Alphabet CEO could earn up to $692M under a new pay package linked to Waymo

• Alphabet CEO Sundar Pichai will get a new performance-based equity pay package worth up to $692M.
• The new package ties Pichai's compensation partly to the financial performance of Waymo and Wing.
• Waymo has expanded to 10 markets, marking significant growth for Alphabet's autonomous service.

Alphabet's chief executive just got a new equity pay package that, for the first time, ties a chunk of his payout to Waymo, the company's robotaxi service.

In an SEC filing posted on Friday, the company awarded CEO Sundar Pichai a three-year equity cycle that could be worth up to $692 million if the CEO meets the board's performance targets.

Much of the package remains unchanged from the CEO's 2022 award, according to the filing. The new incentives revolve around the value of two of Alphabet's "Other Bets": Waymo and Wing Aviation, a drone delivery service.

According to the filing, Pichai could be awarded up to $260 million depending on the increase in Waymo's per-unit value over a three-year period, as determined by the compensation committee — essentially, the board's estimate of what a single Waymo equity unit is worth.

The company doesn't list specific operational milestones Pichai will have to reach. A spokesperson for Alphabet declined to comment.

In addition, the company granted the CEO Wing-linked equity units that could be worth up to $90 million, contingent on the company's per-unit value over the next three years.

Tying Pichai's compensation to Waymo and Wing is a signal that Alphabet no longer views the two entities as moonshot experiments but rather as assets representing valuable, scalable businesses

The board said in the filing that "incentivizing Mr. Pichai to focus his efforts on developing and scaling Alphabet's later stage Other Bets, such as Waymo and Wing," is in the best interests of Alphabet and its stakeholders.

Waymo, which began as a project inside Google's moonshot factory in 2009, has driven over 200 million autonomous miles to date. This year, the company expanded its commercial service to 10 markets, serving riders in Dallas, Houston, San Antonio, and Orlando.

Wing is another moonshot factory venture that began in 2012. The company, which provides last-mile drone delivery services, became an independent Alphabet subsidiary in 2018. Wing announced in January that it would expand to more than 270 Walmart stores by 2027.

Pichai maintains a base salary of $2 million, unchanged since 2020, and will be awarded performance stock units (PSUs) tied to Alphabet's total shareholder returns relative to the S&P 100. The max value of the PSUs could be worth up to $252 million.

There's also a time-based equity package that will award Pichai $84 million, provided he stays with the company for the next three years.