Google Inc. pampers its employees with free food and many other perks, but the online search engine leader is more stingy when it comes to rewarding the trio of billionaires who run the company.
In a meeting held earlier this month, Google’s board decided not to give 2004 bonuses to the company’s chief executive, Eric Schmidt, or its co-founders, Larry Page and Sergey Brin, according to documents filed Wednesday by the Mountain View-based company.
The men, who consult on most of Google’s key decisions, each received a $1,566 holiday bonus besides their salaries, which are modest compared with most high-profile companies. All Google workers received the same holiday bonus last year. Schmidt collects a $250,000 salary while Brin and Page each receive $150,000 annually, according to disclosures made as part of Google’s closely watched initial public offering of stock.
The wealth created in that IPO ensured Google’s three top executives would never have to work again, if they so desired.
All three men rank among the world’s richest men. Brin and Page each are worth $7.2 billion, while Schmidt is worth $2.8 billion, according to Forbes magazine’s most recent wealth survey.
The executives are cashing out a small portion of their Google stock by selling a combined 16.6 million shares under an 18-month divestiture plan adopted last year.
Even after those sales, Brin and Page will each own about 31 million shares of Google stock, which gained 38 cents to close Wednesday at $178.98 per share on the Nasdaq Stock Market. Schmidt will own 12.2 million shares after the sales are complete.
Google hasn’t always withheld bonuses from its top three executives. The company gave Schmidt a $301,556 bonus in 2003 and doled out $206,556 apiece to Brin and Page.
The company performed far better last year, with its profit rising to $399 million, nearly quadrupling 2003’s earnings.
Page and Schmidt shouldn’t need bonuses to be motivated to drive the stock higher because their fortunes are already tied to Google’s shares , said Paul Hodgson, who studies executive compensation for The Corporate Library, a watchdog group. “This sets a good example and sends a good message to the rest of the employees,” Hodgson said.
It’s not unusual for wealthy high-tech executives with substantial stakes in their companies to collect annual bonuses.
For instance, Microsoft Corp.’s Bill Gates — the world’s richest man — received a $310,000 bonus besides a $591,667 salary in his company’s last fiscal year. Oracle Corp. Chairman Larry Ellison — the wealthiest Silicon Valley executive — received $3.18 million to supplement a $675,000 salary in his company’s last fiscal year.
Google said it paid 2004 bonuses to four executives: senior vice president Omid Kordestani received $700,000; chief financial officer George Reyes received $605,000; general counsel David Drummond received $600,000; and vice president Wayne Rosing received $600,000.
