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Google Founders Cut Salaries to $1
GeneralCern writes "MSNBC Reports that Google founders Larry Page and Sergey Brin, and CEO Eric Schmidt
all slashed their salaries to $1
last year. Since you do not have to pay FICA, Medicare, or income taxes on
the capital gains associated with stock sales, they stand to substantially decrease
their tax burden. Is this a breach of the company's "do no evil" mission
statement, or just an example of people who love their jobs so much they don't
need to be paid to go to work?" Update: 04/09 13:11 GMT by H :And don't trust the above tax lines; it all depends on how sales are done; moreover when you are worth X amount with stock, I suspect the "tax burden" of what is, relatively speaking, a salary that's small compared to networth isn't a substantial impact. Sorry folks; poor story.
They will get paid by stock options and alike, paying much less taxes for the same income... anyway, I think it is more a PR stunt ("we work because we are fierce of our product") than any other thing...
Why can't
Does the US have a minumum wage?
Can you get done for underpaying yourself, or does the wronged party have to complain to start legal action?
# cat
Damn, my RAM is full of llamas.
Now i don't want to be google's next CEO any more.
var sig = function() { sig(); }
e.g.
http://www.google.co.uk/search?q=define%3Abreach
or
http://www.google.co.uk/search?q=define%3Abreech
Paying less taxes is funding less evil. What more can one say?
It's neither a breech of "do no evil" nor an example of their love of work... it's a legitimate way of avoiding paying tax which is standard practice for business leaders everywhere.
Total non-story; yet completely on message for the nonsense that Slashdot has decended into over the past few years. News for nerds? Barely. A barrage of pointless bollocks? Definitely.
What a ridiculous post. How could you possibly draw an association between minimizing personal income tax and Google turning 'evil'.
Sergey Brin is, according to Forbes, already worth $7.2B. Wouldn't it be great to be so incredibly rich that you did'nt have to worry about personal income ever again?
Anyway, this is PR that's probably worth way more than the salary itself. Steve Jobs does the same thing, IIRC.
When the companies "company" is based on those algorithms how can you not patent them!
Dashboard Widgets
One *always* pays taxes on capitals gains from stock sales. Has nothing to do with salary.
Is it me or does the article poster spin from the left and ignore facts ?
It's never evil to stick it to the man!
Sugapablo
Apple has been evil for a few years.
Not a Twitter sockpuppet... but I wish I was.
It's just one of the many idiocies that arise from taxing "unearned" income less than "earned" income. Income from all sources should be taxed the same, to avoid giving people reason to come up with complicated schemes to move their income between categories. But given that the tax system sucks, you can't blame people for taking advantage of that fact.
Look,even if I pay 75% tax on 200,000 dollars I STILL MADE MONEY! 25% of X == > 0 if X !=0. They got payed less, how is that anything bad?? Sad that the posts on /. are trolls these days.....
Does that mean that in soviet Russia Slashdot posts you?
Oh,for the love of gos and country, kill me.
I mod everyone down who says "I'll get modded down for this." I hate to disappoint.
Quit your whining, people. Oh, and look up the "Minimum Alternative Tax" while you're at it. It may have been a good idea at first, but it's getting to be a real mess these days.
#naabhaprzrag, #sverubfr-000, #agi-fcbafberq, negvpyr[pynff*=' negvpyr-ary-'] { qvfcynl: abar !vzcbegnag; }
The article poster stated that you don't pay FICA tax (another word for social security tax), medicare tax or income tax on stock appreciations. That is completely true and all of those are different than capital gains tax - which is what they would pay based on appreciation in their stock price.
I believe the article poster's premise is that they're becoming ungodly rich because of stock appreciation and that they cut their income to $1 per year to avoid contributing to society in the way that the rest of us do.
If I had to pick a reason, I'd say it's more of a PR stunt to make the Google founders appear frugal (or froogle if you like) and make it seem like the money hasn't gone to their head. Many other CEO-types have done this (including Steve Jobs).
I'm a big tall mofo.
They are a company. Their sole point of existance is to make money. They aren't a charity FFS.
They have employees that need to be paid, and they have probably enormous bills that need to be paid. Its going to be in their interest to make money.
