Since Google turned its self-driving car project into a standalone company, Waymo, it has flourished. But the division apparently had a rough go of things in its infancy, which was largely caused by paying its staff too much money.
Unnamed sources close to the car project reportedly told Bloomberg on Monday that the department struggled to retain talent because it provided employees with too much financial security.
Before creating Waymo, Google reportedly paid workers in its self-driving division using a compensation system based on the project’s valuation. This resulted in many employees receiving bonuses by 2015 that were so large two of Bloomberg’s sources referred to them as “F-you money.”
It’s not clear how the system allowed compensation payouts to snowball the way they did, or how much the bonuses cost Alphabet Inc., Google’s parent company. But Ruth Porat, Alphabet’s chief financial officer, supposedly touched upon it while explaining why operating costs in the fourth quarter of 2015 increased 14 percent to $6.6 billion, according to Bloomberg.
“(The rising costs were) primarily driven by R&D expense, particularly affected by expenses resulting from project milestones in ‘Other Bets’ established several years ago,” Porat said during an earnings conference call.
While Google implemented a more-traditional payment structure when it established Waymo in December, it didn’t do so before losing staffers to competitors, as well as others who launched their own startups.
Several former members of Google’s self-driving car team left to form Otto, the autonomous truck company Uber has since acquired. Former executive Bryan Salesky also started his own company, Argo AI, which recently received a $1 billion investment from Ford. Interestingly, Argo seems to be using a compensation system similar to the one previously used by Google.
After Google stopped the bleeding, its autonomous driving technology project got back on track, and now has logged more testing miles than any of its competitors.
Thumbnail photo via Google