Comments on: Top Google execs: $1 salary, no bonus, no options

Maybe there is such a thing as enough money. Eric Schmidt, Sergey Brin, and Larry Page got no salary, bonus, stock grants, or stock options in 2008.

[ddhboy]

Doesn't that move also help them dodge some taxes?

[emeshuris1]

Well, yes, one gets taxed on what one makes during the previous year.
I would imagine that if you make $1, the IRS would not try to take taxes from that.

[t8]

Never thought of it like that. The ultimate tax dodge and their true wealth is in shares.

[Hairy_Bagel]

Congratulations! You just found a cloud to stick in that silver lining.

[mcbutterbuns]

Good question. Im wondering though if they have to pay taxes when they cash out their stocks or get paid dividends?

[xZero2007x]

@mcbutterbuns:
It depends where the stocks are. If they're in a tax-friendly retirement account, then they most likely don't pay taxes for capital gains until they withdraw/deposit (depending on the type of account).
Otherwise yes, they have to pay taxes for capital gains.

[the_smurf]

What a bunch of suckers. They must not know that there's a minimum income to get the stimulus money! Looks like SOMEBODY isn't getting their $500 stimulus check. :p

[motorush]

Stephen, good & timely article but your statement is a bit misleading.

"Wall Street executives feeling harassed by taxpayers outraged at their pay..." - Execs are not being harrassed by the taxpayers, they are primarily being harrassed by our Goverment (mostly Democrats, Obama, Barney, Dodd & Pelosi - the 3+1 stooges if you will).

The fact that less than half the taxpayers are Liberals, excludes the majority of taxpayers. Those conservatives that believe and support Capitalism.

[emeshuris1]

Ye, liberals are baby killers and smut peddlers!
Capitalism didn't get us into this mess that we're in, treehuggers chained to trees did!
[CNET editors' note: Prohibited content deleted.]

[StuXU]

Actually they have been harassed by tax payers. AIG has had to take its name off its building and protect its executives.

[TV James]

They took their name off because they decided to go by the holding company name instead. Which really is no better - AIU. They should have renamed themselves Philip Morris or Enron for the positive boost the confusion would give them.

[michaelo1966]

Let's look at Democrat leaning business people: Schmidt, Brin, Doerr, and Jobs. Contrast to Republican their leaning counterparts (with apologies in advance for even comparing them): Lay, Fiona, Thaine, and Whitman.

'Nuff said about the politi

[monkeyman1140]

And thus is the problem. Conservatives treat capitalism as a religion, not as a market theory. The idea that business can self regulate is absolutely ludicrous. Its about as rational as the idea that the public can self regulate without laws and police. Take the cops away and the Wal-Marts get looted the next day. Same for big business. Take away the cops and the economy gets looted.

[BPrince6]

to michaelo1966 :
Liberals will of course neglect to acknowledge George Soros as one of their own. The man has his tentacles in so many underhanded things it's not funny. Can't keep his hands out of political advocacy.

to Emeshuris1 :
GOVERNMENT that is spending money like it grows on tree's (or at least exists immune from de-valuation) didn't get us into this mess, meanwhile taking away people's individuality and micro-regulating people's lives, no that had NOTHING to do with this mess, right ?
Please note Barney Frank & Chris Dodd stood on subcommitee's pleading for years that Fannie & Freddie was SOUND AND STABLE. Dodd even admitted to putting in the laungage allowing the Bonuses to happen. And, Both Barack obama and Tim Geitner who either knew about the bonuses weeks before they signed the legislation, but lied about it, or truly are as ignorant about running a country as those who didn't vote for him know him to be.
Please also note that Tim Geitner also sat on an AIG advisory board while decisions that caused this was being made.

to monkeyman:
Please note liberals treat Goverment as religion, not as a governing theory. They take the vision set forth by the founding fathers and take a sledgehammer to it.

[tekwiz4u]

Why cant we have more people like these in corporate america? They know when to draw the line when it comes to having enough money. Good for them.

[dracoaffectus]

There's at least one other top executive famously known for taking only $1/year salary, that is Steve Jobs.

