2022 Annual Meeting of Stockholders
Alphabet Annual Meeting of Stockholders Final Transcript June 1, 2022. >> Kathryn Hall: Welcome to Alphabet's 2022 annual meeting of stockholders. Today's remarks, presentations, and answers to questions may contain forward-looking statements about our business outlook and other matters. Actual results or outcomes may differ from these forward-looking statements due to a number of risks and uncertainties, which are discussed today or detailed in our filings with the Securities and Exchange Commission, including our Forms 10-K and 10-Q. We do not undertake any duty to update forward-looking statements. [ Video ]
>>John Hennessy: Hello, everyone. Thank you for joining Alphabet's 2022 Annual Stockholders Meeting. I'm John Hennessy, Chair of the Board of Directors of Alphabet, and I’ll be presiding over today’s meeting. Joining us at this meeting are many members of Alphabet’s Board of Directors. We also have members of the management team participating, including Ruth Porat, Chief Financial Officer; and Kent Walker, President of Global Affairs. Today I’ll open with a few words,
and then turn it over to Sundar, who will talk about how our investments in knowledge and computing are driving our mission forward. After that, we’ll hear from Jen Fitzpatrick, who leads Google’s Core Systems and Experiences. She’ll share with us our latest advancements in security and privacy to keep more people safe online. Then Kathryn Hall, our vice president of Corporate Legal and Assistant Corporate Secretary, will go through the formal business of the meeting. Finally, we’ll have a Q&A session where we will answer a number of stockholder questions that have been submitted online. You can see all the rules and procedures for this meeting posted on the virtual annual meeting platform.
I have the privilege of serving as the Chair of the Board, and have been a member of the Alphabet Board for the past 18 years. In the past two years, we’ve convened this annual meeting against the backdrop of a global pandemic and a world that often seems like it’s changing faster than usual. During this period, our Board has worked closely with Sundar and the management team to execute on the company’s mission to organize the world’s information and make it universally accessible and useful. This mission has never been more important.
Throughout Alphabet, I’m proud of how our teams have shown resilience and weathered the volatility of recent years, supporting each other while providing services that have helped people around the world. The Board has spent a lot of time focused on our workforce. This past year, the Board’s Leadership Development, Inclusion, and Compensation Committee expanded its purview to oversee issues of human capital management, diversity and inclusion, workplace environment and safety, and corporate culture. Sustainability is another area in which our Board has engaged deeply. There is incredible momentum
behind the company’s bold commitments and work focused on climate and energy, particularly Google’s carbon-free moonshot. As someone who has worked in the field of computer science and academia for 50 years, I’m continually impressed by the scientific and technical advances that Alphabet continues to make. This was reflected a few weeks ago at our annual developer event, Google I/O, where Sundar talked about advancing the company’s enduring mission. This is only possible because of the company’s many significant advancements in AI, fueled by investments in R&D, which drive innovation across all of our products. Google remains among the top investors in R&D in the world; and that investment supports the company’s position as a leader in areas such as search, video, cloud computing and more. In fields like artificial intelligence, quantum computing, self-driving cars and biotechnology, Alphabet is making breakthroughs that advance science, provide benefits to society, and contribute to the sustained long-term growth of our business.
As we help guide and oversee the company’s progress in these areas, our Board is truly privileged to draw on seasoned leaders and visionary technologists, including Google’s founders, who together bring broad knowledge, deep experience and specific expertise. As we continue to review and provide oversight of all these important matters, our Board and our company benefit tremendously from the input and feedback from employees, stockholders, and stakeholders. We appreciate and value this dialogue and the insight it brings. Finally, on behalf of the Board, I would like to thank Alan Mulally for his dedicated service. Alan is not seeking reelection to our Board at this annual meeting, but we thank him
for all the insights and contributions he has brought since joining in 2014. Along with my fellow directors, I’m incredibly optimistic about Alphabet’s future and am grateful for the trust you have placed in us. We will continue to build a company that makes us all proud. With that, I'll turn it over to Sundar. >>Sundar Pichai: Thanks, John.
Hi, everyone. Thanks for joining us today. It’s been another extraordinary year since our last stockholder meeting, both at Google and for communities around the world. At Google, we are proud of how we help people when they need it most. Vaccine locations have been viewed 2 billion times on Search and Maps in the last year.
We’ve also been working to help communities impacted by the war in Ukraine and the resulting humanitarian crisis, be it providing support for refugees, fighting misinformation, or defending against cyberattacks. So I was very proud that Google was the first company to be awarded the country’s Peace Prize last week from President Zelensky. We have committed to work with the Ukrainian government to continue providing support. This is all part of what it means to deliver on our mission of organizing the world’s information and making it universally accessible and useful.
At our I/O developers conference last month, I talked about two key ways we move that mission forward: knowledge and computing. By deepening our understanding of information, we can turn it into knowledge for people to use in their everyday lives. And by advancing the state of computing, we can make that knowledge easier to access for people everywhere, no matter who they are.
Advances in both knowledge and computing are only possible because of our deep investments in AI. Across our products, we’re seeing how AI is helping us understand the world in deeper ways. In Search, we made one of our most significant updates in several years with Multisearch, which lets you search with images and text at the same time. Now, we’re adding a way to find local information. For example, if you see a pair of shoes you like, you can find out if any local stores carry them.
