Googlers Pass on Massive Payouts

Can you have too much of a good thing?

A handful of Googlers working on the company’s self-driving car project seem to think so.

The Mountain View, Calif.-based tech giant’s car unit—which in December 2016 spun off into a standalone business known as Waymo—has seen staffers exiting in noteworthy numbers, and walking away from potentially huge paydays in the process, as Bloomberg reports this week.

The unit “has been a talent sieve” for at least the past year, according to Bloomberg, “thanks to leadership changes, strategy doubts, new start-up dreams and rivals luring self-driving technology experts.”

But the business’s “unusual compensation system that awarded supersized payouts based on the project’s value” has helped contribute to its retention struggles, notes Bloomberg. “By late 2015, the numbers were so big that several veteran members didn’t need the job security anymore, making them more open to other opportunities, according to people familiar with the situation. Two people called it ‘F-you money.’ ”

Indeed, “a large multiplier” was applied to compensation packages toward the end of that year, “resulting in multimillion-dollar payments in some cases,” Bloomberg reports, adding that one member of the team had a multiplier of 16 applied to bonuses and equity amassed over four years, for example.

The same article points out that the system was revamped when the autonomous car unit morphed into Waymo late last year, and replaced with a more uniform pay structure that treats all employees equally. By that time, however, “the original program got so costly that a top executive at parent Alphabet Inc. highlighted it last year to explain a jump in expenses.

“The payouts contributed to a talent exodus at a time when the company was trying to turn the project into a real business,” the article continues, “and emerging rivals were recruiting heavily.”

Part of the issue at Waymo “was that payouts snowballed after key milestones were reached, even though the ultimate goal of the project—fully autonomous vehicles provided to the public through commercial services—remained years away.”

While reports have underscored rumblings within the car division, ranging from questions surrounding the unit’s leadership and strategy to engineers’ designs on starting their own self-driving vehicle companies, “the big payouts exacerbated the [turnover] situation because team members had less financial incentive to stay,” according to Bloomberg.

Ironic, isn’t it, that the company would start losing talent by paying them too much? When was the last time your organization had this problem? If there’s a lesson here for HR and compensation professionals, it might be that over-the-top rewards might end up having unintended consequences, and that massive lumps of cash don’t necessarily guarantee employee loyalty.

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