Frozen salaries and smaller bonuses at Google
Mar 25th 2009 3:30PM
Updated Dec 4th 2009 11:27AM
Here is something you don't read every day: Internet search giant Google (GOOG) announced that it froze salaries for its top executives in 2008 and cut their bonuses a bit. In the company's annual regulatory filing, Google stated that it kept salaries for executives (other than its CEO and cofounders) at $450,000, after an increase from $250,000 in 2007. In addition, Google gave no "equity awards" last year.
The company's new chief financial officer, Patrick Pichette, who was hired in June, did receive $1 million in a signing bonus and a rather large award of stock options. Google stated that the awards were to "recognize the immediate contribution he has made upon joining." The CFO was awarded 68,000 stock options (twice the amount of any other exec) at $318.92 per share.
Additionally, execs at the search firm exchanged their stock options under a plan announced earlier this year, which allowed employees to exchange existing options for new ones with a strike price of $308.57. This new plan should allow the employees to see a profit from their options, rather than a large loss compared to last year's stock price near $600.
Google's senior vice president of product management, Jonathan Rosenberg, received a $1.64 million bonus (down from $1.68 million), Senior Vice President of Engineering and Research Alan Eustace's bonus was $1.38 million (down from $1.68 million), and Senior Vice President of Sales and Business Development Omid Kordestani declined a bonus for 2008. Founders Larry Page and Sergey Brin were given symbolic total compensation of a dollar.
As for the stock, it is struggling mightily with resistance in the $350 region. The shares toppled this region in early February, but plummeted and are in the midst of a recovery. The question is, will Google be able to overcome various levels of overhead resistance and approach the $600 level, which is where the stock was in May 2008? It looks highly unlikely that Google will approach $600 any time soon.