And another advancement called Scene Exploration will use Multisearch to pan your camera so you can get insights about multiple objects in a wider scene. AI is also helping improve translation. With a new monolingual approach to real-time translation, we’ve added 24 new languages to Google Translate, spoken by 300 million people. We also see a powerful role for AI in making technology more representative of the people who use it. Initiatives like Real Tone and the Monk Scale are improving skin tone representation and image equity across Google products.
And we are excited by the opportunity to provide richer ways of accessing knowledge in the real world. For example, a new Immersive View in Maps uses 3D mapping and machine learning to create a high-fidelity representation of a place. You’ll be able to use it to see what it’s like to be at the London Eye, how the weather is, and how busy it is, and view restaurants nearby. Every day people turn to Google’s products to find information, learn new skills, and contribute to the world’s collective knowledge.
It’s been particularly exciting to see how people are using YouTube Shorts for all of these things. Shorts recently surpassed 30 billion views per day. As we work to turn information into knowledge, we want to make that knowledge more accessible through computing. A big part of the journey is making computing more natural and intuitive -- again, building on the breakthroughs our research teams are making in AI. This starts with the Google products people use every day. The Google Assistant, which
turned five last October, is now able to better understand the way we speak naturally, with pauses and interruptions. This makes interactions feel much closer to a natural conversation. This year we also introduced LaMDA 2, the next step in our natural language model for dialogue applications that can converse on any topic. To make sure we are developing it responsibly, we’ve created the AI Test Kitchen — a way to share and test our AI efforts with the tech community, starting with LaMDA 2. We also introduced our breakthrough model PaLM earlier this year. PaLM could transform the way we use natural language processing to solve complex problems — and help people get knowledge in languages that aren't well-represented online. All this gets us closer to the goal of being able to answer questions on more topics in any language you speak, in Search and across all of Google.
We’re also focused on putting the power of computing in your hands, bringing together hardware, software and AI in a range of helpful devices. Tensor, our custom system on a chip, brings our AI capabilities right to your phone, including tools like the best speech recognition we’ve deployed so far. Pixel 6 is a huge step forward for the Pixel portfolio, and it’s been great to see the response. It’s the fastest-selling Pixel ever. The Pixel 6a is coming next month, with the same Tensor chip as the Pixel 6 and Pixel 6 Pro.
And I’m really excited about our line-up in the coming months, including Pixel 7 and Pixel 7 Pro, a Pixel Watch with Fitbit, and then a Pixel tablet available next year. We see devices working seamlessly together, exactly when and where you need them, with conversational interfaces that make it easier to get things done. Looking ahead, there’s a new frontier of computing with augmented reality. We’ve invested heavily in this area, building it into many products, from Google Lens to Live View in Maps. AR has the potential to help people spend time focusing on what matters in the real world, in our real lives, because the real world is pretty amazing. It’s important that we design in a way that is built for the world you live in and doesn't take you away from it. At I/O, we shared a prototype that shows the
power of translation and transcription when you put them directly into people’s line of sight. We believe that computing must be safe and secure, for everyone. As one example, we’ve expanded our support for Project Shield to protect the websites of more than 200 Ukrainian government agencies, news outlets and more.
We also believe that computing is only as powerful as it is accessible to people and organizations. Android continues to increase access to computing through smartphones — like the JioPhone Next released last year to help more Indians get online. And through Google Cloud, we bring the benefits of our computing infrastructure and AI/ML tools to organizations of all sizes. Workspace continues to have strong momentum as companies settle into their new hybrid work routines. I’m really excited about the announcements we made at I/O including how we are bringing summarization to Workspace in Docs and, later, automated transcription to Meet.
Beyond individual product improvements, we know that we can offer more in the way of compute power. That’s why we’ve opened the world’s largest, publicly available machine learning hub at our data center in Mayes County, Oklahoma. This will give Google Cloud customers the ability to unlock innovation across many different fields. Importantly, the Mayes County hub — and the entire Oklahoma data center — is operating at or near 90% carbon-free energy, along with four other data centers around the world.
In April, four clean energy projects came online in Europe and South America. That includes two wind projects, solar energy, and a battery-based power system, the world’s first at a hyperscale data center. All of these projects will help us achieve our 24/7 carbon-free energy goal, the anchor for our third decade of climate action. We made big commitments in the past year to cut food waste in half and send zero food waste to the landfill. And beyond our operations, we continue to give people ways to make more sustainable choices through our products. Our ecofriendly routing option on Maps has already helped save drivers an estimated half a million metric tons of carbon emissions. We'll be expanding to Europe later this year.
On Google Flights, we’ve added ways to search flights by carbon emissions, and our Nest thermostat is enabling people to support clean energy right from their homes. We're working to help our partners and customers take climate action as well. Through Google Cloud, we've partnered with businesses around the world on their ambitious sustainability goals. We’re also helping major companies measure and reduce their impact on the environment with Cloud's Carbon Footprint tool, which we build with customers like Etsy. We remain committed to strengthening our focus
on sustainability, so advances in knowledge and computing are not at the expense of the planet. Let me also touch on some of our Other Bets. Waymo employees can now take rider-only trips in San Francisco and will soon be able to in downtown Phoenix. This means Waymo is now providing fully autonomous trips in multiple locations, including its public service in Phoenix's East Valley.
In April, Wing launched its on-demand drone deliveries in the Dallas-Fort Worth area. In the first quarter of 2022, Wing completed over 50,000 commercial deliveries, up more than 3X year-over-year. As always, we continue to take a long-term view, and see a lot of exciting opportunities ahead to build technology that is truly helpful to people in their real lives.
