[jimmywanger]

Totally and completely agree.

Let's take a case study here. Rackspace, a company that was just taken private, and Google.

They have almost identical P/E ratios, and the market cap for Google is 125 times that of Rackspace.

From what I can search around for, Rackspace has 6200 employees. Google has 53,600. Google makes roughly 15 times per employee in profit (not revenue) than Rackspace does. If Google's headcount to profits were the same as Rackspace's, the market cap of Google would be about 35 billion.

That being the case, heck yeah Google will kick down an extra 40k a year to an engineer. Makes perfect sense for them.