Google plans to start paying non-employee directors on its board in cash, just after tossing them a hefty restricted stock award.
In a filing with the SEC Friday, Google revealed that it will be breaking with tradition by deciding to pay directors not employed by the company $75,000 a year in cash and $350,000 a year in restricted stock grants. In addition, those non-employee board members (John Doerr, John Hennessey, Arthur Levinson, Paul Otellini, Ram Shriram, Ann Mather, and Shirley Tilghman) will also receive a one-time stock award worth $500,000, though Mather and Tilghman will have to wait awhile to participate in the new compensation plan because their previous stock awards have not fully vested.
"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 representative said in a statement.
Google used to merely "reimburse our directors for reasonable expenses in connection with attendance at board of directors and committee meetings," according to its 2009 proxy statement, but like most companies has also awarded stock to directors who don't otherwise work for the company. However, with several longtime board members in place who are no longer seeing meteoric rises in Google's stock, it seems the company decided to sweeten the pot with guaranteed money.
Google Chairman Eric Schmidt, however, was used to working without compensation during his three-year stint on Apple's board of directors, which ended this week. Schmidt received all kinds of Apple gear and a "commemorative gift" while on the board, according to Business Week, but was not paid for his services at Apple in either cash or stock.