That’s what our focus on advancing knowledge and computing is all about, and I’m grateful to our employees and stockholders who make it possible. Thank you. Now I’ll pass it to Jen for an update on our work on security and privacy. >>Jen Fitzpatrick: Thanks, Sundar. Every day people turn to our products for help in moments big and small. Core to making this possible is protecting users’ private information every step of the way. Even as technology grows increasingly complex, we keep more people safe online than anyone else in the world, with products that are Secure by Default, Private by Design, and Put users in Control.
Today I’m proud to share with you our advancements that make every day Safer with Google. Widespread cyberattacks like, Colonial Pipeline and the recent Log4j vulnerability, threaten to put people’s private information at risk, disrupt critical services like energy grids and telecommunications networks and weaken global democracies. To prevent future attacks, we’re raising the bar for the entire industry by pioneering advanced cybersecurity technology, alerting others to security risks within their own systems, and open sourcing solutions that make the whole internet safer. Specialized teams like our Threat Analysis Group and Project Zero counter serious threat actors and detect vulnerabilities across the Internet. Last year our Threat Analysis Group detected that over 40,000 users were being targeted by government-backed actors. We automatically alerted every user, increased protections and blocked attacks.
Most recently, with the war in Ukraine, we observed a surge of distributed denial of service attacks against websites providing critical information, like current news and evacuation resources. We expanded our free DDoS defense program, Project Shield, to defend more than 180 Ukrainian websites, including those that belong to the Ukrainian government, news, and human rights groups. And because much of the world’s technology infrastructure is dangerously outdated, we’re investing $10 billion over the next five years to modernize vulnerable systems and infrastructures, secure the software supply chain, and train 100,000 Americans in digital skills including data privacy and cybersecurity, through the Google Career Certificate program.
In addition to keeping companies and organizations safe around the world, we build advanced security into everything we make to protect individual users. In the last few years, phishing scams have risen substantially, and they’re responsible for 90% of recent cyberattacks. Our built-in protections intercept these attempts before they ever reach users. For example, every day Gmail and Messages by Google block more than 15 billion spam and phishing messages. Google Play now scans 125 billion installed apps for malware, making the entire app ecosystem safer. And our Safe Browsing technology
built into Chrome and other major browsers now protects 5 billion devices from risky sites. Detecting and blocking threats at this scale every day makes our AI-powered protections second to none and also enables our teams to identify new areas to safeguard. Cybersecurity experts say the single most-important way to protect users’ accounts, and help prevent cyberattacks, is to use multifactor authentication. That’s why we’ve made our two-step verification as easy as it gets.
Whether you’re on Android or iOS, just one tap on your phone, and you’re in. No six-digit codes. Over 10 years ago, we were the first consumer technology company to offer two-step verification, and we’re now the first to turn it on by default. To extend the world-class security of your Google Account to all your online accounts, we built Sign in with Google. At Google I/O, we announced how
we’re building on this authentication system, including an industry-wide effort to enable passwordless sign-in across every device, website, and application on any platform; the launch of Virtual Cards on Chrome and Android. Now, when users use autofill to complete payment details at checkout, we’ll replace their card number with a distinct, virtual number, reducing the risk of fraud and identity theft. And adding a safety status on profile pictures so if anything needs attention, we’ll let the user know and then guide them through simple steps to ensure their account is secure. We’re relentless about protecting users’ personal information with the most advanced security in the world -- because if it’s not secure, it’s not private.
But protecting user privacy requires us to be equally rigorous in building products that are private by design, and I’m excited to tell you about our latest advancements in this area. Today computing is no longer happening just on a computer, or on a phone but across your home, in your car, on your wrist and in the cloud. Unlocking personalized, helpful experiences while protecting user privacy in this increasingly complex environment presents new technical challenges. Building on deep research and advances in AI, hardware, and cloud computing, we’ve engineered a new technical approach we call Protected Computing. At its core, Protected Computing is a growing toolkit of technologies that transforms how, when, and where data is processed to technically ensure the privacy and safety of your data.
Our approach focuses on three areas. First, we minimize the data footprint. Our focus here is on shrinking the amount of personally identifiable data altogether, collecting less and deleting more. If the data doesn't exist, it can’t be hacked. Second, we de-identify the data. We use a range of anonymization techniques to strip identity from data, so it is no longer linked to individuals. And third, we restrict access. This is about making it technically impossible for anyone, including Google, to access sensitive data.
This toolkit of diverse techniques enables us to deploy the safest, smartest solution possible, often stacking multiple techniques to provide layered protections. Protected Computing represents our deep commitment to innovating new technical solutions that make technology more helpful, safe and private everywhere that computing happens. No one else is deploying such a multi-faceted approach at our scale, and I’m excited to see all the ways our teams will apply Protected Computing to ensure that every day users are Safer with Google. I’ll now turn it over to Kathryn Hall. >>Kathryn Hall: Thank you, Jen. Hello, everyone. I’m Kathryn Hall, Alphabet’s Assistant Secretary, and I’ll be conducting
the formal business of the meeting. At this time, I call the meeting to order. Joining us today are Leah Grant, a representative of Broadridge Financial Services, who will act as our Inspector of Election, and Matthew Sapp and Mike Runfola, representatives of Ernst & Young, LLP, our independent accountants. The polls are open and will close after the presentation of our formal business matters. As John noted earlier, we’ll provide for a question-and-answer period after we have finished the formal business of the meeting. If you would like to ask a question during the meeting, please enter your question in the “Ask a Question” box on the virtual meeting website. To allow us to answer questions from as many stockholders as possible, please keep questions succinct and limited to one topic per question.
