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  • Writer's pictureJeff Matthews

Don’t Tell Ben

Google to Give Staff 10% Raise —Wall Street Journal, November 10, 2010

That is the headline and this is the story, which we are not making up:

Moving to plug the defection of staff to competitors, Google Inc. is giving a 10% raise to all of its 23,000 employees, according to people familiar with the matter.

The raise, which will be given to executives and staff across the globe, is effective in January. According to the Journal, there is a competition for talent in Silicon Valley that is forcing Google’s hand:

Chief Executive Eric Schmidt disclosed the raise in an email to employees, saying the company wants to lift morale. “We want to make sure that you feel rewarded for your hard work,” Mr. Schmidt wrote. “We want to continue to attract the best people to Google.” Mr. Schmidt has apparently not been reading the same, backward-looking economic statistics that recently prompted Fed Chairman Ben Bernanke to announce a second round of quantitative easing, by which he intends to buy Treasury notes yielding less than one-tenth the raise now being showered on Google’s rather hefty employee base of 23,000 souls.

What with Kellogg’s recent price increase on 40% of its U.S. product lines and a host of positive earnings announcement from railroad companies to watch makers, not to mention Google’s voluntary increase in employee compensation at 5x the backward-looking CPI, one might deduce that the outlook for employment is a tad better than Bernanke believes it to be. And that buying Treasuries at all-time low yields will go down as folly.

But, as is usually the case with officials living in Washington DC, it may be best not to confuse him with the facts. This is, after all, the same Fed Chairman who said—as late as March 2007—the subprime housing crisis was “likely to be contained”….

Jeff Matthews I Am Not Making This Up

© 2010 NotMakingThisUp, LLC

The content contained in this blog represents only the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

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