[emeshuris1]

I believe he received a bonus, as evidenced in the following comment:
Apple posted in their most recent annual report that Apple CEO Steve Jobs has received just $1 salary - the same amount as the past 2 years. He also got 10 million shares which if he sold at todays stock price would be worth around $848,400,000.00.

[Vegaman_Dan]

It's not uncommon for corporate top leaders to take this sort of approach. The company pays all the costs of housing, food, travel, etc. When all of that is taken care of, you don't have any bills to pay and don't need a salary. What's better, the company can claim the expenses against their corporate taxes.

It's an old and proven method. It makes those $1 / yr salaries a bit pointless except as PR stunts.

[tekwiz4u]

If you built a business, and its yours...then you have every right to claim it. I rather have them do that then taking millions and laying off people. I dont think its a PR stunt at all. Its more common sense.

[dracoaffectus]

But don't the execs that take multi-million dollar salaries still get taken care of in the same way? Yet they still accept those "competitive" salaries that their company offers. Assuming all execs get about the same perks regarding housing, food, and travel, how exactly is it pointless for them to only get $1 salary as opposed to say $10,000,001 salary. The $10,000,000 that they don't take as pay (which we agree they don't need) can go to improving the company or spreading the wealth to other employees ($500 raises all around!*) The pointless thing in all this are the hundreds of executives that take multi-million dollar salaries that they don't need.


*figure based on $10,000,000 split 20,000 ways. 20,000 is the approximate number of google employees according to Google

[t8]

$1 per year maybe necessary in order to not be considered a volunteer, but an employee. Just thinking out loud.

[Vegaman_Dan]

By taking a $1 per year salary, they also avoid all those lovely income taxes.

[Louise_M]

The $1 salary isn't a PR stunt. It's to make their employment contracts legal. A contract requires that there is a "consideration" on each side. In simple terms each party must give something to the other for a contract to be in force. You also see this with "peppercorn rents" where a symbolic rent is charged for the use of the building.

[BigGuns149]

In the case of people like Brin, Page, and Schmidt they own a large amount of Google stock and already have considerable amount of wealth. In the current economy it is probably better for their stocks to forgo salary and additional options under the idea that the continued success of the company will increase the value of their stock and in the long term make them wealthier than taking a bunch of money now. In the long term view paying their execs hundreds of millions of the dollars in penny wise and pound foolish. As long as Google is still growing the execs are better off reinvesting much of what would likely be a 9 figure compensation package back into Google until Google reaches a mature status in a few more years. Google's growth is certainly slowing, but they still have a few more years of easy growth.

[aSiriusTHoTH]

What... like Steve Jobs earning $1/yr? Of course not....

[techman21]

So they'll get all the tax money that was withheld through the year - that won't be too bad.

[dascha1]

Whatever you do, google execs, don't move to DC unless you're feeling somewhat patriotic. You'll be required to play by those rules. They can be quite confining these days esp. for those trying to break free of the middle-class to create jobs and wealth for those individuals.

[Draxon]

Ummm the rules are applied to companies that took hundreds of billions of dollar's in bailouts from the government. Since Google is a competent company that isn't surviving on government hand outs it would not matter where they are DC or not. I'm sorry but you are wrong.

Nice spreading of FUD though...

[dascha1]

Rule of thumb (research it) - always provide words that define your Acronym. it will help others understand what it is that you actually mean.

[renGek]

These guys are busy innovating, creating and making your life grow. Whether you like their products are not, it will eventually affect other projects. People like them who already made a ton of money are not concern about skipping a yearly salary/bonuses for a while. They do what they do because they are passionate about it. I've worked for almost 20 years as a programmer. For most of my career its just been a job working for various financial institutions and getting jacked by them when the economy is bad. But then finally I found a job that is incredibly worthwhile and helps people. The money is good but for the first time I am willing to put in longer hours because the work is good and I don't expect to be paid for those extra hours that I volunteer to put in. So I understand some of how they think. And no, I don't work for google.

[hutwarmer]

how does 1 dollar get paid out? Is it ove 26 weeks? monthly? annually?

[Jack K1]

Damn tax dodgers!

