Monday February 13, 2017

Google Paid Top Talent So Much That They Quit

When Google starts a new business venture, they tend to give huge bonuses for employees to stay and invent. These bonuses are based on the perceived value of the new venture. Needless to say, autonomous cars is a hot commodity today, and the Google employees working in the new Waymo division were well compensated. The bonuses were so ridiculous that employees coined the term "F-you money." They even received compensation as investments into the company and multipliers based on periodic evaluations. Some became millionaires on a product that still has years of R&D left before it can come to market!

This sounds like a great concept in theory, but in reality it has caused these employees to quit the company altogether. It seems that paying employees so well that they are financially independent means that they will leave and start their own companies, or work for someone else if a leadership change comes along. Also Google had to explain a 14% hike in operating costs because of the bonuses. Some employees even were able to start businesses with over $1 billion raised from venture capitalists. What a nice problem to have for the employees and a tangled web for Google.

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A large multiplier was applied to the compensation packages in late 2015, resulting in multi-million dollar payments in some cases, according to the people familiar with the situation. One member of the team had a multiplier of 16 applied to bonuses and equity amassed over four years, one of the people said. They asked not to be identified talking about private matters.