Stockholder questions or remarks must be relevant to the meeting. Thanks in advance for your cooperation with all of the Rules of Procedure posted on the virtual meeting website. I’ve received an Affidavit of Mailing from Broadridge that states that the notice of this meeting was duly given. All stockholders of Class A and/or Class B common stock as of the close of business on April 5, 2022, are entitled to vote at this meeting. In addition, I’ve been advised by the Inspector of Election that holders of our outstanding Class A and Class B common stock, representing at least a majority of the voting power of our outstanding Class A and Class B common stock entitled to vote, are represented at today’s meeting.
Therefore, a quorum is present, the meeting is duly constituted, and the business of the meeting may proceed. The first item of business is the election of directors. Ten directors will be elected at today’s meeting. The directors elected today will hold office until the 2023 Annual Meeting of Stockholders. The Board of Directors has nominated the following individuals: Larry Page, Sergey Brin, Sundar Pichai, John L. Hennessy, Frances H. Arnold, L. John Doerr, Roger W. Ferguson Jr., Ann Mather, K. Ram Shriram, and Robin L. Washington. Our bylaws require that stockholders provide advanced notice of their intent to nominate persons as directors.
No such notice was received. Accordingly, I declare the nominations for director closed. The next matter being submitted to our stockholders is the ratification of the appointment of Ernst & Young, LLP, as our independent registered public accounting firm for the 2022 fiscal year. Our Board of Directors has recommended that our stockholders ratify the appointment of Ernst & Young, LLP, as Alphabet’s independent registered public accounting firm for the 2022 fiscal year. The next matter being submitted to our stockholders is approval of an amendment of Alphabet’s 2021 Stock Plan to increase the share reserve by 4,000,000 shares of Class C capital stock. Our Board of Directors has recommended that our stockholders approve an amendment to Alphabet’s 2021 Stock Plan to increase the share reserve by 4,000,000 shares of Class C capital stock, as described in detail in our Proxy Statement. The next matter being submitted to our stockholders is approval of an amendment to Alphabet’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares in connection with the previously announced 20-for-one stock split and for general corporate purposes. Our Board of Directors has recommended that our
stockholders approve an amendment to Alphabet’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares, as described in detail in our Proxy Statement. The next 17 items being submitted are stockholder proposals that were included in our Proxy Statement. The first stockholder proposal is brought by Boston Common Asset Management, LLC, on behalf of the Boston Common ESG Impact US Equity Fund. The proponent has submitted a pre-recorded presentation in support of the proposal. I recognize Lauren Compere for a period of three minutes. >> Lauren Compere: Boston Common Asset Management seeks your support for Proposal 5 on the company's 2022 proxy statement as the lead filer. I'm Lauren Compere, Head of Stewardship and
Engagement at Boston Common Asset Management. The proposal asks Alphabet to prepare an annual report on its lobbying expenditures, and more details can be found in the published proxy. Alphabet spent over $99 million on federal lobbying from 2015 to 2022 according to the Open Secrets Database. This does not include state lobbying where Alphabet also lobbies but disclosure is uneven or absent.
For example, Alphabet spent close to $2 million lobbying in California from 2015 to 2020. Alphabet also lobbies abroad and was the top lobbying spender in Europe for 2020 spending over 5.7 million euros. Alphabet's current disclosure on lobbying is inadequate given evolving expectations by investors and other stakeholders. Specifically, Alphabet fails to provide an annual report breaking out its lobbying payments by federal, individual states, trade associations, and social welfare groups. Alphabet lists support of 378 specific trade associations, social welfare groups, and nonprofits for 2020, yet fails to disclose its payments or the amounts used for lobbying purposes. Alphabet's lack of disclosure presents reputational risks when its lobbying contradicts company public positions. For example, Alphabet believes in
addressing climate change, but the chamber and CEI undermine the Paris Climate Accord. Alphabet has also signed statements opposing state voter restrictions, yet the chamber lobbied against the For The People Act. Indirect lobbying through trade associations and social welfare groups presents potential risk and lacks accountability. Investors are asking for lobbying transparency to better understand risks, and Alphabet could easily provide shareholders the lobbying disclosures requested in this proposal. Therefore, we ask Alphabet to expand its lobbying disclosure as outlined and for shareholders to vote in favor of Proposal 5. Thank you. >>Kathryn Hall: Thank you for presenting this proposal We publish extensive disclosures on our U.S. Public Policy Transparency website, which describes our public policy
and lobbying activities, trade association participation, and other key elements of our approach to engaging with policymakers. Our Nominating and Corporate Governance Committee and senior management regularly review our corporate political activities to ensure appropriate policies and practices are in place. When we participate in trade associations, we do so to advance the interests of our company and our stockholders. We respect the independence
and agency of trade associations to shape their own policy agendas and positions, and we’ve made it clear that our participation does not represent an endorsement of an organization’s entire agenda or the views of its leaders or other members. Given the depth and breadth of our existing disclosures and frequency of our updates about our public policy and lobbying activities, our board believes that the report requested by this proposal would not provide meaningful additional information to our stockholders, and, as such, recommends a vote against this proposal. The next stockholder proposal is being brought by Zevin Asset Management, LLC, on behalf of Sisters of Saint Dominic of Grand Rapids, as lead filer, and Benedictine Sisters of Virginia, Benedictine Sisters of Mount St. Scholastica, Missionary Oblates of Mary Immaculate - U.S. Province, along with a number of other co-filers. The proponents have submitted a pre-recorded presentation in support of this proposal. I recognize Marcela Pinilla for a period of three minutes to present this proposal.
