Google’s Self-Driving Car Team Was Paid So Much That Employees Defected For Fresh Opportunities

Paying employees too little money will have them looking for better opportunities in greener pastures. On the flip side, if you pay them too much, they might also leave, though that's not typically a problem. It was for Google, however, which implemented an unusual and highly lucrative (for employees) pay system for its self-driving car division that led to top talent calling it quits.

In the early days, Google implemented a compensation system that awarded employees with huge monetary incentives based on the project's value. It did not take long for the project to ramp up and accumulate significant value, which in turn made the division's employees wealthy. Several of them chose to cash in their promised payouts and then leave the company.

Google Self-Driving Car

The system started in 2010 not long after Google unveiled its first self-driving cars. Employees were given cash salaries, but some also received bonuses and ownership stake in the business. Google set these awards aside in a special entity. By 2015, Google's self-driving car program had grown fairly large. Google applied a multiplier to the value of the awards and began paying it out, sometimes giving employees every last nickel that was set aside.

With these sizable payouts now in hand, veteran employees were no long motivated by job security. Some of them chose to collect their mega bonuses, or "F-you money" as they referred to it, and then seek opportunities elsewhere. In some cases, they were finally able to create or invest in a startup that interested them with their newfound financial freedom. As ironic as it seems, Google overpaid to the point where its employees no longer felt obliged to stick with the project. As a result, Google lost a lot of top-level talent right as its self-driving car program was gaining steam.

The multiplier that was applied to the value of awards was based on periodic evaluations of the division. It's not known what exact metrics or benchmarks were used, but in one case, a project member racked up a multiplier of 16 over the course of four years. These large multipliers resulted in multi-million dollar payouts.

Where Google erred wasn't necessarily in offering large compensation packages, but perhaps paying them out too early. The payouts grew substantially after reaching certain milestones, but the end goal of selling fully autonomous vehicles was still years away when the payouts were made.

Things are different now. Google's self-driving car division is now a standalone business called Waymo with a pay structure that treats all employees the same. The focus has also changed, with Google now looking to work with existing automakers to implement self-driving technologies and features into cars rather than build out its own fleet.