Google Inc Chief Executive Eric Schmidt and co-founders Larry Page and Sergey Brin maintained their traditional salaries of $1 last year even as the value of their combined stakes in the Internet search leader plunged by nearly $26 billion.
The paltry paychecks, disclosed Tuesday in a regulatory filing, come as no surprise because Schmidt, Page and Brin have insisted on their annual salaries remaining at $1 since Google went public in 2004.
The trio also don't get any bonuses or the stock awards that most of Google's other 20,000 employees receive.
That's because Page and Brin, who founded the company in 1998, already are Google's largest stockholders with about 29 million shares apiece.
Page, 36, and Brin, 35, made Schmidt, 53, a major shareholder when they hired him as CEO in 2001.
Schmidt received perquisites valued at $508,763 last year, mostly to cover personal security bills totaling $402,562. Google also paid a total of $106,201 to fly his family and friends on airplanes chartered by the Mountain View, Calif.-based company.
Including his perks, Schmidt's 2008 compensation package edged up 6 percent from 2007 when his package totaled $478,662.
The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.
Limiting their salaries to $1 didn't seem like a big sacrifice for Schmidt, Brin and Page until 2008. That's because they became multibillionaires as their holdings in Google soared eight-fold between the time of the company's initial public offering in August 2004 and the end of 2007.
Although all three men remain among the world's wealthiest people, they suffered a major setback last year. Combined, their fortunes plunged by a combined $25.8 billion, or nearly 56 percent, in 2008, as investors began to fret that Google would be hurt by the faltering economy.
Google held up better than many people feared as its revenue rose 38 percent to $21.8 billion, but the company's stock price still plummeted from $691.48 at the close of 2007 to $307.65 at the end of last year.
Google shares have rallied along with the overall market recently, closing Thursday at $347.17.
The steep decline in Google's market value prompted the company to recently decrease its employees' cost to exercise a total of 7.64 million stock options. The re-pricing gives the 15,642 who participated in the program a better chance to strike it rich in future years.
Signaling its intent to hand out even more stock options as it expands, Google wants to add another 8.5 million shares to the pool of available awards. The request will be voted on at the company's annual meeting May 7.
Other Silicon Valley billionaires, such as Yahoo Inc. co-founder Jerry Yang and Apple Inc. co-founder Steve Jobs, also have limited their salaries to $1 while serving as CEO.
But mogul CEOs haven't been as egalitarian. For instance, Oracle Corp. CEO Larry Ellison pocketed a $1 million salary in the company's last fiscal year and received an additional 7 million stock options valued at $71.4 million when they were granted.
Agencies
Wednesday, March 25, 2009
Tuesday, March 24, 2009
Satyam Continues To Lose Major Customers
Satyam Computer Services is on a 'losing spree', having so far lost outsourcing contracts from large customers to rivals such as IBM Corp., TCS, Infosys Technologies and Wipro Ltd. Now, a US property and casualty insurer is seeking to replace its outsourcing contract with Satyam.
US based Selective Insurance Co., which has reportedly outsourced about a quarter of its IT staffing requirements to Satyam, is said to be looking for alternate arrangement in light of Satyam latest woes.
In papers filed with the Securities and Exchange Commission (SEC) last month, Selective is quoted to have said: "We believe we would be able to manage an efficient transition to a new vendor and not experience a significant negative impact to our operations in the event that we no longer retain Satyam in their current capacity due to the financial issues they are currently experiencing."
Satyam chairman Ramalinga Raju on January 7 admitted falsifying the company's cash position by as much as $1 billion while overstating quarterly earnings and revenue by up to 28%. Sources indicate that Satyam may also have faked employee numbers and other data.
Since then increasingly nervous Satyam customers are looking for alternatives in case the scandal-scarred outsourcer is unable to restore internal stability or find a buyer with pockets deep enough to see the Indian company through its current crisis.
Many customers have either completely exited, or are in the process of moving their outsourcing contracts from Satyam to rival tech firms such as IBM, TCS, Wipro, Infosys and Accenture.
Some of the customers, including Telstra, Emerson, Nissan, State Farm Insurance, Applied Materials, Kansas State Bank, and Sony, have either moved out their projects completely, or are in the process of migrating current Satyam work to other outsourcing vendors.
iGATE, which was keenly bidding for the 51% stake of Satyam, has now pulled out from the bidding process mainly due to the loss of Satyam customers. Phaneesh Murthy, CEO of iGATE Corp, said, "We know that there are customer exits happening at Satyam. While the value erosion and the extent of liabilities were a concern, it was the totality of concerns that influenced our decision."
