Report: Google lost early self-driving car staff because they got paid too much

Alphabet’s self-driving car unit hasn’t been a stranger to the inconvenience of constantly rotating staff, but now we’re hearing about one interesting piece of Waymo’s situation in particular that helps explain recent trouble retaining talent. According to a new report out of Bloomberg, early staffers were paid in an unusual way that later severely inflated compensation and led to exodus of early staff…

The problems of “leadership changes, strategy doubts, and new startup dreams,” as Bloomberg notes, have already caused Waymo employees to be a bit less sticky than average, but this little detail doesn’t seem to have helped. According to the report, inflated compensation caused early staffers to no longer need job security around the same time that competitors were beginning to recruit much more heavily.

At least two people referred to this as “F-you money”:

Early staffers had an unusual compensation system that awarded supersized payouts based on the project’s value. 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.

The system sounds good in theory, since is detached the compensation of self-driving car staff from the Mountain View company’s traditional advertising business.

It was constructed to tie employees’ fortunes to the performance of the project, rather than Google’s advertising money machine. In addition to cash salaries, some staffers were given bonuses and equity in the business and these awards were set aside in a special entity. After several years, Google applied a multiplier to the value of the awards and paid some or all of it out.

But apparently, it didn’t really work too well in Google’s favor. As you may or may not recall, Google’s self-driving car program lost its key long-time CTO and director Chris Urmson and two other early members of the project in August of 2016. Urmson went on to start his own self-driving company and brought some members of the self-driving car team with him.

While this was definitely a problem as Google tried to transition its self-driving unit into a standalone business, Bloomberg notes that the pay system was completely overhauled around the same time that Google’s self-driving unit was spun out as Waymo, a standalone company under Alphabet.

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, according to a person familiar with the situation