Google Exec Bonuses After Slashed Employee Holiday Bonuses

(MoneyWatch)  According to a regulatory filing, Google's top executives received million dollar bonuses for helping the company see at least some earnings growth in the financial black hole known as 2008. But let's not forget that holiday bonuses went out the window at the company not three months ago. From one point of view, at least, the savings more than paid for the executive perk.

The company's own 2008 10-K pegs headcount at the end of December at 20,222 employees. According to reports, the holiday bonus was generally about $1,000. Take out the cost of the Android-based phone that each received and the remainder that stayed in the corporate coffers was probably conservatively about $850. Why the change? Here's Google's own explanation:

Some of you will of course be wondering why we decided to change from a cash bonus to the Dream phone. Here are the reasons. First, we've never developed anything like the Android software before and this represented a unique opportunity to celebrate that achievement. Googlers globally have been asking for the Dream phone and we're looking forward to seeing all the different things that you do with them. This is a chance for us to once again dogfood a product and make it even better! Second, as we discussed in our email this week, the current economic crisis requires us to be more conservative about how we spend our money. We felt that giving the Dream phone would be a great holiday present - something we could all celebrate.

Multiple that individual dollar savings by the number of employees and you get a savings of $17,188,700 against net income for the year of roughly $4.23 billion, or 0.4 percent. In other words, Google felt that it had to cut what didn't even hit the level of a rounding error in its income to stay financially strong and to reflect lowered performance, and then handed out million dollar bonuses to four of its top executives:

Top Google Bonuses (in millions)

Employee	Position	2008 Bonus	2007 Bonus
Jonathan Rosenberg	senior VP, product management	$1.64	$1.68
Omid Kordestani	senior VP, global sales/business development	$1.38	$1.68
Alan Eustace	senior VP, engineering/research	$1.38	$1.68
Patrick Pichette	Current CFO	$1.24	N/A
George Reyes	Former CFO	$0.675	$1.68

Reyes retired last year and was replaced by Pinchette, who was named as the new CFO in June of last year (and reportedly received a $500,000 signing bonus). CEO Eric Schmidt and co-founders Larry Page and Sergey Brin traditionally don't take bonuses because they are already billionaires.

Add 'em up and the total just tops $6.3 million, or about 37 percent of the $17+ million that the rest of the company's staff had to give up. But at least Google employees can rest comfortably knowing that when their "dream phones" don't ring, it will be the execs thanking them for making the payments possible.

Money image via Freerangestock.com.