>>Marcela Pinilla: Greetings Alphabet Board, Alphabet management, and fellow shareholders. My name is Marcela Pinilla, and I'm the Director of Sustainable Investing at Zevin Asset Management. On behalf of our clients, we actively integrate ESG-related risks and impacts into our portfolio management. Our proposal asks Alphabet to prepare an annual report evaluating the alignment of its lobbying through third parties and the goals of the Paris Climate Change Agreement. Let me start with this: Google is one of the pioneers in setting ambitious climate goals. In its announcement of its commitment to run on carbon-free energy by 2030, the company communicated its understanding of the importance of congruence with policy mechanisms outside of their organizations by stating it would work with partners to advocate for smart public policy.
In other words, the company believes that to achieve its climate goals, supportive public policy is essential. However, information is limited on the topic of how the company engages with trade associations, social welfare organizations, and other nonprofits that conduct public policy advocacy on their behalf. In a step to further advocate for coordinated climate policy, we're asking Alphabet for a review of potential conflicts of interest with Google's own public policy engagement protocols to help ensure executive accountability internally and external accountability to investors and stakeholders. Although Alphabet's
sustainability and public policy reporting is best in class, the evolving landscape continues to elevate expectations of corporate disclosure, especially on an issue as critical as advancing coordinated and cohesive action on climate change policy locally and globally. Clearly, Alphabet recognizes how critical public policy is not only to the world's prospects for reaching the goals of the Paris Agreement but the company's own prospects of achieving its goals. Thus, it is imperative that all of the company's public policy advocacy, direct lobbying, public statements, reports, and funding of organizations engaged in public policy be pointing in the same direction. Corporate best practice on lobbying disclosure is evolving both on spending transparency and consistency of public policy positions.
Already major corporations in the U.S. and Europe are issuing climate policy alignment reports. Without regular assessment of direct and indirect policy activities, the company may be exposing itself to serious risk. It is not the job of shareholders to conduct this policy alignment analysis, but the role of management to assess how payments to third-party policy organizations advance or hinder its strategy to address climate change. Thank you very much. >>Kathryn Hall: Thank you for presenting this proposal. We have long supported robust international action
and policies on climate change and have set our own ambitious climate goals. As you’ll recall, we were the first to announce an ambitious goal that will be transformative for the industry. We aim to operate 24/7 carbon-free energy by 2030. Our U.S. Public Policy Transparency website provides extensive and regularly updated disclosures on our political engagement and lobbying activities, including on instances where we have engaged in lobbying activity specifically on climate-related issues. Through our participation in various trade associations, we have the platform to encourage them to support sensible climate policies that can create a prosperous and competitive net-zero economy. Again, our participation does not represent an endorsement of an organization’s entire agenda or the views of its leaders or other members. Our Board believes that our existing disclosures,
in combination with our climate change strategy and transparent reporting on our climate-related activities, makes the additional reporting requested by this proposal unnecessary and duplicative, and, as such, recommends a vote against this proposal. The next stockholder proposal is being brought by Pax World Funds, as lead filer, and The Comptroller of the State of New York, Thomas P. DiNapoli, on behalf of the New York State Common Retirement Fund, as co-filer. The proponents have submitted a pre-recorded presentation in support of this proposal. I recognize Julie Gorte for a period of three minutes to present this proposal. >>Julie Gorte: On behalf of Impax Asset Management
and the New York State Common Retirement Fund, we urge Alphabet shareholders to vote for Proposal 7 on the proxy, the proposal regarding resilience to physical risk posed by climate change. The proposal urges Alphabet to publish a regular periodic assessment of resilience to the physical risks of climate change including the description in the short, medium, and long-term measures that the company is taking to mitigate physical risks including threats to its headquarters and other key assets from sea level rise flooding and other climate hazards. The physical effects of climate change pose long-term and short-term risks to the financial performance of the company. Shareholders need to know whether Alphabet is taking reasonable
measures to build resilience to physical risks of climate change and how such measures help Alphabet manage physical risks. Alphabet faces growing physical risks. In recent years, the company has expanded its headquarters and other facilities by acquiring properties in the San Francisco Bay Area. These are vulnerable to flooding due to sea level rise. San Francisco Bay has already risen almost 8 inches in the past century. And by 2050, the water level is expected to rise another 0.9 to 1.9 feet depending on how much more greenhouse gas is emitted. In addition, Alphabet's data centers which
are located across the globe as the company's key assets may face various physical risks depending on the location. The company's existing disclosures provide little information to investors to assess the company's exposure to physical risks and preparedness to respond. In 2021, the company reported to CDP that it assessed short, medium, and long-term physical risks including sea level rise, precipitation and flooding, drought, heat, wildfire, and water stress. It found flooding and extreme heat to be the largest risks to the company. Increasing heat is likely to cause increasing cooling costs at Alphabet's data centers. However,
Alphabet has not disclosed any steps being taken to manage or adapt to flooding or provided precise location information about the heat-sensitive data centers. Without these disclosures, investors cannot make their own estimates of physical risk such as damage from climate-related events or any acute or chronic climate physical risks. Finally, in the company statement of opposition to our proposal, Alphabet mentions that the company reports its emissions and has set emissions reduction goals. These are commendable moves
by the company but are unrelated to physical risks and still shareholders need to understand Alphabet's exposure to and management of physical risks. Better disclosures on resilience to physical risks proposed by climate change are needed for Alphabet shareholders. We urge Alphabet stockholders to vote for Proposal 7 on the proxy. >>Kathryn Hall: Thank you for presenting this proposal. Climate change is one of the most significant global challenges of our time. We firmly believe that every business has the opportunity and obligation to protect our planet, and we have formally expressed our support for the Task Force on Climate Related Financial Disclosures, or TCFD.
