To clarify, I can say from experience (having personally helped convert 6 engineering residents at Google), I'm pretty confident the "less pay and a smaller stock refresh" in the article is referring to conversion offers to FTE and stock refreshes after the first year of FTE employment, not to their pay during their residency. Those FTE conversion offers were terrible, from what I saw, with no room for negotiation. The residency program had given these candidates 1 year to build a proven track record of performance and they were fully ramped up by the end, so there was no risk to Google at the time of those offers; if a resident was given an offer, it was because they were a pretty sure thing (far more than any normal interviewed hire). As such, I think their offers should have been higher than a regular hire, not lower. (As someone who was hired direct out of college with little experience, I can confidently say the offers my residents got were _significantly_ lower than my starting offer at the same level.) The article states this a bit unclearly, but I'm pretty sure this is what it means, because it doesn't make sense to refer to year-end bonuses or stock refreshes during residency because they aren't long enough to get these regardless (and I never heard anyone complain about this).
That said, as a side note, I do think articles like this tend to sensationalize Google as a whole as the "bad guy". Try to remember, Google is a huge company with lots of people managing its many parts. I personally feel there was a failing here, but if so, it was the fault of a relatively small number of people, not "Google". Even most of the people running this program were good, and the program itself was great (as you said) other than what I said above. There's hundreds of thousands of decisions happening every day at Google. If just a couple bad ones get to define the company as a whole, then no large company can ever be good, no matter how good all the rest of those decisions are.
That said, as a side note, I do think articles like this tend to sensationalize Google as a whole as the "bad guy". Try to remember, Google is a huge company with lots of people managing its many parts. I personally feel there was a failing here, but if so, it was the fault of a relatively small number of people, not "Google". Even most of the people running this program were good, and the program itself was great (as you said) other than what I said above. There's hundreds of thousands of decisions happening every day at Google. If just a couple bad ones get to define the company as a whole, then no large company can ever be good, no matter how good all the rest of those decisions are.