In Praise of Google, Yahoo, Apple $1 Salary Club; Weak NY Times Execs Paid 2,160X As Much

Our note about how the Google (GOOG) founders and CEO paid themselves $1 each in 2007 prompted an angry mob to scream about how we were ignoring their vast option exercises and stockholdings and how this was just yet another example of greedy corporate pigs at the trough.

We couldn't disagree more.

We aren't claiming that Larry and Sergey are living like Mother Teresa (though we could certainly argue that, between the Google Foundation, et al, they have done more good for the world than she did). We aren't claiming that Larry and Sergey haven't gotten dynastically wealthy from their efforts. What we are saying is this:

• At any normal American corporation--The New York Times (NYT), for example--Google's senior executives would have paid themselves millions.
• The equity wealth that Google's founders enjoy has been created over the past 10 years and rewards them for founding and building the fastest-growing company in the world.
• The Google founders do not give themselves new option grants every year (most other American corporations would do this).
  
• The Google founders take 100% of the risk on their Google stockholdings.
• If you insist on treating the yearly change in value of Larry and Sergey's stockholdings as "compensation," then at least be consistent: In 2007, they lost -$8.5 billion each. This is likely the lowest "compensation" any American senior executive has received since the dawn of time. (Which is why stock holdings shouldn't be viewed as compensation.)

Put differently: A lot of America's chief executives are seriously rich (not as rich as Larry and Sergey, but when you get above a few hundred million, who cares). Despite this, these chief executives routinely shovel millions more out of their fellow shareholders' pockets each year simply to reward themselves for sitting in chief executive chairs.

For example, few would argue (we hope), that Janet Robinson (CEO) and Arthur Sulzberger (Chairman) of the New York Times have done more for their shareholders in the past year than Larry and Sergey have (and many would argue that they've helped run the company into the ground). But Janet and Pinch each paid themselves about $4 million last year--2,160-times as much as the Google guys.

Pinch, at least, is in the dynastically wealthy club: His family owns about $600 million-worth of New York Times stock (the value of which, incidentally, has done nothing but plummet on his watch). So why does Pinch need to take another $3.5 million out of the company? Why doesn't he just take $1?

Answer? Presumably because he feels he deserves another $3.5 million.

The Silicon Valley trend in which founder CEOs like Yahoo's Jerry Yang (YHOO), Apple's Steve Jobs (AAPL), and Larry and Sergey pay themselves $1 a year deserves to be admired. It would be nice if we started to see the same gesture from chief executives in the rest of corporate America.

See Also: Google's Outrageous 2007 Compensation Revealed

Google's $475k Bodyguards: Cheap!