As disclosed in our publicly available CDP, also known as Carbon Disclosure Project Reporting, we have conducted climate risk assessments for our physical assets and considered both short and long-term physical risks, including sea level rise, flooding, drought, wildfires, temperature and water stress on our real estate operations, priority office sites and data centers. Our Chief Sustainability Officer collaborates with our risk management and operations teams to identify risks and opportunities and find areas where we can mitigate or adapt to the impacts of climate change. Our current disclosures, including our CDP reporting and our annual Environmental Reports, provide meaningful insight into how we identify, assess, and mitigate climate-related risks, including physical risks. As a result, our Board does not believe that the additional reporting requested in this proposal would provide substantial additional information to our stockholders, and, as such, recommends a vote against this proposal. The next stockholder proposal is being brought by As You Sow, on behalf of James McRitchie, as lead filer, along with other co-filers. The
proponents have submitted a pre-recorded presentation in support of this proposal. I recognize Elizabeth Levy for a period of three minutes. >>Elizabeth Levy: Good morning. My name is Elizabeth Levy. Thank you for the opportunity
to present Proposal Number 8 on behalf of shareholder representative As You Sow. This proposal asks our company to disclose quantitative water metrics by location and, for each location, the practices implemented to reduce climate-related water risk. Alphabet relies heavily on its data centers which use enormous amounts of water. Many of Google's data centers operate in drought-prone areas where our company's significant water use generates public and ongoing controversy. NOAA, the National Oceanic and Atmospheric
Administration, has linked climate change to unprecedented periods of drought that are predicted to worsen. Our company's reliance on water resources and a warming climate is becoming increasingly contentious and fraught with risk. Parts of the U.S. are already suffering from the worst water shortages on record. Data centers are likely to
face increasing competition from high-value uses such as drinking water, irrigation, and hydropower generation, among others. Each location Alphabet operates in is unique in its water use concerns. Every region has different levels of water strain and scarcity influenced by factors including region-specific drought and rainfall levels, ground water use or overuse, and the competing water needs of other companies, industries, and the general population. Without site-by-site analysis of water risk and site-specific use information, investors cannot accurately assess material risk. This includes the likelihood of operations disruptions due to climate-related water depletion, overconsumption, or competition. Alphabet also faces reputational risk by hiding its consumption data from local communities.
Google considers its site-specific water use even in water-stressed areas a trade secret, a position that has caused significant public outrage and keeps investors in the dark concerning growing risk. Disclosing water use information will increase public goodwill and will provide investors with data necessary to assess water-related risk. While we applaud Google for certain commitments it has made towards water replenishment, water stewardship, and circular water use related to specific facilities, shareholders have no meaningful way to put these actions into context without annual water use disclosure by location and meaningful assessments of future water risk and scarcity planning by location. Generalized company-wide water use data does not address the issue of location-based risk. We believe Alphabet could become a leader in sustainable water use. The next step is providing
thorough, site-specific water use disclosure. We look forward to working with Alphabet to improve its water reporting. Thank you. >>Kathryn Hall: Thank you for presenting this proposal. Water stewardship is among our key sustainability commitments, and this is reflected in our water-related goals and stewardship initiatives which are tailored based on facility type, location, and local water context and risk. Our water management strategies and performance against our goals are detailed in Google’s Water Stewardship paper and in our Environmental Reports, which are both available on our Sustainability website.
And in our 2020 Environmental Report, we introduced three new water indicator disclosures to align with industry standards: total water withdrawal, consumption, and discharge. Given our steadfast commitment to advance responsible water use and our public disclosures around our water stewardship work to date, our Board does not believe that implementing this proposal would provide additional benefit to our stockholders, and, as such, recommends a vote against this proposal. The next stockholder proposal is being brought by The Nathan Cummings Foundation, as lead filer, along with a number of other co-filers. The proponents have submitted a pre-recorded presentation in support of this proposal. I recognize Laura Campos for a period of three minutes to present this proposal.
>>Laura Campos: Good morning. My name is Laura Campos. I am the Director of the Corporate and Political Accountability Program at the Nathan Cummings Foundation, and I'm participating in Alphabet's annual meeting to move Proposal Number 9 on behalf of the foundation and its co-filers. Proposal Number 9 requests the Board commission a third-party, independent racial equity audit analyzing Alphabet's adverse impacts on Black, Indigenous, and people of color communities and publish a report of the results on the company's website. While we're encouraged that the company shares our overall goals of equity and inclusion, we disagree with the company's conclusion that Alphabet's current commitments, actions, and disclosures already meet the aim of the proposal. What we are asking for is a third-party assessment of Alphabet's impacts on communities of color conducted by an independent expert.
