Silicon Valley has not been impervious to the #metoo movement. Several tech executives at different companies have quietly stepped down or dramatically forced out amid allegations. Oftentimes, their exit package comes with highly lucrative payouts. Such was the case when the former senior vice president of search Amit Singhal received up to $35 million after reportedly being forced to resign after a sexual assault where he drunkenly groped a female employee outside the workplace.
Details of Singhal’s exit package were recently revealed as part of a shareholder lawsuit against board members of Google parent Alphabet. The suit charges that the board had a duty to protect the company and shareholders against damage to the company’s reputation caused by the handling of Singhal’s departure. This is after the company paid an estimated $90 million in severance to Android creator Andy Rubin for leaving after allegations where he reputedly coerced a female coworker into oral sex. Rubin still denies this.
Employee action also adds pressure
Google employees were also so angry about the payouts that there was an organized walkout and is still pressing the company on specific issues. Some high-profile engineers are so disillusioned that they have left. There are also complaints that these two senior executives got large payouts while 48 other employees dismissed in the last two years for harassment have gotten nothing.
The lawsuit is led by shareholder James Martin, using board minutes and emails as evidence. The suit also claims that Alphabet CEO Larry Page awarded the payments before even getting approval from the board. All in all, analysts believe that Alphabet has lost billions of dollars in its stocks’ value due to the fallout from these lawsuits.
“The conduct of Rubin and other executives was disgusting, illegal, immoral, degrading to women, and contrary to every principle that Google claims it abides by,” the lawsuit claimed.
Martin, who is not an employee, seeks unspecified damages. He also wants Alphabet to change to a “one share-one vote” stock structure instead of the top-heavy approach that enables co-founders to have 60 percent of the voting power.
Employees or stockholders of companies that have given massive payouts to executives may want to follow the lead of Martin and Google’s employees to protect the culture of the company as well as the value of its stock. Conversely, companies need to take these complaints seriously and protect the business’s best interests. Hiring an experienced litigator to pursue these goals sets a strong precedent.