> Not to nitpick, but how do you spend $474,662 on security?
Seems damn easy to me. How much does some security technology + bodyguards cost? I'm sure Larry/Sergey have at least as much security, but apparently they're covering the cost. I recall Ellison's security was into the millions.
It is outrageos!!! It is just another way to skip paying taxes.
If you have a salary, you have to pay 12% on payroll taxes (for the first 102k), plus 9.25% CA taxes, and probably 32% personal income taxes.
What they are getting, is security, housing, travel expenses to private islands, parties, etc.... all of those end up as "businness expenses", which obviously reduce taxes.
They're paying plenty of tax whenever they cash out.
For example:
"After cashing in more than 9 million shares valued at $3.7 billion last year, 16 Google insiders will owe the Golden State as much as $380 million in taxes -- enough to cover the salaries of more than 3,000 state workers."
http://www.boston.com/business/taxes/articles/2007/01/06/goo...
True, but there is a huge difference. They are paying taxes as for "capital gains", which means they get taxed only 15%, instead of a normal income ( which is over 30%). This is the same thing that Buffet was saying that the rich people are getting taxed a lot less (percentage wise) then their secretaries.
Interesting. If I were them I'd move to a state that didn't have a state capital gains tax before cashing out. Then again, I guess when you cash out 3.7 billion dollars in a single year, 380 million seems like pocket change.
This is a non-story. It might be a slightly interesting point that the top Google executives don't take out salary, but stories like these are never anything but PR stunts. Anyone with half a chimpanzee's brain understands that these numbers don't mean anything. All 3 of them could take a salary of 500 million dollars, and the shareholders would hardly notice. I suppose the goal with stunts like these is to show solidarity with the workers who earn much less, but this rings hollow when each of them has enough stock to buy the family of every employee. I'm not saying it's a problem that these guys have great fortunes, but it seems a bit cowardly for them to pretend that they are actually quite frugal. They are not, by a long shot.
The only thing worth noting is that they only use their own shares for large expenses. But the practical implications of this are miniscule. And in the case of the CEO, these shares were after all issued at a time.
The top execs taking no salary is definitely a signal, but it's not solidarity with the other employees. Taking your pay all in equity means you're pegging your future wealth entirely on the performance of the company. Having executives aligned so heavily on real-world success (as opposed to just maximizing their yearly bonus) is pretty much all a stockholder--employees included--can ask for.
> I'm not saying it's a problem that these guys have great fortunes, but it seems a bit cowardly for them to pretend that they are actually quite frugal.
I don't know where you got the idea that they are "pretending to be frugal", or how that is somehow cowardly. They just take most of their compensation in the form of stock options/grants. Big deal.
If anything, this just highlights how fucked up our tax system is. Modern executives receive all of their income in the form of stock options so they'll be taxed at the capital gains rate, ensuring that their marginal tax rate is half that of the bottom of the line programmer in their organization.
Seems damn easy to me. How much does some security technology + bodyguards cost? I'm sure Larry/Sergey have at least as much security, but apparently they're covering the cost. I recall Ellison's security was into the millions.