Google CEO Sundar Pichai tells employees 'we are not going back in time' after sexual misconduct settlement

Key Points
  • Alphabet and Google CEO Sundar Pichai told employees to let Friday's sexual misconduct settlement be a signal that the company is "not going back" to how it operated in the past.
  • Pichai's tone toward employees was more serious than that of the company's public-facing statements.
  • Friday, the company reached a settlement that included a $310 million diversity initiative and sweeping changes to its executive compensation and reporting policies. 
Alphabet CEO Sundar Pichai gestures during a session at the World Economic Forum annual meeting in Davos.
Fabrice Coffrini | AFP | Getty Images

Alphabet and Google CEO Sundar Pichai sent a stern warning to all employees Friday, pointing them to a new settlement between the company and shareholders who alleged it did not respond appropriately to claims of sexual misconduct and harassment.

"I hope these commitments will serve as a strong signal to all of you that we are not going back in time," Pichai said in a brief memo to employees, which CNBC viewed. 

The settlement includes a $310 million commitment to fund a council to oversee diversity and equality issues, as well as sweeping changes to policies that includes eliminating mandatory arbitration, guardrails on payouts for alleged harassers, and limits on the company's use of non-disclosure agreements for employees involved in cases.

The memo shows Pichai striking a harsher tone than that of the company's Friday blog post, which outlined changes and framed them as a result of Google's internal efforts. It also comes as Pichai, whose executive team initially approved of the payouts of executives in question like Andy Rubin, has been trying to reshape some aspects of the company's culture since he took the helm of Alphabet last December. 

"It's very important to me that we hold ourselves to the highest possible standard as a workplace on issues of misconduct, and provide care and support to people who report it," Pichai stated in Friday's email. "I've been working closely with our teams and our board to ensure that we are doing this."

In 2019, shareholders filed a lawsuit against Alphabet's board of directors for allegedly shielding senior execs from accusations of sexual misconduct, claiming a breach of fiduciary duty, abuse of control, unjust enrichment and waste of corporate assets. CNBC later reported the board had formed an independent subcommittee and hired a law firm to investigate how executives handled claims of sexual harassment and other misconduct by chief legal officer David Drummond and other execs.

In the year that followed, several executives named in the lawsuit, including Drummond and co-founders Larry Page and Sergey Brin, retired from their formal executive roles at the company.

"I'm personally dedicated to doing the hard work ahead and building on the progress we've been making together to build a better Google for everyone," Pichai's note closed.

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