However, some large Indian players like BK Modi's Spice Telecom, Tech Mahindra, and L&T are among the companies to move to the second stage of bidding for the fraud-ridden IT outsourcer.
CXOtoday
US based Selective Insurance Co., which has reportedly outsourced about a quarter of its IT staffing requirements to Satyam, is said to be looking for alternate arrangement in light of Satyam latest woes.
In papers filed with the Securities and Exchange Commission (SEC) last month, Selective is quoted to have said: "We believe we would be able to manage an efficient transition to a new vendor and not experience a significant negative impact to our operations in the event that we no longer retain Satyam in their current capacity due to the financial issues they are currently experiencing."
Satyam chairman Ramalinga Raju on January 7 admitted falsifying the company's cash position by as much as $1 billion while overstating quarterly earnings and revenue by up to 28%. Sources indicate that Satyam may also have faked employee numbers and other data.
Since then increasingly nervous Satyam customers are looking for alternatives in case the scandal-scarred outsourcer is unable to restore internal stability or find a buyer with pockets deep enough to see the Indian company through its current crisis.
Many customers have either completely exited, or are in the process of moving their outsourcing contracts from Satyam to rival tech firms such as IBM, TCS, Wipro, Infosys and Accenture.
Some of the customers, including Telstra, Emerson, Nissan, State Farm Insurance, Applied Materials, Kansas State Bank, and Sony, have either moved out their projects completely, or are in the process of migrating current Satyam work to other outsourcing vendors.
iGATE, which was keenly bidding for the 51% stake of Satyam, has now pulled out from the bidding process mainly due to the loss of Satyam customers. Phaneesh Murthy, CEO of iGATE Corp, said, "We know that there are customer exits happening at Satyam. While the value erosion and the extent of liabilities were a concern, it was the totality of concerns that influenced our decision."
However, some large Indian players like BK Modi's Spice Telecom, Tech Mahindra, and L&T are among the companies to move to the second stage of bidding for the fraud-ridden IT outsourcer.
CXOtoday
Kronos Debuts Workforce Central 6.1 in India
Kronos India has announced the availability of version 6.1 of its Workforce Central suite in India.
Workforce Central 6.1 provides executives with greater visibility into their global workforce, enabling them to identify critical business issues. The new version includes hundreds of features and new enhancements.
Talking to CXOtoday, James Thomas, country manager, India, said, "At Kronos we've developed a unique perspective on what it takes for an organization to successfully deploy a workforce management solution. Our belief is that integrated workforce management in real time doesn't have to be so hard, and that organizations shouldn't have to trade functionality for simplicity. Workforce Central strikes an ideal balance of deep functionality combined with a range of ease-of-deployment, ease-of-use and cost-of-ownership enhancements."
Kronos helps organizations control labor costs, minimize compliance risk, and improve workforce productivity all at the same time centrally in real time, Thomas said. "These are important business issues in normal times, and even more during tough economic times."
Workforce Central 6.1 supports India's Factories Act and Shops and Establishment Act, whereby manufacturers and services organizations are required to maintain time-related registers and statutory reports for employees.
To help organizations comply with these regulations and minimize compliance risk, Workforce Central 6.1 provides legislated working time reports, as well as new features to monitor overtime and time-based pay codes on a daily and hourly basis.
The new enhancements in Workforce Central 6.1 includes: Enhanced ERP integration; Low total cost of ownership (TCO); Complete automation; Global ready; Machine resource tracking and Advanced scheduling.
CXOtoday
Workforce Central 6.1 provides executives with greater visibility into their global workforce, enabling them to identify critical business issues. The new version includes hundreds of features and new enhancements.
Talking to CXOtoday, James Thomas, country manager, India, said, "At Kronos we've developed a unique perspective on what it takes for an organization to successfully deploy a workforce management solution. Our belief is that integrated workforce management in real time doesn't have to be so hard, and that organizations shouldn't have to trade functionality for simplicity. Workforce Central strikes an ideal balance of deep functionality combined with a range of ease-of-deployment, ease-of-use and cost-of-ownership enhancements."
Kronos helps organizations control labor costs, minimize compliance risk, and improve workforce productivity all at the same time centrally in real time, Thomas said. "These are important business issues in normal times, and even more during tough economic times."
Workforce Central 6.1 supports India's Factories Act and Shops and Establishment Act, whereby manufacturers and services organizations are required to maintain time-related registers and statutory reports for employees.
To help organizations comply with these regulations and minimize compliance risk, Workforce Central 6.1 provides legislated working time reports, as well as new features to monitor overtime and time-based pay codes on a daily and hourly basis.
