Payouts may have contribued to a talent exodus at Google's car project

https://www.bloomberg.com/news/articles/2017-02-13/one-reason-staffers-quit-google-s-car-project-the-company-paid-them-so-much

by lxm • 9 years ago

127 112 9 years ago

bloomberg.com

zitterbewegung• 9 years ago

I think the article is overemphasizing the money that the people earned with the project but instead people got disillusioned with the project and since they amassed enough money then that is why they departed the project. They even state this in the article.

no_wave2• 9 years ago

Excellent journalism - anonymous sources speculate as to what might have caused people to leave a company.

Also pushes the new business-friendly narrative that it's good for companies to pay their engineers less.

Well done, I hope the author's boss is proud.

AlexC04• 9 years ago

You don't feel this is a strong argument in favor of the de-regulation of minimum wage? Freeing businesses from the growth stifing yoke of employee voluntary attrition?

Ughh... reading this is ridiculous. Do we think bankers' salaries prevent them from staying at banks? Doesn't the first sentence answer the question of what really happened?

     > For the past year, Google's car project has been
     > a talent sieve, thanks to leadership changes,
     > strategy doubts, new startup dreams and rivals
     > luring self-driving technology experts.

Poor leadership & competition. Easy to point fingers elsewhere, but everything we know about motivation says that autonomy, making a difference and a whole host of other "soft reasons" are the factors that drive it forward.

The people who left didn't STOP working on self driving cars. So they still love the work and are engaged by the dream of doing that. So theoretically - if Google had adapted to their needs & wants they could have retained the employees. Instead poor leadership drove them out the door.

no_wave2• 9 years ago

But the anonymous sources are saying that the only problem was that Google was too generous. Clearly we should believe them at face value.

maxxxxx3• 9 years ago

I am all for higher salaries but there is some truth to the dangers of overpaying. Give me 5 million dollars and you will never see me again. Give my CEO 5 million dollars and he'll keep going. On the other hand, give me 250000 dollars and you will have a very happy and loyal employee.

JackFr2• 9 years ago

I doubt very much that you would quit after getting a 5mm bonus. I've seen some pretty ridiculous Wall St bonuses from the 90's up close.

I think a more typical response would be, "Hmmm. That wasn't so hard, let's see if they do it again next year." And when they don't -- that is typically when you walk.

pvelagal• 9 years ago

5 million dollars will look great only until you have them. Once you get your 5, your next target may be 25, then 125.. x=5*x. Engineers who work to create amazing things, work to get a kick out of creating cool stuff.Same case with CEOs. money feels great, but never enough..

waisbrot3• 9 years ago

If I pay you $5M and your job is "work at this hellish call center" then yeah, you probably will take it as a lottery ticket and get out. If we make the CEO miserable (every day you must call each board member individually and explain why the company's stock has not gone up yet), I bet they quit too.

The important factor here isn't the money.

beering• 9 years ago

I think part of the problem in this case was that it didn't seem likely they would get such a big payout again.

On Wall St, there's always a bigger bonus to aim for at the same firm next year. At Google, if you wanted to take your big bonus and turn it into more millions, you'd better try starting a new business.

throwaway40483• 9 years ago

1. If you work at Walmart you'll quit whether you're happy or not

2. If you work at Waymo you'll quit only if you're unhappy

ryandrake3• 9 years ago

You're probably right on, despite the down-votes. This is almost certainly a Submarine Article [1] pushing the tired "engineers are overpayed" narrative. Wonder who's funding whatever PR firm put it out...

1: http://paulgraham.com/submarine.html

tptacek4• 9 years ago

Almost certainly, you say!

It's hard to think of something Paul Graham wrote that has done more damage to discussions on HN than his piece about submarine PR pieces.

dang3• 9 years ago

The problem here isn't that such things don't exist (no doubt they do) but that readers frequently confuse that with what feels like it simply has to be true based on the strength of their pre-existing opinion.

The usual path from "I don't like X" to "X is objectively false" to "no one would ever X in good faith" to "How much did they pay you for X, asshole" (not that you said that, but it's the flamewar end-state) never actually consults with reality. Since substantive discussion depends on looking beyond our pre-existing opinions, this is a problem for substantive discussion. Worse, it feels like being a champion of truth, so a lot of intense energy flows into it, so flamey passion goes up as substance goes down—a perilous combo.

