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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.
If they were only quitting because of financial security there wouldn't be a single CEO still working in silicon valley.
More likely there was something wrong in the work environment.
That combined with lots of money means they will move on to more fulfilling things.
...as in Waymo than we should have paid them.
So the engineers met the goals that earned the money. Google presumably didn't randomly set milestones, so the things they wanted they got. Headline makes it sound like there was an "oops," but I'm not seeing evidence of it.
Also, with the amount of money being thrown around at anything involving startup+AI+"silicon valley," I'm surprised anyone still works at google. If Google hadn't paid them an absurd amount of the even more absurd money they have on hand, would they have ever gotten anyone competent to work on it?
This is the problem with big corporations. Small firms and startups can offer a relatively large percentage of the payoff if successful. Google, while able to provide stock options out the wazoo, still can't offer the kind of equity in the company Sergey and Larry have. After all, even acquiring enough stock to offer a 1% payout on success would be next to impossible without either driving up the share price or diluting the pool with new shares to drive the price down. But if you're working for a startup with potential, hey here's 10% of nothing. If it works out, whoopee. If not, well you still have all that "FU money" from your previous employer.
I'm sure the same thing happened at Microsoft when they went public. I heard that people wore buttons that had the letters "FUIFV," which stood for "f*** you, I'm fully vested." I'm sure more than a few people decided to cut and run knowing their retirement, kids' education and possibly home were paid for. Just the right conditions for going out and starting your own company.
"Well, good luck finding a judge that doesn't run a bestiality site."
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.
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