I think as companies go, they are pretty generous.. they still get respect from me.
"Hey! Unless this is a nude love-in, get the hell off my property!!"
To Google, evil means ruining the web experience for its customers and users. Given that Google defines evil as such, it is doing a marvelous job of living up to its promise.
Evil is a subjective concept. To you, and others, perhaps, patents are wrong. But to Google, the sole criterion for evil is the user experience. Therefore, patent issues do not apply.
Could you describe the things Google has done that are not "nice"?
:-(.
I haven't seen any Google products that aren't pretty darn impressive, and free for use by the public.
Yes, they make their money off advertising, and that's great. It gives us free toys and advertisers get exposure, just like old-fashioned over the air TV.
What's wrong with making money by providing great services? If they lose money, they can't provide the services anymore
D
I'm sorry, it's doing evil. How can you patent a mathematical expression? That's like patenting a statement of truth! I outright denounce any patenting of mathematical expressions, which includes, but is not limited to, encryption methods and software. You shouldn't be able to patent a philosophical expression. What if "I think therefore I am" had been patented by Descartes?
The way it's spent, sending money to the US Government is evil, so Google's "no evil" policy
requires them to avoid as much tax as possible.
If all this should have a reason, we would be the last to know.
i imagine that patent would have expired by now, so that's kinda a moot point :)
ashridah
The taxes they'd be avoiding
Nice point, well stated. The generic fact that they were avoiding taxes was probably what got the mod points. I did not feel like becoming a tax lawyer over a simple question and used education as an example (and yes, out of your income tax there is fed money that goes to education) but your examples are better. My point is not even slightly altered. They are avoiding taxes.
You guys *are* a bunch of looters.
Ed R.Zahurak
You know, oblivion keeps looking better every day.
How is keeping earnings evil? Everybody, yourself included, seems to think that any attempt by Google to make money is evil. You are wrong. To be evil is to do things like run ugly ads on your webmail and charge people money to remove them, or, worse, to accept payment for changes in PageRank. If they can find a legitimate and doable way to increase their profits, it's a good thing, because they have more money to fund stuff and their shareholders are happy. Pleasing your shareholders is not evil unless it is at the expense of your customers.
Tired of free iPod sigs? Subscribe to my blacklist
What is it with you Americans and this dogged obsession with "companies only exist to make money"?
Making money isn't the sole point of a company. Companies exist to fulfil their owners objectives as expressed by the mission statement. A side product of fulfilling those objectives is to make money, because an unprofitable company won't fulfil the objectives for very long.
Money is a means to an end, not the end in and of itself. Companies exist to make cars, build furniture, produce electricity, sell food, provide services, and literally 1000s of other purposes. Making money is part of that process, but it is not the actual objective.
When CEOs forget the company's objectives and pursue making money, that's when a company fails. Witness what's happening to HP; Carly tried to make more profit at the expense of the companies objectives. Thanks to her, HP might as well be dead. All the brilliance that once embodied "all things HP" has vanished. They are now a hollow shell of their former selves; little more than an expensive kind of Dell. Companies that focus on their objectives make money without even trying; look at Google.
For an even better example, look at Apple. In the mid-90s, during the absence of Steve, Apple lost sight of their objective; building the best personal computers. They started to produce some godawful crap like the PowerMac 4400. They wanted to make more money by producing a "cheap Mac" and selling to a larger audience. Combined with a whole lot of other boneheaded schemes to "make money quick", Apple almost went bankrupt. That's because the guys in charge never understood what Apple was all about.
Steve comes back and reinstates his vision of producing the best personal computers. Bam, Apple is back in the black and the industry darling again. Is Steve a brainiac? No. Is he just lucky? No. He simply knows to focus on the company's core objectives and that's why Steve's companies always succeed. Whether he's at Pixar or Apple, he pursues the objectives first, knowing full well that the money will come after.
Stop pursuing the money. Counterintuitively that's not how you make money! Make a great product, or provide a great service, and money will come naturally. That's how great companies and great people manage to succeed.
In the CEO biz, your total compensation is the way you get compared to other CEOs. It appears to be a kind of penis-measuring exercise (female CEOs aside) - after all, does a $20M CEO really work twice as hard as a $10M CEO? The usual justification for big CEO pay is "everyone else does it".