I don't know what a full solution would look like, but at a minimum, HN comments on such issues—if they're to be good HN comments—need to show some sign of breaking out of that self-referential cycle. That's why we tell users that they're not allowed to accuse others of astroturfing or shillage without evidence, and always add "an opposing view is not evidence".

beamatronic• 9 years ago

I just realized the genius of the name "Alphabet".

By investing in this company you are "betting" that they will be able to generate "alpha" ( in the financial sense )

http://www.investopedia.com/terms/a/alpha.asp

sparky_z• 9 years ago

Yeah, they said that in the original press release.

beepboopbeep• 9 years ago

...Oh hell, I just thought it was because they had such a big portfolio of endeavors.

Now it just comes across as tacky.

ggame• 9 years ago

I thought it was because Umbrella corp was taken

kyrra• 9 years ago

This was called out in the announcement of the company:

We also like that it means alpha-bet (Alpha is investment return above benchmark), which we strive for!

https://googleblog.blogspot.com/2015/08/google-alphabet.html

CobrastanJorji• 9 years ago

You could also consider Google as Alphabet's primary, or "alpha" bet, but Google is also investing in a variety of "other bets". The name also provides for cool URLs, like https://abc.xyz.

jogjayr• 9 years ago

Serious (and off-topic) question: did Silicon Valley name Hooli XYZ as a nod to that domain name? A whois seems to indicate that the domain was created a year before the second season of the show, when Hooli XYZ made its first appearance.

kobeya5• 9 years ago

A beta-bet, if you will.

bbcbasic• 9 years ago

Alternatively they could have named themselves "tautology"

FreedomToCreate• 9 years ago

I don't think getting paid a large sum of money is the contributing factor for the departures. If this was true, than logic would dictate that no company should be able to retain executives based on their compensation payouts each year.

If anything, the exodus at google shows clear lack of vision and direction from the management and executive teams. Engineers care about achieving something they can feel proud of and if the project lacks that, they move on.

This article is written in a way that suggests engineers should be paid less so that they remain loyal...you know, like slaves.

tptacek4• 9 years ago

Two problems with this first-principles analysis:

1. The highest paid executives in other industries tend to be at the apex of their careers, and new startups would be a status step down for them.

1. Empirically, executives do switch companies somewhat routinely.

Your last sentence presents a false dichotomy: either we're meant to reject the notion that flight money is a real phenomenon, or we're required to believe engineers shouldn't be compensated above slave levels. There's a huge excluded middle in that argument.

phillmv3• 9 years ago

I would buy this more if we routinely heard "problems with retention" as an issue with runaway executive compensation.

It's possible I've not seen them, but seems curiously absent in the discourse to me.

gonehome• 9 years ago

Google seems to have some trouble with execution.

Tesla's 'master plan' is pretty easy to understand externally and gives a clear path/vision forward. How Google plans to actually use their autonomous car tech is unclear from the outside (and I suspect also unclear on the inside).

Tesla's focus on manufacturing and using already sold cars to train their software was a really good plan. Google can't really compete with that even with their fleet of waymo mini cars - it also leaves the big problem of manufacturing cars unsolved (partnership? licensing?).

This seems especially tricky when any car manufacturer that plans to exist in a couple years is already building out their own software divisions with a focus on autonomy.

I'd suspect the engineers see that the management plan isn't going to win so they'd rather jump ship to someone that's doing a better job of it.

This seems to be a recurring trend with Google - get in early with something good, but then let others eventually catch up and beat you.

segmondy2• 9 years ago

Not true, executives don't create shit. If they leave without any prospect of making money, they can't create on their own to earn. Developers are creator, given enough money, most would leave to take a chance at bringing their own creation into the world. This creation could possibly make money. Sometimes it's not even the money, it's the idea of having your project seeing the light of day. Working on a project that might not see the light of day or that might ship in 10yrs can be very frustrating for creators.

hellofunk2• 9 years ago

This comment is a gross misunderstanding of what good executives do, and they are indeed critical players.

dsacco3• 9 years ago

This is a very high school perspective to take on the difference between developers and executives.

I imagine you'd rather live in a world ruled by programmer-kings who are the only people capable of creating value, while all the other peons toil away in the service of their creation with their inferior, bogus skillsets.

CryoLogic2• 9 years ago

The best execs are responsible for a few things:

1. Creating and Maintaining a vision for the future of the company based on industry experience, research and hypothesis.

