In an SEC filing yesterday (click here), Google disclosed that in 2006 each of its top three executives, Eric Schmidt (CEO), Sergey Brin (President of Technology), and Larry Page (President of Products), will receive a base salary of $1.00, as they did in 2005. Itâ€™s not like they have historically gotten huge bonuses either. According to Googleâ€™s 2005 proxy statement, each of them received a $1,566 bonus in 2004 and total other compensation of less than $3,000 and no stock options, although their base salaries were much higher in 2004 ($81,432; $43,750; and $43,750; respectively), at least compared to $1.00.
Does this reflect Googleâ€™s principle of â€œdonâ€™t be evil?â€? Are they saying excessive executive compensation is evil so they will basically forgo compensation? Maybe. But the filing says these salaries were approved â€œafter a review of performance and competitive market data.â€? They must be referring to Steve Jobs’s salary at Apple (it is also $1.00).
Maybe instead itâ€™s all about branding. Blog posts and other publicity about its top executives working for $1.00 will enhance the Google brand, which will enhance the stock price, which will enhance the value of the Google holdings of Messrs. Schmidt, Brin and Page by a couple of $100 million, give or take.
Remember, these are the guys that tied the number of shares issued in their follow-on offering to the number pi (pi=3.14159265; Google sold 14,159,265 shares in the offering), so who knows. Obviously they have way more money than they will ever need. But so does Jack Welch, and he got GE to agree to pay for floor-level seats at the New York Knicks, Grand Tier seating at the Metropolitan Opera, private waitstaff and monthly flower deliveries (he has since released GE from these obligations).