Here are just a few of the reasons we're concerned that Alphabet has some major blind spots when it comes to the adverse impacts of its operations and products on people of color. Alphabet's YouTube platform has been repeatedly implicated in conservative radicalization. It's also been used to undermine racial justice organizations like Black Lives Matter and to promote white nationalist viewpoints. Alphabet's artificial intelligence tools appear to have been impacted by bias.
For example, an AI tool developed by Alphabet to detect hate speech was up to twice as likely to identify tweets as offensive when they were written with African American vernacular English. Earlier this year a lawsuit seeking class action status alleged systemic racial bias in Google's employment practices. The lawsuit asserts that among other things, Google maintains a racially biased corporate culture that favors white men while steering Black employees to lower-level jobs, paying them less, and denying them opportunities to advance because of their race.
Despite goals to increase diversity at senior levels and double the number of Black+ employees, Google itself admits that only a few of the programs and practices they've implemented have shown promising results. Externally Alphabet's racial equity impacts have drawn the attention of lawmakers and regulators. Alphabet has been called before Congress over concerns about bias, hate speech, and disinformation. Multiple members of Congress have expressed concerns about algorithmic bias and representation at Google, and at least five senators have called on Alphabet to conduct a racial equity audit. The fundamental disconnects between Alphabet's perception of its own impacts, the conclusions of multiple pieces of research, and, most importantly, the lived experiences of impacted communities highlight the need for a third-party audit to assess and clarify the company's impacts on racial equity. Alphabet must reconsider its opposition to this proposal
and commit to undertaking an independent racial equity audit. Thank you. >>Kathryn Hall: Thank you for presenting this proposal. We share the proponent’s overall goals of equity and inclusion, and we believe that it is important to understand systems and processes. However, we do not believe the proposal is the best way to accomplish our shared goals. With the Board’s oversight, we already continuously review our approach to racial equity to find areas where we can improve.
This work ensures that our commitment to racial equity is reflected in our goals and actions; and that we are building our products so that they work for everyone. Most recently, we have retained noted civil rights attorney and expert Debo Adegbile, Chair of WilmerHale’s Anti-Discrimination Practice, to inform our work and program development. We have also heightened our focus specifically on promoting racial equity within our organization. Our commitment to improve leadership representation of Black+, Latinx+ and Native American+ Googlers in the U.S. by 30% by 2025 is already driving results. We’re also committed to product inclusion, working to make technology more equitable and accessible.
We’ve improved our algorithms to serve all users and reduce stereotypical representations of people and other forms of problematic results, and this work continues. We continually update and improve the filters we use to block offensive language from appearing in results. We also developed more stringent hate speech and harassment policies for YouTube. And we are transparent with our Board, employees, stockholders, and the civil rights community about our goals and how we are performing against them.
We regularly engage civil society organizations; and their feedback has informed our diversity, equity and inclusion efforts, including our recent workplace commitments. Our Board believes that our current commitments, actions and transparent disclosures describing our efforts to build racial equity already meet the aim of the proponents' request and, as such, recommends a vote against this proposal. The next stockholder proposal is being brought by Whistle Stop Capital on behalf of its clients. The proponents have submitted a pre-recorded presentation in support of this proposal. I recognize Meredith Benton for a period of three minutes to present this proposal. >>Meredith Benton: Hello.
My name is Meredith Benton, founder of Whistle Stop Capital, and I formally move Proposal 10 requesting the Board assess and report on the risk to Alphabet associated with concealment clauses. Concealment clauses are any employment or post-employment agreement such as arbitration, nondisclosure, or nondisparagement agreements that Alphabet asks employees or contractors to sign which would limit their ability to discuss unlawful acts in the workplace including harassment and discrimination. Concealment clauses may allow unlawful behavior to proliferate unchecked by the risk of public exposure, increasing a company's legal, financial, and reputational risks over time. We filed this proposal because Alphabet's policies regarding the use of concealment clauses were not publicly available. We didn't know what their practices were. As a part of the company's statement in opposition to our proposal, Alphabet's policies have now been published. Alphabet shared publicly,
to our knowledge for the first time, that Google's employment, severance, and settlement agreements do not prohibit the disclosure of harassment or discrimination claims. Their employment contracts the company have shared have specific language making this exemption clear. We felt that in order to ensure that Alphabet's policies would be shared with investors, potential employees, and other stakeholders, it was necessary that the resolution remain on the proxy ballot.
Unfortunately, Alphabet's statement in opposition was unclear on two key questions. The first question: Does its policy apply to Alphabet's contractors? Alphabet's business model seems to depend on large numbers of contractors. According to a 2020 "New York Times" report, Google employs more than 130,000 contractors and temp workers. Quote, a shadow workforce that outnumbers its 123,000 full-time employees, end quote. The second question: Does the policy apply to Alphabet's non-Google units? At least one of these has been the subject of concerning reports of an employee being told she would face disciplinary action if she revealed details of her sexual harassment claims to anyone within the company including her manager. I respectfully ask that Alphabet publically
clarify its use of concealment clauses. I ask that it publicly respond to my questions about the contractors and non-Google employees either at the end of my remarks or prior to the close of this investors meeting. Thank you. >>Kathryn Hall: Thank you for presenting this proposal.
We believe that our existing policies and practices meet and often exceed legal requirements. To be clear, Google's employment, severance, and settlement agreements do not prohibit the disclosure of facts underlying claims of harassment or discrimination. We have shared excerpts from these agreements in our opposition statement, which can be found in our Proxy Statement.
