14 DAY TRIAL // Google has decided to start paying non-employee members of its board of directors in cash after already granting them a sizable chunk of restricted stock. The company revealed in a regulatory SEC filing that the members would receive $75,000 per year in cash and $350,000 in restricted stock grants. In addition the non-employee members will also receive a one-time grant of $500,000 in Google Stock Units.
"Our directors who are fully vested are functionally not being compensated. In order to continue providing them appropriate compensation, we've put in place a traditional compensation structure similar to that used by many of our peers," a Google spokesperson said in a statement.
This is a break from the current system, as Google doesn't offer any regular compensation apart from covering the costs associated with travel and other expenses that the directors have to make in order to attend board or committee meetings. The company has also rewarded its board members who don't work for it with stock; however, with the current economic conditions and with Google share prices flattening, the Internet giant has decided to guarantee them a yearly payment though still mostly in stock.
Most of the non-employee directors – John Doerr, John Hennessey, Arthur Levinson, Paul Otellini, and Ram Shriram – will receive their one-time $500,000 worth of Google shares on the first Wednesday of the month following the date of the approval of the new compensations, which was August 5. Ann Mather and Shirley Tilghman, however, will have to wait until their previous grants will have fully vested before receiving the new payments.
After receiving these one-time payments the members will start getting the yearly compensations of $75,000 in cash and $350,000 in Google Stock Unit. These stock options are in fact restricted shares that take four years to vest but which have a guaranteed value even if the share price for regular stock drops.