Suit says Google’s Larry Page gave big stock award to Android creator without board’s OK
Alphabet Inc. Chief Executive Larry Page didn’t get board approval before he awarded a $150-million stock grant to Andy Rubin, the creator of the Android mobile software, while the company helped cover up Rubin’s alleged misconduct, according to a lawsuit.
Eight days after granting the payout to Rubin, Page got “rubber stamp” approval for the equity compensation package from a board leadership committee, according to a revised investor complaint made public Monday in California state court in San Jose. Rubin eventually left the company with a $90-million severance agreement.
For the record:
3:50 PM, Mar. 11, 2019An earlier version of this story said Android creator Andy Rubin left Google with a $90-million severance package in addition to a $150-million stock grant. He got only the $90-million severance package.
The suit was originally filed in January, but some claims were blocked from public view at the time.
The new allegations shed light on Page’s power to compensate top executives and could add fuel to criticism that the company’s board isn’t strong enough to keep management accountable to shareholders. They could also pull Page deeper into the controversy around how Google has handled sexual harassment complaints, though it’s not clear if he knew about the investigation when he gave Rubin the equity. The Alphabet co-founder has generally stayed behind the scenes, while Google CEO Sundar Pichai has been left to deal with criticism of the company’s culture.
In the lawsuit, investors claim the board failed in its duties by allowing harassment to occur, approving big payouts and keeping the details private. The complaint targets the company’s top executives and committee members, including co-founder Sergey Brin, venture capitalist John Doerr, investor Ram Shriram, Alphabet Chief Legal Officer David Drummond and others.
“It’s confirmation of the fact that there were these large payouts” to Google executives and that the company’s “own internal investigation had shown there was misconduct and harassment,” Louise Renne, a lead lawyer for the plaintiffs, said Monday.
“Nonetheless,” Renne said, “rather than just being terminated, they were terminated with hefty reimbursement and gifts.”
The $90-million severance package was first detailed by the New York Times in October 2018, and it sparked a firestorm of criticism from both inside and outside the company. Soon after, thousands of Google employees walked out to protest how the company handles sexual harassment complaints. Since then, Google has changed its policies, including ending the practice of barring employees from suing the company and shunting them into private arbitration. People fired for sexual harassment haven’t gotten severance payments in the last two years, Google has said.
“There are serious consequences for anyone who behaves inappropriately at Google,” a company spokeswoman said in an emailed statement. “In recent years, we’ve made many changes to our workplace and taken an increasingly hard line on inappropriate conduct by people in positions of authority.”
Google declined to comment further.
The sections of the lawsuit revealed Monday were initially redacted at the request of Google lawyers, but the company has since changed its position. Google declined to comment on why it reversed that decision.
“My hope is this is a step toward transparency,” Renne said, referring to Alphabet’s decision to not fight the unsealing of the information. “The reason we brought this shareholder lawsuit was to have some transparency governing corporate affairs.”
One allegation unsealed Monday is that Amit Singhal, a top Google executive who left the company in 2016, was allowed to resign after accusations that he sexually harassed a female employee were found credible and he was given an exit package worth $35 million to $45 million. Singhal would go on to work for Uber Technologies Inc., but resigned from the ride-hailing company after Recode reported that he hadn’t told Uber about the reasons he left Google. Singhal, who has denied the harassment claims, didn’t immediately respond to a request for comment.
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