Google Inc. (GOOG) said Monday that it has approved equity awards worth $100 million to outgoing chief executive officer Eric Schmidt. The Internet search giant, in an unexpected management shake-up last Thursday, appointed co-founder Larry Page as CEO, replacing Schmidt.
Schmidt, aged 55 years, will assume the role of Google's executive chairman in April, focusing externally on deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership. Internally, he will continue to act as an advisor to Larry Page and Sergey Brin, Google's other co-founder.
Schmidt joined Google in 2001 as its CEO from Novell, where he served as the chairman and CEO. He is a member of President Obama's Council of Advisors on Science and Technology.
In a filing with the U.S. Securities and Exchange Commission, Google said that Schmidt will be granted stock options and units in the ratio of two stock options for each stock unit, resulting in a grant value of about $55.6 million and an option grant value of about $44.4 million. The equity awards will be granted on February 2, 2011 and will vest over a period of four years, the company noted.
In an earlier filing last week, Google said that Schmidt adopted a stock trading plan on December 9, under which he will begin selling a portion of his Google stock. The company noted that the pre-arranged trading plan was adopted so as to allow Schmidt to sell a portion of his Google stock as part of his long-term strategy for individual asset diversification and liquidity.
Under the terms of the trading plan, Schmidt plans to sell about 534,000 shares of Google's Class A common stock, valued at $326.72 million based on Friday's closing stock price of $611.83. Schmidt held about 9.2 million shares of Google Class A and Class B common stock as at December 31, 2010. This represents about 2.9 percent of Google's outstanding capital stock and about 9.6 percent of the voting power of the company's outstanding capital stock.
Google noted that if Schmidt completed all the planned sales under the trading plan, he would continue to own about 8.7 million shares, representing approximately 2.7 percent of Google's outstanding capital stock and about 9.1 percent of the voting power of the outstanding capital stock.
Schmidt and Google's co-founders had been receiving an annual salary of $1 each for the past few years. Schmidt received total compensation for 2009 that was down 52 percent from the preceding year as Google grappled with the recession.
Media reports in November 2010 said that Google decided to give a 10 percent pay rise to about 23,000 of its employees at the beginning of this year. The company also reportedly gave all its employees a $1,000 holiday bonus.
In Monday's regular trading session, GOOG is trading at $604.80, down $6.88 or 1.15% on a volume of 1.02 million shares. The stock has been trading in a range of $433.63-$642.96 in the past 52 weeks.
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