According to reports, people familiar with the matter said today that Google recently adjusted its remuneration policy to allow employees to cash in more equity awards faster. In the current increasingly fierce battle for talent, this move will help Google attract more talent from competitors such as Apple and Facebook. Previously, the restricted stock units (RSU) acquired by Google employees would be equally distributed (vest) within four years.
But recently, Google has turned to a new model: 33% for the first two years, 22% for the third year, and 12% for the fourth year. People familiar with the matter said that Google’s new system has been implemented in May of this year. In response, a Google spokesperson confirmed in an email and said that the new policy applies to employees worldwide.
This means that Google provides employees with a more attractive salary package, and it is possible to attract more talents from companies such as Apple and Facebook. Over time, it can also regulate cash flow, because employees sometimes receive additional stock awards from Google over a period of time.
Google began experimenting with different equity allocation schedules in 2019, including a “more forward” model, which allocates 36% in the first year. The four-year distribution cycle has always been the norm for large technology companies, and most of the wealth of these companies’ employees is generated through equity.
Statistics show that Facebook, Apple, and Microsoft continue to adopt more traditional distribution methods, stabilizing at 25% each year. And some companies, such as Strike, can be fully allocated to employees in the first year. Amazon, on the contrary, adopts a “post-installed” timetable, with a relatively high distribution ratio in the third and fourth years.
In recent years, many large technology companies, including Google, have lifted the “one-year cliff” restriction, that is, employees can only be allocated equity after working for a year. Instead, it can be distributed in the current year.
