Form 4: Alphabet Inc. Executive Prabhakar Raghavan Reports Stock Transactions Following Performance-Based Vesting

Alphabet Inc.'s Senior Vice President, Prabhakar Raghavan, acquired 194,200 shares of Class C Capital Stock due to performance-based vesting, while also disposing of 98,050 shares to cover tax obligations.

Summary

• Prabhakar Raghavan, a Senior Vice President at Alphabet Inc., reported transactions involving Class C Capital Stock.
• On February 7, 2024, Mr. Raghavan acquired 194,200 shares of Class C Capital Stock as a result of performance stock units (PSUs) vesting.
• These PSUs were granted on April 7, 2021, and vested based on Alphabet's total shareholder return (TSR) relative to S&P 100 companies over a three-year period ending December 31, 2023.
• Alphabet's TSR of 60.19% placed it at the 79.80th percentile, resulting in a maximum payout of 200% of the target PSU award.
• Concurrently, 98,050 shares were disposed of at a price of $145.41 per share to satisfy tax obligations related to the vesting of the PSUs.
• Mr. Raghavan also holds 243,135 shares indirectly through the Raghavan Living Trust, as well as 52,640 and 144,179 Class C Google Stock Units (GSUs) that vest over time.

Sentiment

Score: 7

Explanation: The document reflects positive performance leading to vesting of stock units, but also includes a sale of shares for tax purposes. Overall, the sentiment is moderately positive.

Positives

• The vesting of performance stock units indicates that Alphabet's performance met or exceeded the 75th percentile target, resulting in a maximum payout for Mr. Raghavan.
• The high TSR of 60.19% demonstrates strong performance relative to the S&P 100 companies.

Negatives

• The disposal of 98,050 shares to cover tax obligations resulted in a reduction of Mr. Raghavan's direct holdings.

Risks

• Future vesting of stock units is contingent on continued employment.
• The value of the stock units is subject to market fluctuations.

Future Outlook

Future vesting of stock units is contingent on continued employment and will occur quarterly.

Industry Context

This filing is a routine disclosure of stock transactions by a company executive, which is common practice for publicly traded companies. The performance-based vesting is a typical incentive structure used to align executive compensation with company performance.

Comparison to Industry Standards

• Performance-based equity awards are a common practice among large technology companies like Alphabet, with vesting often tied to metrics such as total shareholder return (TSR).
• Companies like Microsoft, Apple, and Amazon also utilize similar compensation structures to incentivize their executives.
• The 75th percentile target for TSR performance is a relatively high bar, indicating a strong focus on shareholder value creation.
• The 200% maximum payout for exceeding the performance target is also a common practice to reward exceptional performance.

Stakeholder Impact

• Shareholders may view the vesting of performance stock units positively, as it indicates strong company performance.
• The sale of shares for tax obligations may have a minor impact on the stock price.

Next Steps

• Future vesting of Class C Google Stock Units will occur quarterly, subject to continued employment.

Key Dates

Keywords

Alphabet Inc., Prabhakar Raghavan, stock transaction, performance stock units, vesting, Class C Capital Stock, total shareholder return, TSR, tax obligations, Google Stock Units