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Google Execs Happy With $1 Salaries
DarkClown writes "ZDNet is on the one hand reporting that Google execs will keep their $1 salaries again this year, and on the other hand is reporting that the executives cashed in more than $160 million worth of stock last month." From the stock article: "Since the search giant went public in August 2004, Brin has sold about 6.5 million shares at a market value of $1.68 billion. Page has sold about 5.8 million shares at a market value of $1.4 billion, according to calculations from Thomson Financial. Chief Executive Eric Schmidt, who was brought in to run the company before it went public, has sold more than 2.1 million shares, worth more than $502 million." They could be getting a multi-million dollar salary *and* the stock money. Good faith efforts go a long way in my book.
The news here is that the executives are selling their stock -- not normally considered a show of faith in the company. Brin and Page have each dumped over a billion dollars worth, and Schmidt another half-billion.
What I'm listening to now on Pandora...
I believe that Capital Gains Tax is higher than Income Tax
OK. What about Google's payroll tax liability?
Keeping the stock price high has killed more experimental software projects than anything else I know of....
SJW: a person who perceives an injustice, and while correcting it, commits a greater injustice.
Look at it this way: They've based their compensation entirely on how much the world values Google.
Even if you make the tax-dodge argument, it still only works if their company's stock is worth enough to make such tax dodge worth considering.
Nothing about their salary is locked in. Either they continue to make decisions that keep the stock price high and their pockets full of phat cash, or they don't get paid.
Any sufficiently well-organized community is indistinguishable from Government.
Anti-evolution? There is no anti-evolution; it's a nonsensical phrase. Try learning some terms before you spout nonsense. Here's a hint: Darwin never said "survival of the fittest" ever in his work. Maybe if you opened a book you'd be able to realize what evolution is. I might be giving you too much credit, though. Go back to watching Sesame Street.
According to yahoo finance:
http://finance.yahoo.com/q/pr?s=GOOG
Eric Schmidt gets $82,000 and Sergey Brin and Larry Page get $45,000.
No Sigs!
Wrong.
Sure they have some interest, in the same way a millionaire poker player has an interest in a $10,000 hand. They can afford to act imprudently, and if it doesn't pan out they'll never notice the difference. Once your bank account has 10 digits, you're pretty much immune to anything short of complete and utter economic collapse. Legitimate worries of such an individual would be that the dollar become less valuable than the material it's printed on, or that the not-so-small island they just bought is precariously close to collapsing into the sea.
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No, stocks are not paper money. Stocks represent a "share" of ownership the companies assets (and a share of the company profits as dividends) - the assets could be something tangible, like machinary, or something intagible, like "marketshare" or "name recognition". People pay money for shares because they percieve they are getting something of value.
But even assuming the value of the stock is "inflated", this has absolutly nothing to do with monetary inflation. They use the same word, "inflated", but they are completly different things. It might be bad to "inflate" the value of stock (meaning, decieving people to the real value of what you are selling), in the same way it would be bad to sell cut glass as diamonds, but this is not what you are talking about.
The "inflation" you are talking about in your first post (cost of goods and services rising, most likely faster than wages) isn't the same thing as a stock being inflated (people thinking a company is more valuable than it really is). It is like saying that a "sweet" 72 Camero is going to raise my blood sugar! We use the word "inflation" to describe different things. "Inflation" simply means "bloated".
The things that cause monetary inflation as you mention it in your post: an increase in the money supply (or lowering of interest rates, which in the U.S. is the same as increasing the money supply), or a decrease in the goods and services in the market. Overpriced stocks don't increase or decrease the money supply at all, they simply reallocate money that is already in the economy. (And, if you are a Marxist: They are reallocating money away from one set of Capitalists to another set of Capitalists, so it wouldn't really have much effect on the workers from a strictly theoretical Marxist perspective).
wow, without the stock market companies would never be able to grow large enough. They constantly need an influx of capital to grow. If you take the stock market away, it becomes harder for them to find investors. It would be pretty dumb to just have the "stock market dissappear" as that would destory alot of economic growth.
