Google staff want executive pay to be linked to diversity

Employees of Google Alphabet Inc. are joining investors in an effort to link executive pay to progress in workplace diversity.

Google staff want executive pay to be linked to diversity

A member of the web search giant’s staff will present a proposal at Wednesday’s annual shareholders’ meeting in Mountain View, Calif., according to Zevin Asset Management, who presented the measure. They are requesting that Alphabet consider related metrics in incentive plans, with a focus on diversity and inclusion in the workforce.

Criticism has grown internally that executives are not doing enough to address workplace harassment, said Liz Fong-Jones, an engineer who has backed a petition to create better policies and procedures. Those concerns came to the fore after another engineer, James Damore, wrote a 3,000-word memo that attacks the company’s affirmative action policies and suggests that women are less biologically qualified than men for technology jobs. He was fired and sued Alphabet for wrongful termination. In a separate lawsuit last year, the company was accused of paying women less than men.

“Executives can be motivated by money,” Fong-Jones said. “There needs to be a clear signal from shareholders that they value inclusion.

Typically, Alphabet investors attending shareholder meetings present proposals on a variety of issues, from payment to environmentalism to the company’s political positions. Executives listen to them and then vote in favour of the proposals, showing that the company is still strongly controlled by its founders.

But this year, executives are more attuned to complaints, especially from employees. Last week, staff announced that they were withdrawing from a Pentagon cloud deal after sustained internal protests. Google CEO Sundar Pichai is preparing an ethics charter for his artificial intelligence teams this week, in part to allay the concerns of his staff.

Still, Zevin’s proposal has little chance of passing, given that Google’s multi-millionaire co-founders Larry Page and Sergey Brin have more than half the voting power. Opposing the plan, the company said in a document that it will not “improve Alphabet’s existing commitment to corporate sustainability,” noting that Page collects a salary of only $1. A spokesman said the firm had no further comments beyond the statement in the presentation.

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Institutional Shareholder Services Inc. and Glass Lewis & Co. are divided. ISS supports the proposal and opposes the nominations of compensation committee members L. John Doerr and K. Ram Shriram “due to maladministration” and “lack of performance-related compensation”. Glass Lewis said she believes the company already considers such initiatives in its business decisions.

The other top executives of Alphabet receive salaries, benefits and participate in the company’s incentive plans. Over the past three years, Pichai and Chief Financial Officer Ruth Porat have received reported payments of $302 million and $70.8 million, respectively, the majority of the stock grants. These awards do not include performance metrics.

While technology companies are only leaders in this area, some are more committed than others. Microsoft Corp. has about 17 percent of the annual bonuses related to culture and organizational leadership goals, including promoting diversity. The annual Intel Corp. are linked in part to diversity-based recruitment and retention targets. And Qualcomm Inc. and International Business Machines Corp. mention inclusion considerations in their qualitative assessments of the salaries of their executives.

Investors are concerned about environmental, social and governance issues, said Andy Jack, a partner at Covington & Burling LLP in Washington, where he is co-chairman of the clean energy and climate industry group of a law firm.

“Board and compensation committees are encouraged to review their company’s published ESG objectives, understand how the objectives relate to the company’s overall business strategy and reflect on whether compensation programs should incorporate specific incentives to promote the achievement of ESG’s objectives,” Jack said.