Alphabet shares hit a new record high on Wednesday, $3.8 million to be spent by Google to settle pay, hiring bias accusations

According to an announcement by the US Department of Labor earlier this week, Alphabet Inc’s Google will seek to settle allegations, that it underpaid female employees and unfairly passed over female and Asian candidates for job openings, by spending $3.8 million.

Alphabet shares closed higher for a third consecutive trading session on NASDAQ on Wednesday. It has also been the sharpest single-session gain since April 29th 2020. The stock went up 7.40% ($142.56) to $2,070.07, after touching an intraday high at $2,116.03 and also a fresh all-time high.

Shares of Alphabet Inc have risen 18.16% so far in 2021 compared with a 1.97% gain for the benchmark index, S&P 500 (SPX).

In 2020, Alphabet’s stock went up 31.03%, thus, it again outperformed the S&P 500, which registered a 16.26% gain.

An investigation by the Office of Federal Contract Compliance Programs had found “preliminary indicators” that between 2014 and 2017, at times, 2,783 women in Google’s software engineering group in Mountain View, California, as well as in the Seattle region were underpaid.

The investigation also found hiring rate differences, which placed women and candidates of Asian origin at a disadvantage during the year ended August 31st 2017, for roles in software engineering in San Francisco and Sunnyvale, California, as well as in Kirkland, Washington.

According to the settlement, which urges Google to review hiring and remuneration practices, 5,500 employees and job candidates will receive $2.6 million in back pay.

At the same time, $1.25 million will be set aside for pay adjustments for engineers in Mountain View, Kirkland, Seattle and New York over the upcoming five years.