2. Keeping all of the teams and players up to sync on that vision.

3. Driving the development of that vision from day to day and pivoting when needed.

So while they might not be "creating" code, it is important to note that code alone doesn't make a company and leadership is essential especially the larger a corp becomes.

gizmo• 9 years ago

Executives create the organization itself. A company has many moving parts, each with their own constraints, their own goals, and their own limitations. We talk about building a company because all these parts need to be shaped in such a way that they work together towards a common goal. This is not just difficult and cross-disciplinary, it's also intellectually challenging work, and as real a form of creation as writing software. Companies don't create themselves, and people don't automatically organize themselves. You need people who specialize in this, if you want it done well; you need executives.

Sure, we roll our eyes at the nonsense language executives spout, and at the political games they play. And yet good executives create functional companies with a good corporate culture, where good engineering can take place. You might ask yourself: if everything is running smoothly, what do we need the executives for? Much like the IT guy who doesn't get appreciated for preventing disasters, the work executives do is invisible when done well.

Besides, the line between creation and facilitation is a blurry one. Without salespeople there is no budget for programmers to create things. Does that mean salespeople as non-creators are deserving of our disdain? Or should we just appreciate them for fullfilling a vital role within the company? Suppose that executives were non-creators (and they're not), why does it matter? They're nonetheless vital for the company's success.

trhway2• 9 years ago

I don't think getting paid a large sum of money is the contributing factor for the departures.

the stop of that large money is what seems to have happened:

"In December, the car unit morphed into a standalone business called Waymo, and the system was replaced with a more uniform pay structure that treats all employees the same"

Engineers care about achieving something they can feel proud of and if the project lacks that, they move on.

they achieved "milestones", got handsomely paid for that, after that the payment structure changed back to regular with no such payouts in the future, and the real achievement - fully autonomous car - is still long in the future with a lot of grunt unglorious work to be performed in order to reach that future ... While other companies invite you to make the same glorious "milestones" for even bigger money - sounds like no-brainer.

Google wanted that division to be like a startup - they seems to have got it right to all the details, including that exodus after cash-out on an "exit" with product barely reaching prototype stage and powerpoint of trillion dollar business. An expensive at that - 16x "valuations" growth applied to 4 years of an engineer's bonus and equity - i.e. something like 16 x $1M = $16M per engineer (nicely matches market going rate for AI and other hot aquihires. man! i should have made a career out of that GC hobby back in 2004-5 :) - i'd not be surprised if Ruth had heart attack upon seeing those numbers :)

beaner• 9 years ago

The article says departures increased during 2016. The pay structure only just changed in December. Departures were increasing over time before the pay structure changed.

kristianc• 9 years ago

This article is written in a way that suggests engineers should be paid less so that they remain loyal...you know, like slaves.

Isn't that the argument behind Daniel Pink's book?

kobeya5• 9 years ago

No, Drive is about intangible benefits. The connection to salary is secondary.

TorKlingberg• 9 years ago

I don't think it was the engineers getting paid huge bonuses, but the project executives.

christophilus• 9 years ago

I've left a company (Microsoft) in part due to big bonuses. In my case, it was because the bonus gave me psychological stress. I felt a lot of (self-imposed) pressure to keep performing at a very high level. The bonus was given to me because I did a lot of work to get a product out the door successfully. That process was frustrating and painful. The big bonus made me think "we expect more of the same!"

In retrospect, that's not at all what management was telling me. But I felt it. And I didn't want to go through another year like the one that led up to the bonus. And I didn't feel like climbing a career ladder (the way Microsoft at the time seemed to encourage). I just wanted to be a simple software engineer and build cool stuff.

I guess what I'm trying to say is anecdotally, actions (including big salaries / bonuses) can have unintended consequences.

