Until now, business operations has been managed by Shona Brown, who had also once run “People Operations,” as human resources is called at Google.

More recently, HR has been run by VP Laszlo Bock, who initially reported to Brown and later directly to former CEO Eric Schmidt.

He will now report to Pichette, sources said.

Brown will narrow her duties to leading Google’s philanthropic efforts, via Google.org. She takes over from new business development VP Megan Smith (please see disclosure below), who has run “Dot Org” on an interim basis as its general manager since the departure of its initial high-profile Executive Director Larry Brilliant in 2009.

Google declined to comment on personnel matters.

Brown has been with Google since 2003 (which was well after Larry 1.0; Eric Schmidt became CEO in 2001). Here’s how my colleague John Paczkowski described her role last week:

Before she came to Google, Brown spent a decade consulting for McKinsey and is widely credited with optimizing Google’s internal structure.

But Page is not a McKinsey guy and he’s obviously not a big fan of Google’s current management organization anymore.

That might not bode well for the legendarily sharp-elbowed Brown who most sources describe as highly strategic but also as extremely difficult to work with.

Still, if Page is tinkering with the way Google is organized, Brown might also be the one he turns to to find a new structure.

That said, he seems to be fine doing it on his own and some suggest Brown will move to another role within the company rather than leaving.

Not all agree.

Said one source: “I wouldn’t be shocked to see Shona go. Frankly, I’m surprised she survived as long as she did, but then I didn’t think Rosenberg would last this long either.”

But, said another about Brown, who has previously taken time off from Google and returned: “I’d never count Shona out.”

Page’s big reorg aims to make the 12-year-old company he co-founded faster and more innovative to fend off the stagnation of middle age. The first step was removing long-time product chief Jonathan Rosenberg, followed by the elevation of seven long-time product leaders to senior vice president of their respective domains: Sundar Pichai (Chrome), Vic Gundotra (social), Andy Rubin (mobile), Salar Kamangar (YouTube), Alan Eustace (search), Susan Wojcicki (ads) and Jeff Huber (local and commerce).

And as for the newest big winner, Patrick Pichette? Unlike many of the others in Page’s inner circle, Pichette is a more recent Googler. After spending seven years at Bell Canada, Pichette replaced the retiring George Reyes in 2008.

Pichette has been a regular presence on Google quarterly earnings calls, the next of which is this Thursday at 1:30 PT. While whatever Google did in the first quarter of 2011 was surely interesting, the call should be the first public comment on the new Page regime. It will be a big test for Page, who notoriously loathes the public eye.

Meanwhile, Google’s management bio page should be sent packing to the Internet Archive any day now.

While it’s only a week out of date–my, how things have changed.

(Full disclosure: Smith is married to All Things Digital Co-Executive Editor Kara Swisher.)

In China, the search giant is battling hackers and the government, who may be one and the same. In Europe, the company is being hauled in front of an antitrust review. And Italy? Total disaster.

Yesterday, an Italian court convicted three Google (GOOG) executives of privacy violations in a case that stems from a clip uploaded to Google Video in 2006. The executives, who include former CFO George Reyes, have been sentenced to six-month prison sentences.

And that verdict follows a December ruling whereby an Italian court found the company guilty of copyright violations on YouTube, the video site it bought in 2006. Mediaset, the broadcaster that brought the suit–and which is controlled by Prime Minister Silvio Berlusconi–is looking for more than $730 million in damages.

Google has responded to the video convictions with an outraged blog post. Note that the language is more forceful than the company used to describe its China problem. But also note that the company isn’t threatening to pull out of Italy altogether. Maybe it should.

Serious threat to the web in Italy
2/24/2010 01:57:00 AM
In late 2006, students at a school in Turin, Italy filmed and then uploaded a video to Google Video that showed them bullying an autistic schoolmate. The video was totally reprehensible and we took it down within hours of being notified by the Italian police. We also worked with the local police to help identify the person responsible for uploading it and she was subsequently sentenced to 10 months community service by a court in Turin, as were several other classmates who were also involved. In these rare but unpleasant cases, that’s where our involvement would normally end.

But in this instance, a public prosecutor in Milan decided to indict four Google employees–David Drummond, Arvind Desikan, Peter Fleischer and George Reyes (who left the company in 2008). The charges brought against them were criminal defamation and a failure to comply with the Italian privacy code. To be clear, none of the four Googlers charged had anything to do with this video. They did not appear in it, film it, upload it or review it. None of them know the people involved or were even aware of the video’s existence until after it was removed.

Nevertheless, a judge in Milan today convicted 3 of the 4 defendants–David Drummond, Peter Fleischer and George Reyes–for failure to comply with the Italian privacy code. All 4 were found not guilty of criminal defamation. In essence this ruling means that employees of hosting platforms like Google Video are criminally responsible for content that users upload. We will appeal this astonishing decision because the Google employees on trial had nothing to do with the video in question. Throughout this long process, they have displayed admirable grace and fortitude. It is outrageous that they have been subjected to a trial at all.

But we are deeply troubled by this conviction for another equally important reason. It attacks the very principles of freedom on which the Internet is built. Common sense dictates that only the person who films and uploads a video to a hosting platform could take the steps necessary to protect the privacy and obtain the consent of the people they are filming. European Union law was drafted specifically to give hosting providers a safe harbor from liability so long as they remove illegal content once they are notified of its existence. The belief, rightly in our opinion, was that a notice and take down regime of this kind would help creativity flourish and support free speech while protecting personal privacy. If that principle is swept aside and sites like Blogger, YouTube and indeed every social network and any community bulletin board, are held responsible for vetting every single piece of content that is uploaded to them–every piece of text, every photo, every file, every video–then the Web as we know it will cease to exist, and many of the economic, social, political and technological benefits it brings could disappear.