To these kinds of successful people, money is basically a scorecard. The bigger the number the better. Once they hit their first million, they say "okay, that was fun, now 10 million".. and so on.
In other words, it's not about the money, it's the success that the money represents.
PS: don't sit in your cube dreaming about millions, go and make it happen!
It would not be surprising that they would quit in a few years, but right now working at Google would have to be one of the most interesting jobs in the world. And this is for an outsider, can you imagine if you'd created the company yourself?
If I was an employee of Google and my stock options were worth over a couple of million, I would dump and run.
Perhaps, and as an EMPLOYEE of the company that might be something you would want to do. Keep in mind this article is concerning the execs. I don't know about Eric Schmidt, but Larry Page and Sergey Brin founded a company based on their Phd work. They don't have to worry about money, now they can continue with the research that they might have went on doing if they hadn't decided to start Google.
Kind of makes you wonder about what kind of people stick around when they are already super-rich. Bill Gates, Steve Ballmer, Steve Jobs, etc. Why do they continue to work? Is it because they have nothing better to do?
Ummm... it's called greed. There is never enough for some of these people. I wouldn't expect Larry or Sergey to quit yet, Google is still a young company. OTOH, I agree with you, what does Gates have to prove? Some guys do get rich and get out. Look at Paul Allen and Steve Wozniak. Allen is out buying sports teams and building toy rockets. Woz went into teaching. I think everyone has their reasons for doing what they do, but keep in mind not everyone who is successful is unsatisfied with their achievements.
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Oh, btw:
There's a lot of Kool-Aid being consumed around here.
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This isn't exactly true. Before the '02 tax cuts, stock sales were still taxed at a different rate from ordinary income: 20% for long-term and ordinary for short term ( year) (unless you're in the 10% or 15% tax bracket). After '02 tax cuts: 15% for long-term and ordinary for less than a year (unless you're in the 10% or 15% tax bracket).
Thus, the '02 tax law basically reduced the tax rate on capital gains by 5% since ordinary income taxes were also reduced.
Yes, but your employer must pony up a matching 6.2% of your salary, making a total FICA contribution of around $12k at the SS limit. And in the case of self-employed individuals, the full 12.4% comes out of the worker's pocket. Even for the non-self-employed I would argue that without their employer having to pay that half of the FICA taxes, some portion of the savings would be passed on to employees as higher wages. This may have been where the OP got the $12k number, so perhaps you shouldn't be so quick to judge his math skills.
Also, before you go spouting off about the the "typical liberal," perhaps you should check your own post. The upper limit on SS-taxable income is $94,200 for 2006, not $96,400 as you assert.
So there, that's where people learn "stuff like [that]"...with basic research on the subject. You know, the way one learns just about anything.
Your attitude towards your mutual funds genuinely confuses me. If you dislike them so much, why do you bother putting any money in? If you don't see any real growth, why do you carry on the investment? On the one hand, you're upset that your money hasn't grown. You "REALLY don't want to have to think about this shit. Someone should do it for [you]." So you're saying that someone should take care of and grow your money for you without you having to put in any effort. On the other hand you declare that you're 'old fashioned' and insist on working for your money, and that people who gain money without working (at something you define as legitimate work) for it are somehow in the wrong. So which is it? The good ol' Protestant Work Ethic, or "Someone should make my money more money for me because doing it myself is hard and I don't get it?"
Not to mention that as a man who works in a technical field, you should understand the equally 'old fashioned' idea of RTFM. I hope you've never complained about an ignorant user, or someone who wanted you to do every simple little computing task for them. Your attitude towards managing your own assets seems to be a lot like theirs towards their computers...only they just want free time and help, you want free money!
Having worked with brokers in the past and spoken with them at length to attempt to get an idea of how they do their job, I can assure you that investing is not "a pool cue to move billiard balls around a table". There's a lot of research, planning, analysis and careful thought put into trying to find the wisest strategies for investing. Is it a guess in the end? Well sure, nobody knows the future. But blasting an entire field simply because you couldn't bother taking the 5 minutes it would take to at least get a vague idea of what it involves? That's not "insulting" so much as it is offensively stupid.