The new enhancements in Workforce Central 6.1 includes: Enhanced ERP integration; Low total cost of ownership (TCO); Complete automation; Global ready; Machine resource tracking and Advanced scheduling.
CXOtoday
iGATE Pulls Out of Satyam Bidding Process
Fremont-based iGATE has decided not to go ahead with the bidding process for acquiring 51% stake in India's scam-tainted Satyam Computer Services (SATYAMCOMP), based on further analysis.
Talking to CXOtoday, Phaneesh Murthy, CEO of iGATE, said, "While there is no one particular reason, it's the totality of concerns like sliding revenues, unknown margins and large liabilities that made us pull out of the race."
Murthy said, "We know that there are customer exits happening at Satyam. While the value erosion and the extent of liabilities were a concern, it was the totality of concerns that influenced our decision."
The company had earlier announced its participation in the bidding process last week, competing against some of the large Indian investors.
However, our PE fund partner had no role or influence in our decision to pull out. We had prepared our own model of financials and in that model it was difficult to get a reasonable return for any investor, said Murthy.
Satyam has been struggling for survival since January 7, when its founder and former chairman, B. Ramalinga Raju, confessed to filling the company's balance sheets with $1 billion in fictitious assets and nonexistent cash.
March 20 was the deadline set by the government-appointed Satyam Board for bidders to respond to the request for proposals the IT firm had sent out on March 13.
Sources indicate that potential bidders are concerned about the lack of clarity about the financial status of Satyam, as well as the implications of the class action suits and other legal troubles that the company is facing.
CXOtoday
Talking to CXOtoday, Phaneesh Murthy, CEO of iGATE, said, "While there is no one particular reason, it's the totality of concerns like sliding revenues, unknown margins and large liabilities that made us pull out of the race."
Murthy said, "We know that there are customer exits happening at Satyam. While the value erosion and the extent of liabilities were a concern, it was the totality of concerns that influenced our decision."
The company had earlier announced its participation in the bidding process last week, competing against some of the large Indian investors.
However, our PE fund partner had no role or influence in our decision to pull out. We had prepared our own model of financials and in that model it was difficult to get a reasonable return for any investor, said Murthy.
Satyam has been struggling for survival since January 7, when its founder and former chairman, B. Ramalinga Raju, confessed to filling the company's balance sheets with $1 billion in fictitious assets and nonexistent cash.
March 20 was the deadline set by the government-appointed Satyam Board for bidders to respond to the request for proposals the IT firm had sent out on March 13.
Sources indicate that potential bidders are concerned about the lack of clarity about the financial status of Satyam, as well as the implications of the class action suits and other legal troubles that the company is facing.
CXOtoday
Monday, March 23, 2009
Sony freezes salaries, compensations, hikes of employees'
Sony Corp has decided to freeze its workers' salaries for the year starting in April to improve profitability, the financial daily Nikkei said in its Thursday edition.
The paper said workers' bonuses will also be lowered to four months' pay from six months, and annual compensation for managers will be dropped 10 to 20 per cent through wage cuts and 35 to 40 per cent bonus reductions.
"Executives will also be slugged with huge cuts to bonuses and salaries," Nikkei said. Due to the global economic downtown and the strength of the yen, Sony is expected to report a group operating loss of 260 billion yen ($2.65 billion) for the year ending March 31, the paper said.
Agencies
The paper said workers' bonuses will also be lowered to four months' pay from six months, and annual compensation for managers will be dropped 10 to 20 per cent through wage cuts and 35 to 40 per cent bonus reductions.
"Executives will also be slugged with huge cuts to bonuses and salaries," Nikkei said. Due to the global economic downtown and the strength of the yen, Sony is expected to report a group operating loss of 260 billion yen ($2.65 billion) for the year ending March 31, the paper said.
Agencies
Has HP cut salaries of EDS employees?
Hewlett-Packard Co said it will cut the base salaries of some employees in its EDS business by 10 per cent for the month of April.
The temporary salary reduction is in addition to a company-wide pay cut HP instituted last month.
The salary cut impacts only EDS workers based in the United States and Puerto Rico and will not affect those making less than $40,000.
A company spokeswoman said in a statement via email that the move is a "temporary cost action to keep the organization strong while increasing financial flexibility."
HP bought EDS last year for $13.2 billion. Last month, after the company cut its full-year outlook and posted weaker-than expected quarterly revenue, HP moved to reduce base pay for all its employees, including a 5 per cent cut for most salaried workers.
HP Chief Executive Mark Hurd has stressed the company's commitment to lowering costs. HP is the world's largest maker of personal computers, and second-largest technology services company.
