The compensation comprises a base pay, performance stock units (PSUs) awards, and a time-based equity package.

The plan filed with the US Securities and Exchange Commission (US SEC), would make Pichai one of the highest paid chief executives in the world, as per an AFP report. Pichai has headed Google since 2015, and Alphabet since 2019.

Salary breakdown explained: How will the PSUs be valued?

• The fixed component of Pichai's equity-tied salary, includes $6 million for three-years - $2 million annually.
• The bulk of the compensation package is comprised of Alphabet stock and PSU awards worth up to $252 million in Waymo (autonomous vehicles, robotaxi services) and Wing (drone delivery service) stock.
• It also includes an $84 million time-based equity package if he stays with the company for the next three years.

The PSUs are measured by comparing parent company Alphabet's total shareholder return with other companies in the S&P 100. Thus, if Alphabet significantly outperforms its peers, the PSUs could pay up to twice the target amount, or $252 million. But if the company lags behind, the payout could even fall to zero.

Pichai will thus have to ensure that Alphabet and its subsidiaries - Google, Waymo and Wings, perform well to earn his full package.

How and why do Waymo and Wing matter for Pichai's pay?

According to the SEC filing, Pichai could receive about $130-260 million from Waymo and $45-90 million from Wing, with allocation dependent on the performance of the shares. For Alphabet, the allocation would depend on the dividends paid, the report added.

Notably, the upper end is 200% of the target value if the performance goals tied to the businesses are met or exceeded.

Further, if he is dismissed before the three-year period, the filing showed that Pichai would forfeit all stock options that are not yet exercisable. According to the company, the massive payout is justified as Pichai's current and previous incentives "have benefited Alphabet and its stockholders significantly".

The Waymo and Wings additions have been added under the "Other Bets" head, as per a Business Insider report. It added that the award value would depend on the compensation committee's estimation of per-unit value of Waymo and Wings stock.

Founded in 2009, Google moonshot factory's Waymo has delivered 200 million autonomous miles till date and has expanded to 10 urban markets in the US. Wings was founded in 2012, and aims to expand to over 270 Walmart stores by 2027.

The BI report noted that Alphabet no longer views the two as side projects, noting that he filing called the move to add these to Pichai's package as incentivising him to "focus efforts on developing and scaling" the businesses.

Sundar Pichai's track record as Google chief noteworthy

Indian-origin Pichai Sundararajan joined Google in 2004 and swiftly rose through the ranks with four promotions over 11 years and ultimately taking the helm in 2015. Over the past decade, Google has grown its market capitalisation 7x from $535 billion to $3.6 trillion under his leadership - briefly crossing $4 trillion mark in January this year.

Notably, sharp rise in Google's valuation over the years has significantly boosted Pichai's personal wealth too. The 53-year-old is worth an estimated $1.5 billion, as per the Forbes Real Time Billionaires list.

Pichai and his wife Anjali collectively own 1.67 million Google shares, valued at $498 million based on the company's Friday closing stock price of $298, according to regulatory filings.

Pichai grew up in Chennai, where his father worked as an electrical engineer and his mother worked as a stenographer before having him and his younger brother. He holds a degree in metallurgical and materials engineering from IIT Kharagpur. He moved to the US in 1993 and earned a master's degree from Stanford. He later attended the University of Pennsylvania's Wharton School for his MBA degree.

(With inputs from Agencies)