As the newest member of the Board of Directors at Google, Inc., President Tilghman has added not only another leadership post to her resume, but also a significant amount of stock to her investment portfolio.
The compensation package given to Tilghman includes 6,000 shares of stock to be awarded over the next five years. With Google stock currently valued at around $300, the total value of the package is about $1.8 million.
Tilghman, the first and only woman on the corporation's board, began her term on Sept. 30. She said that the money was not the reason she accepted the position.
"It had virtually nothing to do with my decision," Tilghman said. "I had literally agreed to do it before I had the slightest notion of what the compensation would be."
According to a survey of 350 of the largest American companies conducted by Mercer Human Resource Consulting and The Wall Street Journal, the median compensation package for board members of these corporations was $155,000 in 2004.
Tilghman received a $533,057 salary from the University for the 2002-03 academic year, according to the Chronicle for Higher Education.
"Google is very lucky to have world-class board members who each bring their own unique expertise to our growing company," Google spokeswoman Lynn Fox told the AP. "We try to offer our directors a competitive compensation package."
Tilghman's already valuable package has the potential to grow substantially. In just the past 14 months, Google's stock value has almost tripled.
When Stanford President John Hennessy joined the Google board in April of 2004, he received a stock compensation package that is now worth $18 million, according to the AP. Hennessy is also on the board of Cisco Systems.
Tilghman said she was unaware of the magnitude of her colleague's stock portfolio until she read about it in the newspaper.
One part of Tilghman's package is a grant of 6,000 Google Stock Units (GSUs), each of which yields one share of Google stock upon a specified vesting date. One fifth of Tilghman's GSUs will vest after one year, with the rest vesting at a rate of 300 units each following quarter. After five years, Tilghman will own the full 6,000 shares.
The package also includes the option to purchase 12,000 more shares of Google stock at a fixed price over the next five years. Thus, even if the stock appreciates in value, Tilghman can still purchase stock at the previous, lower price.
When asked if she plans to pursue this option, Tilghman said, "I haven't even considered it."
After announcing it would hire Tilghman on Oct. 5, Google expressed high hopes for its newest board member in the letter of agreement between the company and Tilghman.
"Shirley, I am looking forward to you joining the Company's Board of Directors," Hennessy, who signed the letter on behalf of Google, wrote. "I believe you will make a significant contribution to the Company and will help us to navigate our way through the future direction of the Company."
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