When it comes to salaries and bonuses, Microsoft CEO Steve Ballmer’s $1.4 million payday may seem saintly compared to some others in the tech industry, but what about the top execs at Google and Apple? Those two firms actually posted better-than-the-rest earnings, while their top guys drew just $1 a piece, and nothing more. What’s wrong with this picture?
Now the tech industry is no AIG, not by a long shot. But it still seems stuck in the AIG-like mindset of rewarding poor performance with unseemly salaries, bonuses and perks. Just look at Sun’s Jonathan Schwartz, who raked in more than $9 million while presiding over a $70 million–or 15%–drop in profits.
The irony is clear when you compare Schwartz’s performance to what Apple and Google’s top execs delivered last year, in the midst of an historically challenging economy. In Q4 2008, Apple posted net income of $1.61 billion, or $1.78 per share, soundly beating the Thompson Reuters estimates of $1.27 billion and $1.39 per share. It also posted a healthy revenue increase, up from $9.6 billion last year to $10.17 billion in 2008, recession and all.
Similarly, Google posted a huge revenue increase for Q4 2008, up from $4.83 billion in Q4 2007 to $5.7 billion. And while its net income dropped, from $1.2 billion in Q4 2007 to just $382 million in Q4 2008, overall the company saw net income increase for the year, from $16.6 billion in 2007 to $21.8 billion in 2008, resulting in a net earnings per share rising from $13.29 to $13.31.
And Apple and Google’s top execs managed all that success on a $1/year salary.
While it’s true that Steve Jobs, Sergey Brin and Larry Page are by no means penniless–they all make Forbes’ 2009 list of top billionaires (Brin is No. 32, Page is No. 33, while Steve Jobs is a respectable No. 178), it does make you wonder. Could it be that Apple and Google’s execs tie their compensation to the actual health of their companies–they’re worth more when their company is worth more–while others like Schwartz rake in the dough, no matter how healthy–or anemic–the company they run becomes?
Perhaps Wall St. isn’t the only place with a warped compensation model.
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