Take IBM's recent initiative to kill remote work. Well, a predictable unintended consequence of that is a brain-drain. Those who aren't capable of finding other jobs will stay at IBM. Those who are capable will leave for greener (and remote-friendly) pastures.

rm_-rf_slash• 9 years ago

That was a very interesting and meaningful anecdote and I appreciate your sharing it with us. Thank you.

muzz• 9 years ago

I would have taken the opposite view-- that a bonus was for hard work already done, not an expectation of future work. A salary increase would represent that expectation.

kobeya5• 9 years ago

I have never ever thought of a bonus as expectation for future work...

pyoung• 9 years ago

It sounds like you left because you were burnt out. The fact that you were incented by larger bonuses doesn't change that. Many industries and companies use bonuses as a way to incentivize over-work (Wall St in particular) and they expect and plan for a certain percentage of employees to quit each year because of it. The fact is, the more you pay employees, the more you can demand from them. And most of the employees who quit to find a job with better work life balance aren't leaving because they got paid too much, they are leaving because they were too stressed out.

rhapsodic• 9 years ago

You made the right call by leaving after you got the bonus, rather than just before it was to be paid out.

gregshap2• 9 years ago

I think it's more like if you pay someone FU money to stay for a fixed term or milestone, you'll need to pay them exponentially more FU money to stay for the next milestone.

Many top executives are on this track as well, which explains some of the crazed pay scales.

ufmace• 9 years ago

Agreed. I would think tons of engineers would kill to be on a project to build the first real self-driving car, whether they're getting paid millions or thousands. If people keep quitting after making a pile of money, that sounds more like it's clear to everyone from the bottom up that there's no real commitment or ability to execute on this than that they're paying people too much. No surprise if everyone is jumping ship to other companies that have an actual plan to get people into self-driving cars.

user59944613• 9 years ago

People will always quit for a bigger pile of money. It's that simple.

IshKebab• 9 years ago

I'm not sure engineers and executives are similarly motivated. I'm pretty sure most engineers (at least the ones that work at Google and read HN) have tons of ideas about hobby projects they'd love to work on full time if only they had fuck-off money.

I would expect most executives like the power of being executives at established companies and managing lots of people, and they probably have fewer personal projects that they want to do. Maybe I'm wrong; I'm not an executive.

throwawaycanada• 9 years ago

Clearly you can't pay commoners too much. Only upper class people should get upper class money. One has to maintain the social order. God forbid those people who all "quit" use their newly earned capital to start their own enterprise.

dang3• 9 years ago

Please don't post snarky rants to HN. Doing so pulls discussion quality below the level we're hoping for.

startupdiscuss2• 9 years ago

In an alternative universe:

1. the regulatory environment in the US was relaxed

2. the cars were a big hit, and

3. there are articles about how far sighted Google was for letting the research project have these startup like returns.

jessaustin2• 9 years ago

...the regulatory environment in the US was relaxed...

Have onerous regulations been a problem for robocar development? If they were, I sort of think I would have heard of it, particularly here on HN where such vehicles are a common topic of conversation.

ocdtrekkie2• 9 years ago

Google has routinely claimed or indicated that regulations are a significant roadblock[1][2][3][4] for self-driving cars. I would argue this is a misdirection, as regulations would not be an issue if the cars were safe to drive.

[1]https://www.wsj.com/articles/googles-self-driving-cars-hit-r... [2]https://www.texastribune.org/2013/02/21/googles-self-driving... [3]http://time.com/4152958/google-california-self-driving-car-r... [4]http://www.reuters.com/article/us-google-selfdrivingcar-idUS...

waisbrot3• 9 years ago

If there weren't these rules about not killing pedestrians or ramming buildings I could make a robot car myself! Another small business smothered in the crib by government overreach.

michaelt• 9 years ago

The impression I got was that Google got a sort of "first mover disadvantage" - they did all the leg work (and provided the reputation) to get legislators to come up with frameworks for issuing approvals and whatnot.

That's not to say the regulators were obstructionist or anything - but these things can be difficult even when there aren't any obstructions.

waisbrot3• 9 years ago

I'd interpret the content of the article as the opposite of the title: "One (the only?) reason staffers didn't quit Google's car project before now? The company paid them so much"

Multiple big players want to get into autonomous cars (and other vehicles -- this is the same space as military contracts for drones) and Google's executives were in total disarray. You'd think they'd lose out but instead they successfully hit some giant milestones by throwing enough cash at the problem.

I mean, if the staffers had been paid poorly, wouldn't they have quit without waiting for that 16x bonus that only comes after meeting the division goals and then waiting four years?

gigatexal• 9 years ago

Isn't there an on-premise labor economist on the payroll? I mean, a bachelor level econ student could have told them this. Interesting still, is that there is real-world proof of an upper limit to pay in this industry given the a typical labor-leisure curve

JustSomeNobody• 9 years ago

And a million MBA heads just bobbled as they agreed, "Yes, yes, we pay engineers too much! Mwaaaahahaahahaa!"

