177913dex1001.htm
Securities and Exchange Commission. (n.d.). Alphabet Inc. company bonus plan.
https://www.sec.gov/Archives/edgar/data/1652044/000165204422000019/googexhibit1008q420
21.htm
Zippia. (n.d.). Alphabet salaries. https://www.zippia.com/alphabet-careers-454/salary/