Agencies
The temporary salary reduction is in addition to a company-wide pay cut HP instituted last month.
The salary cut impacts only EDS workers based in the United States and Puerto Rico and will not affect those making less than $40,000.
A company spokeswoman said in a statement via email that the move is a "temporary cost action to keep the organization strong while increasing financial flexibility."
HP bought EDS last year for $13.2 billion. Last month, after the company cut its full-year outlook and posted weaker-than expected quarterly revenue, HP moved to reduce base pay for all its employees, including a 5 per cent cut for most salaried workers.
HP Chief Executive Mark Hurd has stressed the company's commitment to lowering costs. HP is the world's largest maker of personal computers, and second-largest technology services company.
Agencies
Sun Microsystems seen as first salvo in tech battle
Quite a few technology companies could lose their independence in the next year or so as the battle among industry giants IBM, Hewlett-Packard Co and Cisco Systems Inc heats up.
The weak economy notwithstanding, Cisco this week announced its entry into the computer server market now dominated by HP and International Business Machines Corp.
And IBM is in talks to buy high-end server maker Sun Microsystems Inc, sources with knowledge of the matter said on Wednesday.
As these companies deliberately step on each other's toes to search for growth, analysts and bankers say the deals market is warming up with cash-rich tech powerhouses hunting for niche technologies at bargain prices.
Virtualization software maker Citrix Systems Inc, storage company NetApp Inc, and network equipment makers Brocade Communications Systems Inc and Juniper Networks Inc are among those that could catch the eye of tech bellwethers looking to compete in new markets, analysts said on Wednesday.
"If I own 60 percent of a market, maybe I can get to 65 percent, but really, I need a new market," said Peter Bell, a venture capitalist at Highland Capital Partners, of the dilemma that faces maturing tech companies.
Morningstar Inc analyst Rick Hanna agreed: "They're all in the war for increasing the total addressable market."
The biggest tech companies have been trying to become one-stop storefronts for business customers for years, offering software, services and hardware for everything from the data center to the desktop as their own core businesses slow down.
The larger impetus behind any deal making is the advent of two hot trends: virtualization and "cloud computing."
Virtualization software lets businesses reduce space and energy usage in their data centers, while cloud computing technologies let them access applications over the Web. Data centers house computing equipment used by companies.
The "arms race" among companies like Cisco, HP and IBM did not happen overnight, Jeff Bistrong, a technology banker at Harris Williams & Co, an investment banking firm said on Thursday.
HP's purchase of technology outsourcer Electronic Data Systems last year already pit it directly against IBM.
"What's different is we're in a major recession, enterprise values have been significantly diminished," Bistrong said.
Companies held on to their cash in the past few months as they assessed the damage to their business from the recession, said Howard Lanser, a mergers and acquisition analyst at Robert W. Baird said on Wednesday.
But now, the price tags of targets are cheap enough to justify longer-term strategic goals and tech companies that have cash will make the "buy decision," Lanser said.
Cisco has $29.4 billion in cash, IBM has $12.7 billion and HP $11.2 billion, according to recent financial statements.
Bargain Hunting
Companies like Microsoft Corp, EMC Corp and Dell Inc also may seek to own choice pieces of the "cloud," as computing becomes more Web-based.
Microsoft has been bullish on cloud computing, but its grip on data center operating systems could be threatened by the move toward remote data centers, forcing the software maker to search for acquisitions, Morningstar's Hanna said.
Microsoft CEO Steve Ballmer said at a conference on Thursday the company plans to buy up to 20 companies this year, with deal sizes ranging from $10 million to $500 million.
EMC, the world's largest maker of corporate storage, may also look for deals to improve its services offering, analysts said.
EMC itself could get acquired by Cisco; the two companies talked about a deal last year, a person familiar with the matter told Reuters in February.
Analysts said the timing of IBM's move to buy Sun illustrates the partly strategic, partly opportunistic thinking of companies that could drive dealmaking in the next year.
"Cisco has clearly laid out all its cards on the market," said Hanna, referring to the networking giant's plans to sell servers for data centers.
Hanna said he reads the talks as "a preemptive move by IBM to take Sun off the table," to keep rivals like Cisco from getting their hands on a bigger piece of the data center pie.
IBM may be betting that it can do a better job than Sun in taking advantage of these emerging technologies, and use it to compete better against Cisco and HP.
The Wall Street Journal reported that IBM has offered between $10-$11 a share for Sun, the Java software maker, or a total value of $6.5 billion, net of cash.