Steeeve• 9 years ago

That's a bozo of an excuse if I ever heard one.

Lack of vision, lack of direction, failure to set expectations or execute a plan, better opportunities elsewhere, poor management... those are all reasons for brain drain.

Gave them too much money? That's absurd.

Honestly, it looks more like a propoganda message to pre-explain shrinking bonus money.

amorphid• 9 years ago

Crazy thought... If this is even possible, create a standard for everything key employees should know. Pay people great, but not GREAT. Bank up "eff you" money for them. If they want to quit, they get the banked money as long as there are enough people on team to carry on without that person.

Might not be practical for a number of reasons. Just sounds interesting, without having put any thought into the idea beyond the time it took me to write this comment.

matart• 9 years ago

"F- you money" is the amount of money that allows you to do what you want, i.e. leave when things do not go your way. This must mean the staffers did not want to be there for some reason or another.

This is interesting because they were helping build the future. It's easy to see why people might not be excited or passionate about the next CRUD app but self driving cars seems like a passion project to me.

ocdtrekkie2• 9 years ago

Many of these people are passionate about building the future. ...that's why they left Google.

Bear in mind, many of them are still working on self-driving cars, they just went to work for other companies. If as you say, it's a passion project, they are going to go to whoever they think is best equipped to accomplish the vision. Especially since money is no longer an issue for them.

yalogin• 9 years ago

Did they pay F-You money to the engineers or the management? Because no matter how much you pay its not going to be enough to make one retire (in 5 years). Unless of course they really paid 10s of millions. That means if they are really paid, employees would rather not leave.

The main reason its a sieve is that they realized they could make more money by leaving. They saw examples with Otto and others.

loeg2• 9 years ago

I'd be comfortable retiring with a "mere" $2 mil bonus payout. But I'd also stay on at a job I enjoyed, especially something as important to society as self-driving vehicles.

gmarx2• 9 years ago

I really enjoy the tone of this article. It's written like they are tracking down the steps that led a company to dump toxic chemicals outside a grade school. Considering I see Google self driving cars self driving all over the place and I don't recall seeing that before 2010, maybe the idea worked?

carsongross• 9 years ago

I wonder if companies will ever take a page from the public sector and offer crucial employees pensions based on staying on for a long time.

jayjay712• 9 years ago

How many companies will still be around in 50+ years?

loeg2• 9 years ago

I don't know that that can work in the tech sector — you'd have to scale down "long time" to accommodate higher pay (and thus earlier retirement) and even then I'd be wary of taking a job if I knew the pay was heavily backloaded.

gregshap2• 9 years ago

As usual it sounds like the story is more nuanced than the headline.

A more accurate phrasing might be "One reason staffers quit google's car project? The company structured their pay so that an intermediate project milestone was treated like an IPO event."

It's not that the employees got rich so they no longer cared about money, it's that they basically got their maximum bonus from Google, so they were better off taking their talents elsewhere to get the next big payout.

Given that their CFO discussed these payouts on the earnings call of a company with $6.6 billion in operating expenses, it sounds like these were entering the $100million range. Makes sense given that Google was trying to recruit and motivate people to work on startup projects, while overall Google market cap wasn't going to grow exponentially the way that a 2011 facebook or uber might. It probably wasn't a bad idea, they just executed in a way that only incentivized employees to get partway done.

anindha• 9 years ago

Agreed. If they were told to hit a certain set of milestones, and they did, I don't see why its an issue after the fact. The people that received the bonuses did their job and deserve what they were promised.

After hitting all those milestones and not seeing a car on the road, I can imagine that as a reason to be disgruntled and wanting to move to another company.

jorblumesea• 9 years ago

But they also got the best people in the industry and the results they wanted. Engineers that may have ended up working at Lyft, Uber or other companies.

This just in, startup type incentives does work and also produces startup like effects including bouncing around more than they would like.

Fricken• 9 years ago

Maybe in a decade when this is all water under the bridge we'll get the real story about what sort of drama went down to cause all their top people to flee.

It may be been banal. Now that the visionary part of the program has been executed, and with development more or less on rails, it's possible there simply isn't anything exciting left for the top guys to work on. That and they're all extremely valuable to car companies who would rather not get left in the dust.

Payouts may have contribued to a talent exodus at Google's car project

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