Google’s Schmidt pays for UK tax comments, gets the tabloid treatment

Eric Schmidt, chairman of Google, recently made a flip comment in the UK in response to news that the tech giant paid just $16m in taxes on $18.5-billion in UK revenues.

He said he had a fiduciary duty to his shareholders to pay as little overseas tax as legally possible.

The British hate paying taxes but consider it a social duty for the upkeep of their communities – and everyone is expected to pitch in and pay their fair share. Not understanding the culture, Schmidt’s Ayn Rand-ish comments seemed better suited for Silicon Valley, and did not sit well with the British public. Which now makes him fair game for British newspapers.

Some of the attention has been tame: Ed Hammond at the Financial Times wryly noted that Schmidt, “Is searching for a London mansion – a prospective £30m purchase that would land him a higher tax bill than the internet group has paid on average in the UK in recent years.”

The tabloid newspaper the Daily Mail, which runs the world’s largest news site, went much further. It published a lengthy, raunchy, unflattering account of Mr. Schmidt’s sex life, complete with photos of “his string of exotic lovers.”

Caroline Graham reported:

The unlikely sex symbol with thinning hair and pockmarked skin has embarked on a string of affairs with younger women, including a vivacious TV presenter who dubbed him ‘Dr Strangelove’, a leggy blonde public relations executive and a sexy Vietnamese concert pianist.

The headline pulled no punches:

The £5.4billion Google love rat: How boss, 58, of internet giant resisting online porn crackdown has a string of exotic lovers in his ‘open marriage’… but DOESN’T want you to know about it

He is the billionaire Google boss under fire for encouraging the company to ‘avoid’ paying massive corporation tax in the UK and for not doing enough to protect children from internet porn.

The reporter Googled much of the information in the story from other newspapers and US web sites such as Gawker. But she did try to take the story further by contacting his wife about their open marriage, and others close to Schmidt.

It’s clear that Google’s use of controversial methods in minimizing corporate taxes is starting to backfire. The tax savings will have to be weighed against the costly damage to its brand, and not just in the UK. Not to mention the costs of the salacious attention to Schmidt’s personal brand.

UK tabloids might decide to focus on founders Larry Page and Sergey Brin next. Maybe even send their paparazzi to their annual executive retreat at Burning Man, which would be a massive buzzkill.

Google has to turn around public opinion quickly or the ongoing brand damage will become ever more costly. It has a fiduciary duty to its shareholders.

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This article by Tom Foremski originally appeared on Silicon Valley Watcher, a Burn Media publishing partner.