[dracoaffectus]

While it seems inherently noble to only take $1 salaries, it does seem like a slick way to avoid income taxes. Now I firmly believe that no CEO should be earning the $14,200,000 average*, but it does seem dubious that they are taking over half a million in benefits from the company, which the company probably gets to deduct (I am definitely not an expert on corporate tax law). A better solution seems to be paying them a reasonable salary (note: 14.2 million is well beyond reasonable), and not paying for their personal expenses from the company coffers. That way they still pay their income taxes like they're supposed to, and those insanely high CEO salaries can be reined in.


*"The chief executive of a Standard & Poor's 500 company made, on average, $14.2 million in total compensation in 2007, according to preliminary data from The Corporate Library" (<url="http://www.aflcio.org/corporatewatch/paywatch/">)

[Hairy_Bagel]

"Schmidt received perks totaling $508,764 in 2008, up from $480,561 the year before. That covered $402,562 in personal security costs and $106,201 Google paid to fly his family members and friends on paid chartered flights. "

In what world does a company spending a half million dollars in perks on an executive sound less reasonable than paying that same executive something between that half million and the 14.2 million (which is the average salary)? Salaries at any company are written off as an expense anyway, so if anything, Google is increasing their exposure to taxation because they aren't paying these guys any salary that can be written off.

These guys could have asked for the world, and the Board would be out of their minds not to pay them whatever they asked. Instead, they're working for a buck, and the only thing the company has to pay for is travel for them and their families. I don't get how this could be a bad business decision...

I'm no Google fanboy, but I think it's ridiculous to try to make these guys out to be villains when they haven't technically made any money this year and are basically working for free.

[Draxon]

The problem with your theory is that for people who are CEO's of large companies the line between personal expanse and business expanse is very blurred. Is going to a big dinner in DC with a Ball after it personal or business? What if your networking? Same thing with a game of golf is that personal or business? Considering you ALWAYS representing the company everywhere you go it is in the share holders best interest to have a stake in your personal life and the quality of the image you present. Given that it is only reasonable that the company to cover said expanses.

[BigGuns149]

I agree that the average is too high, but I have to disagree with you that no CEO should earn >$14.2 M. Take the example of Exxon Mobile. Last year according to public data they made $96 Billion in profit. Not revenue, but profit. If a good CEO makes the difference of merely 0.5% in profit, which isn't a very huge percentage than a good CEO would make a difference of HALF a billion dollars in profit. I think we all can agree that some management decisions make far more difference than 0.5%, but I am using a small percentage to prove a point of how silly your statement is. Even if you reinvested 75% of what the employee earned for the company back into the company the CEO would deserve a 9 figure compensation package.

The moral of the story is that 14.2 million sounds like a lot, but given a large enough company that isn't all that much money for how much difference one's decisions can make in the profit of the company. I think that a CEO's pay shouldn't be some absolute dollar figure, but rather a certain percentage of the total profits.

[George_Marenco]

Tax evaders!

[Hairy_Bagel]

Good lord, they aren't tax dodgers. You need to have an income to levy taxes against in order to be able to "dodge" them. You couldn't even get a cup of coffee at Starbucks if you COMBINED their salaries. They're each significant shareholders of Google, so it behooves them to maximize the company's value.

They each own at least 9 million shares of stock. If they're able to raise the stock price (I think the story says it's Class B) by even a single point, they've each just increased their own worth by at least $9 million dollars each. could you see them taking that same $9million as a salary instead? Now, imagine shareholder reaction if you paid each of them a $9million salary every year. The people complaining about them being tax dodgers would rather see them take a large salary and pay the taxes on that, even if it means possibly lowering the value of the company, which to me seems asinine and reeks of "cutting off the nose to spite the face".

They're doing what every stockholder wants out of their management team, and that's to make each share worth as much as possible.

[coyote_ptm]

I have no issues with the 3 at google - they made google and really- changed the world. Google pays there expenses - ya and I'm ok with that too.

They pay taxes on any stock they sell - and now, thanks California, 9.25 % sales tax on anything purchased starting April 1.

When you are worth north of a billion dollars, you don't require a salary, and it's good PR for Google too.

