As you allude, Google's ability to deliver depends on the share price. While they are free from activist shareholders, they aren't free from competition for talent. A rising stock price keeps employees happy. Employees with lots of out of the money options get jealous when their friends experience IPOs.
The OPs point still stands regardless; unless for whatever reason you think you'll get 1) a windfall of stock grants that are 2) calculate from some actual monetary amount divided by the current stock price, you want the value of your stock to go up.
This is in contrast to actually purchasing a stock on the market.
So when the rsu has vested, it is converted to normal stock, where you can sell on the market for cash?
With the smaller Google-specific "well but" limit that insider trading rules restrict employees from trading in the company stock except for narrow trading windows after the company's quarterly reports.
Starting up interesting long-term projects and then canning them at the first sign of a cloudy quarterly forecast is not how you compete for top talent. It just makes the entire company look spastic and irresolute.
Google/Alphabet is in a good position to build the next Bell Labs. Instead, they're building the next Lucent. That's a bummer.
I think most Google employees would fall into either (1) those who don't have enough stocks to care much about stock price, and (2) those who have too much money to care.
When I learned corporate finance it was pretty much a given that a conglomerate should trade at a discount.
Now Google is somewhat insulated from share pressures because they have two classes of stock. This makes the owners think they can use it as their personal playground.
But Google will eventually succumb to shareholder pressure. Why? Because so many employees are soooo heavily invested in Google stock. So even if Larry and Sergey want to do all this cool stuff their executive staff is incented to follow the market. And not only the executive staff but employees at almost all levels. Just so much comp is tied to share prices.
Just think if you were a Google exec with your net worth tied up in Google stock and you're charged with making strategic decisions about where to invest Google's capital budget, you're going to be pretty tempted to direct it towards revenue generating opportunities over and above "science fair" projects. Sure, you'll do your best to kowtow to the CEO's personal projects, but ultimately you and your fellow execs are going to behave more like hedge fund managers. And I wouldn't blame anyone who does.