If you want to talk about what of value is created by the market...well that's a tough call. There's a lot of room for discussion on that point, and if you want to take the stance of "no" there's a lot of good arguments you could make. However, think about all the brokers out there putting in 9-12 hour days to try their best to grow the mutual funds that millions of Americans (I'm sure other nations as well, though I'm not as familiar with how their markets work) have their savings and retirement funds invested in. Maybe it's a super-idealistic idea, but if I could go home knowing I'd given a few million people $5 each more towards retirement with my day's work, I think I'd feel like I accomplished something tangible.
Then we go back to a lengthy discussion about the "evils" of these large corporations. So let's do these one by one.
The Sony Mavicam purchase - First you complain about how the manufacturer's warranty is "unacceptable"....yet you obviously accept it because you're buying their product. An angst-ridden teenager working a shitty job (and earning comission, most likely, for each warranty he sells) looks at you funny for not going for it. But in the end, you gave him your money.
DirecTV - You liked your TV rates, but t
True, but this could lead to the conclusion that it doesn't matter which mutual fund you put your money in out of the vast number of funds with the given investment direction you have decided to go for.
That, however, would be incorrect, becuase while the return of the instruments in the fund are likely to have the same expected value for every fund, there is a fee component that is pretty huge. A typical fund charges around 2% of total assets every year, no matter how the fund performs. For the GP, that is $200/year or $1K over five years. He has paid $1K+ to brokers and other people and has received nothing for himself. He should be upset!
Fortunately, there are alternatives. The simplest one is index funds, where the total fee is much lower, typically 0.5% of assets per year or less. The GP would then have only paid $250 over five years, and he'd be $750 richer.
The main problem with the financial markets (or, indeed, with any market) is that people expect something for nothing. They expect great deals without having to spend anything on researc. When customers in our particular markets (typically, computers, for the average slashdot user, I stereotypically guess) want that, we berate them for their tremendous stupidity. We start web sites where we collect quotes from the most stupid ones. We hate them, we ridicule them, we... Well, you get the picture.
Yet this is *EXACTLY* what the GP is doing. He sounds like a smart guy, so he really should have figured it out. But he obviously hasn't. Small surprise then, that millions of people pour money into expensive items (be they mutual funds, holiday trips, cars or whatever).
As a final suggestion to everyone here: put *all* the money you have in mutual funds in the cheapest index funds you can find. Compare the difference on your bank statements five years from now. Send me 10% of what you gained, and I'll never have to work again.
Not quite, becaue $200 a year for 5 years is *not* the same as having $1000 invested for 5 years. (it's closer to half) But you're rigth: he should be upset -- and it seems that he is, only he doesn't really seem to know why.
The main problem with the financial markets (or, indeed, with any market) is that people expect something for nothing. They expect great deals without having to spend anything on researc.
Or great deals *with* spending time/money on research. That's the hint. Sure, *IF* you are more clever than the average person in the financial markets, then you could, on average, do better than the index. Thing is, 90% of all analysts seem to think they are more clever than average, and that's simply a mathemathical impossibility. And if *everyone* did more research and/or got more clever, you'd have gained nothing since, as stated, it's a zero-sum game.
As a final suggestion to everyone here: put *all* the money you have in mutual funds in the cheapest index funds you can find.
Diversification can still be good. It doesn't change the expected payoff. But it can change the risk (in positive and negative sense) a lot. It's like the choise between setting $1000 on a die-roll to win $5000, which has an expected payout of $833, but which will yield $0 or $5000 in practice, and setting $1 on a die-roll to win $5 -- 1000 times, which *ALSO* has an expected payoff of $833, but which will almost certainly yield between $800 and $860. The latter has the same expected payoff, but less risk.
I do this. My funds are to be *different* from eachothers, and have low fees. These are my only criteria. It doesn't interest me in the sligthest what algorithm or person they use for selecting their stock. Indeed, if I had enough money to be able to diversify enough by myself, I'd quit the entire fund-thing and invest in individual stocks, which have the benefit of 0% fees. But the drawback that investments smaller than about $2000 in a single stock are impractical, so you need like $50000 invested to be able to diversify enough to get close to the index.