I hope the $1/year salary is their way of saying "we may be a public company, but we aren't going to play those games - we run Google because we want to solve hard problems and make money at it, not so we can wave our paychecks at Yahoo's management and laugh about how small they are."
To a Lisp hacker, XML is S-expressions in drag.
Tax AVOIDANCE is lawful and completely honorable.
.... The question arose whether the law which imposes such a tax upon them was constitutional. The opinion of the Attorney General thereon was requested by the Secretary of the Treasury. The Attorney General, in reply, gave an elaborate opinion advising the Secretary of the Treasury that no income tax could be lawfully assessed and collected upon the salaries of those officers who were in office at the time the statute imposing the tax was passed, holding on this subject the views expressed by Chief Justice Taney. His opinion is published in Volume XIII of the Opinioin of the Attorney General, at page 161. I am informed that it has been followed ever since without question by the department supervising or directing the collection of the public revenue..."
...A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls witin the same class as a tax upon that property, and is a direct tax, in the meaning of the Constitution....
...We have unanimously held in this case that, so far as this law operates on the receipts from municipal bonds , it cannot be sustained, because it is a tax on the powers of the States, and on their instrumentalities to borrow money, and consequently repugnant to the Constitution. ...it follows that, if the revenue from municipal bonds cannot be taxed because the source cannot be, the same rule applies to revenue from any other source not subject to the tax; and the lack of power to levy any but an apportioned tax on real and personal property equally exists as to the revenue therefrom.
...that personal property, contracts, obligations, and the like, have never been regarded by Congress as proper subjects of direct tax. The United States Constitution provides Congress the power to lay and collect taxes directly only as long as it is apportioned with regard to the census or enumeration."
Tax EVASION is illegal.
The payment of taxes is not a moral oblication, and "fair share" is not a legal term. It is used to intimidate and confuse people.
"The legal right of an individual to decrease or ALTOGETHER AVOID his/her taxes by means which the law permits cannot be doubted" Gregory v. Helvering, 293 U.S. 465
----------
Pollock v. Farmers Loan & Trust Co., 157 US 429 (1895)
This decision states that it is unconstitutional to impose the income tax on the interest and dividends, on the deposits of U.S citizens, in U.S. banks, because that would be a Direct Tax WITHOUT APPORTIONMENT, which is not authorized, and is, in fact, prohibited by the Constitution.
Excerpts from the decision:
"...Ordinarily, all taxes paid primarily by persons who can shift the burden upon someone else, or who are under no legal compulsion to pay them, are considered indirect taxes; but a tax upon property holders in respect of their estates, whether real or personal, or of the income yielded by such estates, and the payment of which cannot be avoided, are direct taxes..."
and;
"...Subsequently, in 1869,
and;
and;
Admitting that this act taxes the income of property irrespective of its source, still we cannot doubt that such a tax is necessarily a direct tax in the meaning of the Constitution.
In England, we do not understand that an income tax has ever been regarded as other than a diect tax. In Dowell's History of Taxation and Taxes in England, given, and an income tax is invariably classified as a direct tax..
and, even in dissent:
----------
Brushaber v. Union Pacific R.R. Co., 240 US 1 (1916)
The Brushaber decision determined that since the provisions of Article I of the Constitution were not repealed, they are still in full force and effect. Article I, Section 2, Clause 3, and Article I, Section 9, Clause 4, BOTH specify that Direct taxes MUST BE APPORTIONED (to the state governments for collection). The Court ruled that:
As your lawyer friend said, tax evasion is illegal. Tax avoidance, however, is not only legal it's encouraged -- hell, even the President wants you to pay as little tax as possible (if you're already rich). That's all these Google folks are doing. Fortunately, the law doesn't care if you're rich, even the poor can avoid taxes if they're careful. Back when I was in school and filed a 1040EZ I was able to cut my tax burden at least a little each year; now, with a house to kick me into itemized deductions, I milk it for all it's worth (e.g., don't throw anything away -- take it to Goodwill and let them throw it away; meanwhile, you claim the donation.
If all this should have a reason, we would be the last to know.