Engineers On Google's Self-Driving Car Project Were Paid So Much That They Quit (theverge.com)

According to a new report from Bloomberg, most of the money Google spent on it self-driving car project, now spun off into a new entity called Waymo, has gone to engineers and other staff. While it has helped retain a lot of influential and dedicated workers in the short run, it has resulted in many staffers leaving the company in the long run due to the immense financial security. The Verge reports: Bloomberg says that early staffers "had an unusual compensation system" that multiplied staffers salaries and bonuses based on the performance of the self-driving project. The payments accumulated as milestones were reached, even though Waymo remains years away from generating revenue. One staffer eventually "had a multiplier of 16 applied to bonuses and equity amassed over four years." The huge amounts of compensation worked -- for a while. But eventually, it gave many staffers such financial security that they were willing to leave the cuddly confines of Google. Two staffers that Bloomberg spoke to called it "F-you money," and the accumulated cash allowed them to depart Google for other firms, including Chris Urmson who co-founded a startup with ex-Tesla employee Sterling Anderson, and others who founded a self-driving truck company called Otto which was purchased by Uber last year, and another who founded Argo AI which received a $1 billion investment from Ford last week.

Comments

Re:Makes no sense

[nitehawk214]

The article is what makes no sense. If all these employees were making huge amounts of money, why would they leave and start companies in the same industry? They obviously felt they could make more money on their own or at different companies.

Looks like a simple case of a CEO looking at the peon employes and thinking "look at all those overpayed assholes." The "overpaid assholes" then leave the company, and the CEO finds out all his talent is gone and his company is bust.

How to keep your workers

[AHuxley]

A single person attracted by cash is a contractor or mercenary. In the same way people work for the US gov as a contractor. Its all about the cash until they have enough cash to retire or can create their own company.
Never allow your bands cash flow to be another persons life style enabler.
Don't hire single people. They have too much freedom to save and the smarts to think about the next job or their own project or brand.
Not just day dream like average workers, they can save and create their own job. Stop funding that ability.
When looking for staff, consider the people around the selected worker and what they need.
Would a selection of nice, local company homes in a good part of the city help? That really, really good private health insurance that covers everything, all the time with none of the expected questions? Private education? Holidays options that only a company with international connections can make happen?
Further education?

Project within projects to keep that one needed worker intellectually engaged. Have other staff create a project just for them. Avoid that sheltered workshop, busy work, side ways promotion feel, make the worker really think they are really working hard to something vital.
Drop in the reward, something really earned. Keep it random so the worker feels like they earned it and are moving up.
So the worker can tell people they really accomplished something none of their colleagues could or did.
Do such things cost a company a lot? Make the loss of that free lifestyle, support and needed health care be very difficult to rationalize to the people around the worker.
Cash is just too tempting to move on with given staff skill sets. Get that loyalty feeling up.
Another option is to show what trying to start a new job will be like.
Say a worker walks out.
Show what the outside world is now like, trying to start their own brand, how fast savings get lost on a dream. Still trying to find another company to work for or with...

Re:Rex Tillerson

[swillden]

Yeah, that's one. What do you think the odds are of the same thing happening to every Engineer at Google w/ aspirations of being a CEO?

Low, but that's not really the point.

The point is that if the engineers are paid so well that they no longer need their Google income, they're free to go try to become a CEO of their own mega-successful startup. Whether or not the startup is likely to succeed doesn't change that equation, especially if they're careful to avoid putting much of their own cash into it, so they are still comfortable even if their startup bombs -- as it most likely will.

Another Google-related example of this phenomenon, I think, is the now-discontinued "Founder's Award" program. It used to be that truly exceptional performers could win a Founder's Award which came with a huge cash (or stock, not sure) bonus... like $10M. The theory was that it was a way to convince people that they could become wealthy by staying at Google, rather than leaving to found their own companies. It was quietly discontinued, though, and the rumor is that it's because they discovered that nearly all of the winners took their big pile of cash and left to found their own companies. The sort of people who won the awards were exactly the sort of technically-skilled but entrepreneurial leaders who were well-suited to and interested in starting their own companies. Not giving them a big pile of cash might make them decide to leave, but giving them one pretty much guaranteed it.

So, I guess the ideal compensation approach for retention is to walk the line between paying them enough that they can't leave without taking a pay cut, but not so much that they become financially independent.