These are important points of principle, which is why we and our employees will vigorously appeal this decision.

Posted by Matt Sucherman, VP and Deputy General Counsel–Europe, Middle East and Africa

Robert A. Eustace, SVP Engineering & Research: $1,376,000

Omid Kordestani, SVP Global Sales & Business Development: $1,376,000

Patrick Pichette, CFO: $1,244,000

George Reyes, former CFO: $675,000

Jonathan Rosenberg, SVP Product Management: $1,638,000

Larry Page, Sergey Brin, Eric Schmidt: $0

All fine payouts, to be sure (Larry, Sergey and Eric never take a cash bonus). But for the record, note that these do represent a small tick down from last year, when Eustace, Kordestani, Reyes and Rosenberg each got cash bonuses of $1,683,606. Then again, a year ago, GOOG was trading at $471; this morning it’s at $327 and change.

We should get full compensation info–including how much execs received as base salary and how much they got via stock grants and options awards–within the month when Google releases its annual proxy statement.

It’s taken nearly a year, but Google (GOOG) has finally decided on a replacement for departing CFO George Reyes. Bell Canada executive Patrick Pichette, who served as the telecom’s president of operations and CFO, will take over for Reyes on Aug. 12.

“Google is a great company with a phenomenal brand and an outstanding management team,” said Pichette. “As an avid user of Google products, I’ve admired the company for many years and am excited about working with my new colleagues in Mountain View and around the world.”

Excited about his new compensation package too, I bet: $450,000 a year base salary, stock options, a signing bonus of $500,000 and an additional $500,000 after six months and eligibility for a discretionary bonus of up to 150% of his base salary (see offer letter below).

And as for Reyes? Well, having joined Google well before its 2004 initial public offering, he will presumably be spending the remainder of the summer enjoying some of the obscene wealth that the IPO created. When he first announced his plans to leave Google, Reyes was holding more than 50,000 exercisable options. As of June 3, he held a bit more than 10,000.

Pichette’s offer letter after the jump.

June 6, 2008
Patrick Pichette
Re: Offer of Employment with Google Inc.

Dear Patrick:

On behalf of Google Inc., I am pleased to offer you the exempt position of Senior Vice President and Chief Financial Officer, reporting to the Chief Executive Officer, subject to the terms and contingencies set forth below. The position is located in Mountain View, California. Your start date shall be August 1, 2008 and you will assume the position of CFO effective August 12, 2008.

You will receive an annual salary of $450,000, which will be paid biweekly and subject to a periodic review. You are eligible to participate in the Company Bonus Program; your annual bonus target will be 150% of base salary. Bonuses under the Company Bonus Plan are discretionary. The actual bonus amount could be larger or smaller than this amount, based on your performance and the performance of the Company. Whether a bonus will be awarded in a particular bonus period, and in what amount, is within Google’s sole discretion. Both your base salary and the components of your bonus are subject to periodic review.

Additionally, upon your start date, Google will pay you a one-time Sign-On Bonus of $500,000. This will be taxed as supplemental income. At the completion of six months of full-time employment with us, Google will pay you an additional $500,000 Cash Bonus. This will also be taxed as supplemental income. In the event your employment is terminated within the first six months of your employment, the Cash Bonus payout will be accelerated and paid on the termination date or as soon thereafter as Company business practices allow, but in any case within thirty (30) days of your termination. If you terminate your employment at Google before the one year anniversary of your start date, other than as a result of a breach by Google of this Agreement, you will be required to repay the Sign-On Bonus and Cash Bonus. Any required repayment will be prorated based on the number of remaining calendar days until the one year anniversary of your start date.

Google will pay relocation costs and provide reimbursement for specified moving expenses as outlined in Google’s North American Officer Relocation Policy. In order to receive these benefits, you will be required to work with a third party vendor provider designated by Google to assist in employee moves.

As a regular full-time employee you will be eligible for various benefits offered to similarly-situated Google employees in accordance with the terms of Google’s policies and benefit plans. Among other things, these benefits currently include medical and dental insurance, life insurance, and a 401(k) retirement plan. You will automatically be enrolled in the 401(k) plan at 4% into the Wellesley Fund, which is a balanced fund of stocks and bonds. You will be able to change your deferral amount and fund allocation upon your hire. The eligibility requirements and other information regarding these benefits are set forth in

Wow. Reyes’s Sarbanes-Oxley jokes must have been a laugh riot. Anyway …

High-level executive departures like Reyes’s are something of a rarity at Google. Reyes (pictured in the photo illustration above, right), who came to Google in 2002, is only the second third key executive to leave the company since Cindy McCaffrey (hot tub, above left), Google’s vice president of corporate marketing, and Wayne Rosing (hot tub, above center), its VP of engineering, retired. And though Reyes didn’t say why he decided to step down, his reasons for doing so are clear to anyone who pays attention to the company’s share price. At closing bell yesterday, GOOG was trading north of $500. And as of last December, Reyes–who’s sold off $259.5 million of Google stock since August 2004–was still holding 51,750 exercisable options.

Strike price? Five dollars apiece.