What happened when Google paid staffers in its Waymo car unit millions of dollars? They quit.
The Mountain View-based company introduced a unique pay structure in 2010 after it revealed its first self-driving vehicle. In addition to cash salaries, some Google car unit staffers were given bonuses and equity in the business, according to Bloomberg. The compensation package was meant to tie employees' payoffs to project performance.
But some of the awards resulted in multimillion-dollar payments after Google applied a multiplier to the value of the bonuses. The multiplier was based on periodic valuations of the division, Bloomberg sources stated. One member of the team had a multiplier of 16 applied to bonuses and equity amassed over four years.
By 2015, many of these staffers made so much money that they no longer needed a job and left Google to pursue other opportunities. Two people familiar with the situation dubbed it "F-you money," according to Bloomberg, which reported that some of the staffers who exited were apparently frustrated by the car unit’s pace of progress, while others had doubts about unit head John Krafcik.
In addition to leading to departures, the bonus costs may have had a noticeable impact on Google’s bottom line. Operating expenses in the fourth quarter of 2015 were up 14 percent to $6.6 billion, "primarily driven by R&D expense, particularly affected by expenses resulting from project milestones in Other Bets established several years ago," Chief Financial Officer Ruth Porat said, according to a transcript of the earnings report. While the CFO was not specific, one of the Bloomberg sources familiar with the situation claimed the comments were in reference car project compensation.
In December 2016, the Google car unit spun out as Waymo, which now operates as an independent company within Google parent company Alphabet’s umbrella. Waymo subsequently replaced the previous compensation structure with a more uniform pay structure that treats all employees the same, a source familiar with the situation told Bloomberg.
While not necessarily tied to compensation issues, last year’s car unit departures included former head of the project Chris Urmson, who left in August and is now working on a startup. Former Google car executive Bryan Salesky exited to found Argo AI, which received a $1 billion investment from Ford Motor on Friday. Other early project members formed Otto, a self- driving trucking company which was acquired by Uber last August.