A proxy statement filed with the Securities and Exchange Commission showed that the ruling triumvirate of Eric Schmidt, Larry Page, and Sergey Brin each chose to keep their salaries at $1 annually.
“It was like falling down an elevator shaft and landing in a pool full of mermaids.”
— the late Hunter S. Thompson described how his career took off.
With the third issuance of new Google (NASD:GOOG) stock having been announced, Google’s founders and CEO have chosen to maintain their confidence in its performance and will continue their practice of preset stock sales through 10b5-1 plans.
The 14A filing noted how Google’s compensation committee offered raises to all three based the company’s performance, but all three declined:
…the Committee determined that an increase in cash compensation opportunities was merited, and we offered Eric, Sergey and Larry an increase in salary and bonus for 2006. Due to their own preferences not to receive salary and bonus compensation at this time, Eric, Sergey and Larry rejected the offers and continue to receive salaries of $1. Their primary compensation continues to come from returns on their ownership stakes in Google. As significant stockholders, their personal wealth is tied directly to sustained stock price appreciation and performance, which provides direct alignment with stockholder interests.
In the 14A filing with the SEC, which shows executive compensation, Google’s top trio accepted their $1 salaries but all received modest bonuses. Page and Schmidt each picked up $1,630, while Brin made $1,723 in bonus money.
Before the company’s IPO, all three earned salaries commensurate with their place in the technology industry. With the IPO approaching in 2004, they decided to forgo their salaries at that time as well.
While the company has performed well financially, it has occasionally given its followers and shareholders cause for concern with the way it handles communicating information. Google’s plans to offer a service that would securely store a “Golden Copy” of all of a user’s data was inadvertently revealed when notes attached to an analyst day presentation were not removed before it was posted online.
Schmidt has caused some of the problems himself. Recently his comments that Google had a goal of becoming a $100 billion company caused some confusion. Google was valued with a market cap well in excess of $100 billion at the time. His response to reporters’ follow-up questions, “I’ll leave it to you to judge whether that is $100 billion in market capitalization or revenue,” was not well received.
Google may be taking steps to avoid issues like that as well as its famous two-month ban on talking to CNet News reporters last summer. Both Google’s internal public relations and its agency, Ogilvy PR, have recently been much more proactive in approaching writers and offering talks with Google insiders about products, a sea change from the company’s usual silent approach to anyone who wasn’t Danny Sullivan of Search Engine Watch over the past year.
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David Utter is a staff writer for murdok covering technology and business.