[mjhedger]

I don't have a problem with Google having high salaries with bonuses, because they're a successful business and taxpayer monies are not being used to keep the company afloat. The result should be good salaries and bonuses. That's the way it out to be: The company is successful, it's employees are rewarded.

[elochte]

Google is a class company and always has been, but I would like to give you an example of what my own Executive Team did. We own a small business that generates about $10 million per year. We have a six person Executive Team and nobody makes more than $150,000 in compensation. We employ 52 people across three states. Rather than incur a single layoff, my Executive Team volunteered to take a 20% pay cut so that 7 employees could keep their jobs. Three of the Exec. members that gave up around $30,000 each, have two kids, big mortgages and little to no savings. That's sacrafice. I am not sure taking a $1 salary when you already have a billion in stock options is a sacrafice. It's still a class move. Perhaps the press should start writing about real sacrafice and stop trying to work Google into every freaking story. It's getting old, and I like Google!!!!!!!!!!!!!

[Malumprohibitum]

Perhaps if Google started taking a stand and putting privacy rights of the individuals they spy on before cowtowing to every despotic regime on the planet, we'd all jump on your bandwagon.

[Highspade]

@Malumprohibitum

Did you even read what he said? People like you should pause a moment and reflect on what you are reading before you spout off.

[anyport]

The economic ignorance demonstrate in some of these comments is staggering. Yes, you can eliminate tax liability by having no income ... you're all free to use that method if you need no earned income to live. You get to keep all of nothing rather than part of something ... go for it!

I hate to disappoint those who think tax refunds are free money, but you don't get a tax refund when not paying tax. That refund was you money you let the government keep without paying interest. This is akin to the mentality that you need a mortgage deduction to save on taxes rather than be debt free. Giving someone a dollar to get 25-30 cents back is not a savings strategy.

Lastly, this company is no longer the property of the founders to do with as they please. It's now publicly owned and the property of the shareholders. They are now employees.

[BigGuns149]

Generally speaking most checks that the IRS sends out to taxpayers are simply refunding taxes that they overpaid, but that isn't always the case. Millions of people really do get more money back than they send to the IRS (ie. they have a negative tax obligation). The EITC actually allows taxpayers to get more money back than they paid in.

[telecomcircle]

Google might be past its prime as I do not see the same passion as they had when they started the company. They no longer seems to have the consumer insight. Read the full article at http://www.telecomcircle.com/2009/02/google-has-the-growth-hit-the-ceiling/

[joye68]

They still pay taxes folks, and far more than one would think based on the assumptions here. Personal benefits aside, a happy employee is a productive employee. Isn't that what we as a nation have been ******** and moaning about for years? So what they get more than the average joe? They've put their blood, sweat and tears into it. These guys are proven money makers who didn't need to rob Peter to pay Paul and make it "appear" as though they had earning potential. These guys have enabled the world to come to our homes at a far faster pace than we ever imagined 10-20 years ago and at a far cheaper rate.

The good thing here is that they have their hearts and souls in this company enough to STILL do the $1 salary. They know how to live off what they have earned, as opposed to what they can get out of it in the short term and then bail. They're smart enough to know that if the bottom falls out, they will still have losses to face. That would be a lot of motivation for me anyway, to "maximize the company's value". Any negative tax obligation will be offset by other taxes on any interest. "The Earned Income Tax Credit or the EITC is a refundable federal income tax credit for low to moderate income working individuals and families." These guys don't qualify for that on any level, regardless of perks or stock options or liquidity. Assets are assets.

These 3 have earned their stock options. The company is still successful (albeit I think in process of an evolution of sorts-branching out so to speak). If we were in their shoes, (hell, if I even had their shoes!), would we be able to say we were able to attain the same level of respectability in business or would we have been one of those people who succumbed to the higher salaries and continue to take what we felt we deserved thus having the company attempt to pay out millions in bonuses they didn't have, by getting it from the government.

If Google were my company and I had poured my life's blood into it to make it successful, I would expect successful returns as well.

[abhijeet_misra]

This story has nothing more than paparazzi value.

[galeso]

Is Google exempt from minimum wage laws?