nytimes.com — The Internet search giant paid its top executive, Eric E. Schmidt, a salary of $1 and a holiday bonus of $1,723 in 2006, according to a regulatory filing Wednesday. But Mr. Schmidt’s personal security cost shareholders $532,755, representing the bulk of his compensation.
Apr 5, 2007 View in Crawl 4
chumpchiefApr 5, 2007
And yet it's less than what he could be getting paid if he wanted.
rabbibizarroApr 5, 2007
Trinitrogen - Google doesnt pay dividends.
halgyApr 5, 2007
Why are you complaining? Google is one of the few companies out there that works!
pikespeakhikerApr 5, 2007
@coolestkid-That is a reasonable analysis except for one thing - AMT. Excess capital gains will trigger AMT, and these guys will pay >>>>5% on the stock they sold
ieathamburgersApr 5, 2007
So he would get lost all the time because he couldn't find the right driver? :p
robh1Apr 5, 2007
A low salary is probably in Schmidt's self-interest. Let's say Schmidt could have his choice of a $1m salary or nothing. If he takes $1m, he clears ~$600k after Federal and CA taxes. If he takes nothing, Schmidt's salary, less 23% taxes (latest 10-K) goes to Google's bottom line and Google's earnings improve by $767k. At the current P/E ratio of 40, Google's market cap increases by $30m. Schmidt owns 4% of Google, meaning that his portion of that $30m is $1.2m. A good deal! There's a catch, though, Wall Street has to believe this 'profit improvement' is sustainable. For the stock to stay at that higher valuation, Schmidt has to continue to give up his salary, making this deal a loser for him after two years.I have no idea how this is being played inside Google, but if Schmidt goes on to use his low salary as a reason why executives reporting to him should accept lower salaries and so on down the line, the savings quickly add up. Because Schmidt owns more than a few percent of the company he would actually come out ahead in this transaction, as would Google's shareholders generally. This extreme transaction works for him because he owns so much of the company. Whether this works for other Google employees depends on how much their salary is held down versus what percent of the company they own.
deardeardarlaApr 6, 2007
Clever is as clever does!While average Americans go deeper into debt via federal budget deficits, the clever find legal tax evasion loopholes such as this. Who said American ingenuity is dead!
jozer99Apr 7, 2007
So you are saying that an important official in a multi-billion dollar company was ONLY paid $532,755? That sounds like good news to me, especially with the President of Ford Motor Company getting paid $28,000,000 PER QUARTER ($112,000,000/year).