February 13, 2017

Artificial Intelligence technical talent with F-you money do not hesitate to say F-you and leave for their own startups

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. Also, key talent had enough accumulated compensation so that they were no longer dependent on continuing salaries.

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."

Artificial Intelligence technical talent with F-you money do not hesitate to say F-you and leave

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. Still, the original program got so costly that a top executive at parent Alphabet Inc. highlighted it last year to explain a jump in expenses. A spokeswoman for Alphabet, the holding company that owns Google and "Other Bets" like the autonomous car business

The unorthodox system started in 2010, soon after Google unveiled its first self-driving vehicle. 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. The multiplier was based on periodic valuations of the division, the people said.

The precise metrics that the division was measured by-- and caused the bonuses to balloon-- are not known. But by 2015, the Google car project had come a long way: Google’s vehicles had logged more than one million autonomous miles; car companies including Toyota Motor Corp. and Tesla Inc. announced their own plans to develop autonomous systems; and analysts predicted the technology would transform the auto industry.



Staff departures from the car division increased in 2016. Some were frustrated with the pace of progress and had doubts about new leader John Krafcik, while others wanted to start their own autonomous vehicle companies, people familiar with the matter said. The big payouts exacerbated the situation because team members had less financial incentive to stay, the people familiar with the situation said.

Chris Urmson, previous leader of the project, departed in August and is working on a startup. Other early project members left to form Otto, a self-driving trucking company that was quickly snapped up by Uber Technologies Inc. Bryan Salesky, a former Google car executive, started Argo AI, which got a $1 billion investment from Ford Motor Co. on Friday.

Urmson and Salesky didn’t respond to requests for comment. Sebastian Thrun, who started the car project and helped design the pay system, didn’t respond to questions, either.





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