Hidden Nook

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Saturday, April 09, 2005

Google Billionaires Reduce Their Salary

[Media Source*]

(Posted on BNN)

It seems that the founders of Google, Larry Page and Sergey Brin, as well as CEO Eric Schmidt reduced their salaries to one dollar last year, around the time of their initial public offering of Google.

Before the concessions, Google paid Page and Brin an annual salary of $150,000 apiece. Schmidt collected a $250,000 annually before lowering it to a buck. In the months leading up to the pay cuts, Page and Brin each collected $43,750 of their former salaries while Schmidt pocketed $81,432, according to a filing with the Securities and Exchange Commission.

Last month, Google disclosed that Page, Brin and Schmidt weren’t paid a bonus last year except for a $1,556 holiday reward paid to all company employees.

What makes these guys great is the fact that they refused an increase in pay (something recommended by the board) in order to qualify for a company bonus this year in 2005. CEO's are known to reduce their salaries to one dollar only under two conditions. Either their company is struggling to make ends meet (which is not the case for Google) or the CEO's have a treasure chest somewhere else.

That treasure chest is Google itself with the founders (Page and Brin) owning 27.8% of Google stock (or $7 billion on paper) while Schmidt owns 10.6% of Google Stock (or $2.7 billion). Although Schmidt has the smaller piece of the pie, he seems to be doing well financially as his generosity towards his company is not limited financially.

Schmidt apparently isn’t having trouble making ends meet. In February, he bought a corporate jet that he leases to the company for $7,000 per hour — a below-market rate, according to the company’s evaluation. Google has agreed to reimburse Schmidt up to $2.1 million this year for using his jet.

Each of these men make their living off of selling their stock (in small doses of coarse). It seems their focus is the longevity of their company, rather than the amount in their paycheck, something most CEO's have the other way around (something that a Microsoft Employee will probably confirm for you over at his blog site).

Google seems to have a bright future ahead of it, mainly because of it's leadership and if it continues in that direction people will no longer be talking about how "Yahoo got it's Mojo back" but rather how Google "dominated the world."

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By Darnell Clayton • 12:57 PM • Email Post • •


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