Photo: All Things D
We already know one reason Google’s earnings came in light—Motorola was a bigger mess than expected.Here’s another reason, and one that’s not as easily fixed as Motorola. (Not that Motorola is an easy fix.)
In its most recent quarter, stock-based compensation jumped 33 per cent to $762 million from $571 million in the same quarter a year ago. That differential accounted for a good chunk of Google’s earnings miss. ($47 million of that was due to a restructuring charge.)
For all of 2012, Google expects to record $2.7 billion in charges for stock-based compensation.
Besides keeping employees from jumping to rivals, Google has to worry about startups luring engineers and product designers away with the promise of a big payday.
So it’s been lavishing big stock awards on key personnel, new and old.
One by one, an eight-figure package may not seem like much when Google’s taking in $14 billion a quarter. But $10 million here, $20 million there starts to add up.