Google's evolving pay strategy case-

QUESTIONS:

1. What is Google's pay level? How do you define and measure its pay level?

2. Does your answer to the above question depend on what point in time it is answered? For example, what was Google's pay level the day before it repriced employee stock options? What was Google's pay level the day after it repriced employee stock options?

3. Why did Google reprice its stock options and also give a 10 percent salary increase (in an era when 2 to 3 percent annual salary increase budgets are the norm)? Is it because its business strategy and/or product life cycle changed? Is it because it was concerned that employees' perceived value of compensation did not match what Google was spending?

4. Do you think Google has made the right choices in changing its compensation strategy? How much do these changes cost? How do these costs compare to Google's total costs and operating income? Are these increased compensation costs likely to be a good investment? In other words, will they pay for themselves (and more)? Explain.