Google, land of the spoiled brats?

Meg Whitman’s swipe at Google's perks raises questions about how execs get compensated versus everyone else

Meg Whitman, as you may have heard, is running for governor of California. In her new book, "The Power of Many," the ex-CEO of eBay talks about the importance of being frugal. For some reason, she scolds Google specifically for the perks it gives its employees. She warns that "there are dangers to creating a perk-filled culture...the free gourmet cafeterias, free haircuts... It can be difficult to adjust people's expectations once they have gotten used to certain indulgences."

As a visitor I've experienced these indulgences firsthand, and yes, they are a little over the top. A couple of months ago InfoWorld's Neil McAllister wrote a hilarious takedown of the smugness that can result from such excesses in his personal blog.

[ Neil McAllister may have had trouble getting a drink of water on the Google campus, but he came back with a great analysis of Google's Chrome OS. ]

On the other hand, Google can spend its money however it wants to, and you can argue those perks are brilliant marketing, not only in attracting young talent but in helping to create a woo-woo factor that few other companies inside or outside of Silicon Valley have ever enjoyed.

So to what "dangers" does Whitman refer? Presumably, her point is that when you shower your employees with perks, you spoil them, so if the focaccia is a tad soggy one day, productivity flags or -- in her reference to "expectations" -- employees will pack up and go elsewhere if a reversal of fortune causes those perks to be rescinded.

This doesn't bring to mind any Google employee I've met. In fact, I believe those company perks have helped yield an environment where most employees devote too much of their lives to Google -- and rarely shut up about how lucky they are to work there.

It is true, however, that Google will hit a rough patch one day, and it may well decide to cut costs by installing a cash register in the cafeteria. Across the company the Odwalla coolers will go empty. The net on the beach volleyball court will fray. What will happen then?

It will be a sad time. Googlers will sulk and commiserate. The rest of us will get a small taste of schadenfreude. But in the end, Google employees will console themselves with the knowledge that they work at one of the most innovative tech companies in the world, while most of the rest of us will not.

Perhaps the strongest business argument against perk mania is that if you're going to spend that much money on perks, at least make them performance-based. I can buy that. But why should that principle apply only to the rank and file?

Last September The Street published an interesting article by Eric Jackson about Whitman's tenure at eBay. He writes that "something happened in Whitman's last four years on the job in which her pay became dramatically disconnected with eBay's stock price and her perks started to go through the roof." From 2005 to 2008 eBay's stock declined 59 percent, while at the same time, Jackson alleges, "Whitman's interest had drifted away from increasing the stock price of eBay to increasing her cash compensation and perks." According to Jackson, in her last two years, this included nearly $1 million per year in expenses incurred by flying around on the corporate jet for personal business.

Yet in Whitman's diatribe about frugality, she has the gall to write this about her reign at eBay: "We had Bagel Wednesday, and we had to plead for those."

Yes, this may well be a time for belt tightening, and most people I know who work in IT are feeling more than a little constricted around the middle. But why can't execs and everyone else play by the same rules? And if that's not possible, please refrain from gratuitously advising companies to stop sharing the wealth with their employees when business is good.

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Copyright © 2010 IDG Communications, Inc.

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