That's the kind of deal size big companies will be comfortable with as they look to plug holes in their software, services and hardware offerings for enterprises, said Highland Capital's Bell.
Bell, a former chief executive of information storage company StorageNetworks, said small acquisitions were unlikely to satisfy the appetites of large companies.
Rather, companies with market values of between $1 billion and $10 billion would be the focus of acquisitions, he said.
The thinking is more like, "If I can find a larger player, maybe I can accelerate and leapfrog, maybe 12 to 24 months, on my competitor," he added.
Agencies
The weak economy notwithstanding, Cisco this week announced its entry into the computer server market now dominated by HP and International Business Machines Corp.
And IBM is in talks to buy high-end server maker Sun Microsystems Inc, sources with knowledge of the matter said on Wednesday.
As these companies deliberately step on each other's toes to search for growth, analysts and bankers say the deals market is warming up with cash-rich tech powerhouses hunting for niche technologies at bargain prices.
Virtualization software maker Citrix Systems Inc, storage company NetApp Inc, and network equipment makers Brocade Communications Systems Inc and Juniper Networks Inc are among those that could catch the eye of tech bellwethers looking to compete in new markets, analysts said on Wednesday.
"If I own 60 percent of a market, maybe I can get to 65 percent, but really, I need a new market," said Peter Bell, a venture capitalist at Highland Capital Partners, of the dilemma that faces maturing tech companies.
Morningstar Inc analyst Rick Hanna agreed: "They're all in the war for increasing the total addressable market."
The biggest tech companies have been trying to become one-stop storefronts for business customers for years, offering software, services and hardware for everything from the data center to the desktop as their own core businesses slow down.
The larger impetus behind any deal making is the advent of two hot trends: virtualization and "cloud computing."
Virtualization software lets businesses reduce space and energy usage in their data centers, while cloud computing technologies let them access applications over the Web. Data centers house computing equipment used by companies.
The "arms race" among companies like Cisco, HP and IBM did not happen overnight, Jeff Bistrong, a technology banker at Harris Williams & Co, an investment banking firm said on Thursday.
HP's purchase of technology outsourcer Electronic Data Systems last year already pit it directly against IBM.
"What's different is we're in a major recession, enterprise values have been significantly diminished," Bistrong said.
Companies held on to their cash in the past few months as they assessed the damage to their business from the recession, said Howard Lanser, a mergers and acquisition analyst at Robert W. Baird said on Wednesday.
But now, the price tags of targets are cheap enough to justify longer-term strategic goals and tech companies that have cash will make the "buy decision," Lanser said.
Cisco has $29.4 billion in cash, IBM has $12.7 billion and HP $11.2 billion, according to recent financial statements.
Bargain Hunting
Companies like Microsoft Corp, EMC Corp and Dell Inc also may seek to own choice pieces of the "cloud," as computing becomes more Web-based.
Microsoft has been bullish on cloud computing, but its grip on data center operating systems could be threatened by the move toward remote data centers, forcing the software maker to search for acquisitions, Morningstar's Hanna said.
Microsoft CEO Steve Ballmer said at a conference on Thursday the company plans to buy up to 20 companies this year, with deal sizes ranging from $10 million to $500 million.
EMC, the world's largest maker of corporate storage, may also look for deals to improve its services offering, analysts said.
EMC itself could get acquired by Cisco; the two companies talked about a deal last year, a person familiar with the matter told Reuters in February.
Analysts said the timing of IBM's move to buy Sun illustrates the partly strategic, partly opportunistic thinking of companies that could drive dealmaking in the next year.
"Cisco has clearly laid out all its cards on the market," said Hanna, referring to the networking giant's plans to sell servers for data centers.
Hanna said he reads the talks as "a preemptive move by IBM to take Sun off the table," to keep rivals like Cisco from getting their hands on a bigger piece of the data center pie.
IBM may be betting that it can do a better job than Sun in taking advantage of these emerging technologies, and use it to compete better against Cisco and HP.
The Wall Street Journal reported that IBM has offered between $10-$11 a share for Sun, the Java software maker, or a total value of $6.5 billion, net of cash.
That's the kind of deal size big companies will be comfortable with as they look to plug holes in their software, services and hardware offerings for enterprises, said Highland Capital's Bell.
Bell, a former chief executive of information storage company StorageNetworks, said small acquisitions were unlikely to satisfy the appetites of large companies.
Rather, companies with market values of between $1 billion and $10 billion would be the focus of acquisitions, he said.
The thinking is more like, "If I can find a larger player, maybe I can accelerate and leapfrog, maybe 12 to 24 months, on my competitor," he added.
Agencies
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