Moreover, we have taken several meaningful steps beyond basic requirements, including recently conducting a thorough review that resulted in several changes to improve workplace practices, such as no longer requiring current and future employees to arbitrate employment disputes. This includes, but is not limited to, sexual harassment and assault claims. Alphabet's Code of Conduct outlines five guiding principles -- commitment, care, transparency, fairness and consistency, and accountability -- and sets the tone at the top to establish a respectful, safe and inclusive working environment for all employees and members of the extended workforce. Google and each Other Bet have
specific policies that implement Alphabet's commitment to these guiding principles. In light of our existing policies around the use of concealment clauses, our Board does not believe that implementing this proposal would provide substantial additional information to our stockholders, and, as such, recommends a vote against this proposal. The next stockholder proposal is being brought by the NorthStar Asset Management, Inc. Funded Pension Plan. The proponent has submitted a pre-recorded presentation in support of this proposal. I recognize Whitney Nguyen for a period of three minutes to present this proposal. >>Whitney Nguyen: My name is Whitney Nguyen from
NorthStar Asset Management in Boston representing 6,888 shares of Alphabet common stock. I am presenting Resolution Number 11, a request that Alphabet's Board take all practical steps to initiate and adopt a recapitalization plan for all outstanding stock to have one vote per share. We've been coming to this shareholder meeting to talk about equal shareholder voting for many years since 2015, and year after year, the vast majority of outside shareholders support our request. We believe that it's clear that shareholders want to have a say in the important matters of the companies in which they invest. Yet at Alphabet, ordinary shareholders
do not have an equal ability to weigh in on significant matters of corporate policy. The SEC calls proxy voting the primary way for shareholders to make their views known to company management and participate effectively at an annual or special meeting. Alphabet's voting structure is heavily weighted to favor insiders given that Class B shares are granted ten times the voting rights of Class A shares. And Class C shareholders have zero votes per share. Without equal voting rights, shareholders' ability to provide feedback to the Board and protect their investment is diminished. We believe this share structure empowers the CEO and insiders to appoint a Board that primarily serves the CO and management, not shareholders. While shareholders might accept this lack of input when profits are
up, we believe that this voting structure constitutes a considerable risk to governance in shareholder value during times of crisis. And our company is no stranger to controversy. In its opposition statement, the company asserts that the current unequal voting structure allows it to focus on long-term success. However, the company continues to be fraught by controversies that we believe could be avoided with proper governance reforms. Alphabet employees continue to
speak out criticizing and protesting the company's technological decisions from its contract with the Department of Defense to the bias built into its artificial intelligence systems. Additional incidents with financial or material social impacts can harm share value too. Shareholders, we urge you to vote for Proxy Item Number 11, an outstanding stock to have one vote per share. Thank you. >>Kathryn Hall: Thank you for presenting this proposal. Since its inception, Google, and now Alphabet, has been managed with a focus on the long term and we’ve established a track record of building a strong company and creating stockholder value. We believe this value creation is further enabled
by the stability provided by our capital structure, which insulates us from short-term pressures and allows us to focus on long-term interests. We also have a sound and effective governance structure to ensure accountability to our stockholders, including having an independent board leadership with our independent Chair; maintaining and periodically enhancing our governance practices and stockholder rights; and soliciting feedback through direct engagement with our stockholders, which is shared with and reviewed by our Board. Our Board believes that our capital structure, combined with our effective governance practices, have provided significant stability to our company and proven benefits to our stockholders, and is therefore, in the best interests of our stockholders. As such, our Board recommends a vote against this proposal. The next stockholder proposal is being brought by the National Legal and Policy Center. I recognize
Paul Chesser for a period of three minutes to present this proposal. I’ll advise you when your time is about to expire. Operator, please open Mr. Chesser’s line. >>Operator: Mr. Chesser, your line is now open. >>Paul Chesser: I'm Paul Chesser, Director of the Corporate Integrity Project for National Legal and Policy Center. A public service announcement for my fellow shareholder proponents. Be aware when a
company opposes your resolution by using the term "robust" to describe its disclosures. When you see that word "robust," you can be sure the company is gaslighting you as Alphabet is doing in its proxy response to my organization's proposal. Our proposal requests a detailed report that itemizes requests from U.S. government
officials and agencies, details the nature of each request, and tells what Google's decision was about the request. Alphabet's Proxy Response is to refer to its misnamed Transparency Report which tells us nothing other than to enumerate how many takedown requests it received from various governments around the world. The only reason we won't get the kind of report my organization seeks is because Alphabet's majority voters, Sergey Brin and Larry Page, don't want you to know how much the Biden Administration conspires with Google and YouTube to censor users of their platforms. MSNBC's newest personality, former White House spokeswoman Jen Psaki, confirmed it in a press conference last year. She said almost one year ago, quote, We are in regular touch with these social media platforms and those engagements typically happen through members of our senior staff but also members of our COVID-19 team, end quote. This was after Biden's Surgeon General said that
tech and social media companies must do more to address alleged health misinformation. As we all know now, it was the Biden Administration and agencies like the CDC and NIH that were the disinformers by lying to the public about COVID and its origins, by pushing shutdowns despite their disruptiveness, by ignoring evidence about the ineffectiveness of masks and the failed vaccines, and by censoring information about COVID that they did not approve of. For example, it's clear Google censored search results for the Great Barrington Declaration, which opposed the prevailing and disruptive COVID-19 policies pushed by the Biden Administration and which has now been signed by almost 1 million medical and health professionals. Google almost certainly censors the declaration at the behest of NIH's Fra
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