Google's $475k Bodyguards: Cheap! (GOOG)

Peter Kafka | March 26, 2008 7:11 AM

After reviewing the Google (GOOG) proxy, Henry Blodget asks a reasonable question: How did Eric Schmidt spend $474,662 on security last year? One answer: By spending $58,093 less than he did the year before.

We don't know what Eric did to trim back his $532,755 bill from 2006, and we still don't know why the company spends a half-mil on his security -- but nothing on Larry and Sergey's. But we do know that by CEO standards, Eric's costs aren't beyond the pale. And by at least one measuring stick, Eric's security needs are minimal: Last year Oracle (ORCL) paid $1.7 million for Larry Ellison's security tab.

All this and more can be found in an excellent Forbes.com piece by our former colleague Lisa Lerer, who pored through SEC filings and talked to experts to get a sense of who spends what on corporate security, and what they spend it on. Key takeaway re: Eric, Larry, Sergey and Larry:

So is Ellison in more danger then Google's famous founders? Not necessarily, say security experts. Most likely, they argue, neither company is fully disclosing their security spending, but are instead folding some of them into expenses that aren't listed in SEC filings. "Those executives are most likely not revealing their high-end costs," says Bruce Alexander, president of executive protection consulting firm All Source Consulting Group. "I would guess that they are under-reporting."

Other good nuggets, some of which are unfortunately buried in an user-unfriendly slide show:

That $1.7 million didn't cover all of Larry's costs: He footed the bill himself to install security systems at his Malibu and Woodside estates.
Biggest costs? Labor. Run of the mill guards start at $60 an hour. Personal bodyguards start at $75k.
MasterCard spent $3,193 on CEO Robert Selander's security.
Harrah's Entertainment spent $277k on CEO Gary Loveman's security.
JP Morgan Chase spent $686 protecting Jamie Dimon

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11 Comments

Neek said:

Mar. 26, 7:46 AM

What's a few million here and there for security if you have private 767s and other excessive toys to also throw money at?

Tailor Made said:

Mar. 28, 9:20 AM

Mayor Bloomberg spends a ton of dough of his personal money on security...in addition to the police coverage. I have heard not as much as Giuliani, but Rudy has LOTS more enemies!

They should pay for secuirty. If these guys are so important to the succecss of the company, you want to protect it. They pay patent attonreys to protect IP. Why not big beefy guys to protect the boss? I wonder if JP Morgan Chase is asking for trouble, especially with the disgruntled Bears wandering the streets.

Bruce Alexander (URL) said:

Apr. 01, 3:25 AM

There's two issues here. One issue is whether they need security. In their case I would say yes by virtue of the fact that they are high net worth (and well known) individuals and as such attract a wide range of nutters, malcontents and genuinely bad people.

The second issue has to do with determining the real numbers behind the costs associated with security. As I mentioned to Lisa, that's much harder to do. For example, if a corporation provides a CEO with a driver, and that driver happens to be a security driver i.e. trained in evasive driving etc...what labor category is he carried in? Chauffeur or security specialist? Corporations can get very creative in figuring ways to reclassify labor categories to suit their purpose. One caveat: I'm not accusing anyone of doing that. I'm just saying its possible.

There's one more consideration as well which has to do with whether the Principals are considered as corporate assets. Determining whether anyone should be provided with company funded security or not has to do with the value the company places on them. In this case I would assume that Google would somehow be significantly altered should something happen to the Principals. In that case, the cost of security might be reasonable. That is a corporate/BOD decision.

Bruce Alexander
Editor
www.executive-protection-news.com

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