8 ms·

At the kind of scale Google operates on it's not crazy for one person (especially an executive) to drive $100m in value.

M_Grey 10y ago
Is it? It's understandable why they'd want to claim that, and why a culture might exist of mutually rewarding "brilliant leadership" with "competitive packages", but... come on. What do you think the ratio of people who are actually, individually responsible for $100m in value, to the people receiving compensation as though they were, might really be?
- austenallred 10y ago
  I think there are very, very few people who are worth $100m, but I absolutely believe that there are those people, especially within a company like Google. This isn't the first time Google tried to keep an exec by paying them $50m+ (nor is it the second) http://www.businessinsider.com/neal-mohan-googles-100-million-man-2013-4 http://www.businessinsider.com/neal-mohan-googles-100-millio... http://fortune.com/2016/03/29/googles-pichai-received-100-million/ http://fortune.com/2016/03/29/googles-pichai-received-100-mi...
  - M_Grey 10y ago
    I hear you, but I still wonder what kind of evidence I'd want to see laid out in front of me before parting with a cool $100 mil, and I somehow doubt that's how these things work.
    - maxerickson 10y ago
      I think the calculation is probably different when you are making "big bets" with other people's money.
      - deleted 10y ago
        [deleted]
  - username223 10y ago
    > I think there are very, very few people who are worth $100m, I'm not saying you're wrong, but I'm highly skeptical that one person would be worth, say, $99m more than a very-well-paid engineer, or $50m more than someone too rich to care about money other than as a way of keeping score, in just a few years. Rockstar executives get crazy money even when they run companies into the ground (see Meyer, Marissa) or merely keep them afloat (Tillerson, Rex). I suspect rockstar engineers are getting a bit of the same treatment, which has little to do with differences in performance among those making more than a small multiple of average pay.
    - defen 10y ago
      The mistake you're making is in thinking there is some objective definition of "value" - as in, there is some all-seeing entity which knows everything and knows exactly what a person "should" be paid. I would argue that that's a fundamentally incorrect way of looking at it. You're "worth" whatever you can negotiate for (making baseline assumptions about not defrauding people). If you can convince someone to pay you 10 million dollars to mow his lawn, I think you deserve every penny.
    - toufka 10y ago
      After thinking about it a while, I think part of the numbers come from a time-based valuation. Apple's chief council is likely not the only lawyer who could 'do his job' for that price. But I need someone to do his job this afternoon, no, now. Who has all the relevant information in their head so they can give me an informed opinion based on the entire company's operations and positions about a $10B decision that must be made by the end of the day. Go find me that person. How much would you pay to have that person here and now today rather than tomorrow to guide whether the price should be $21B or $18B for the deal.
    - hn_throwaway_99 10y ago
      I think you may be missing the point with examples of execs who got paid a ton of money even for mediocre or poor performance. The reason they got paid so much is that decisions at that level are absolutely "billion dollar decisions", in that the performance of the executive, and the executive alone, can be the difference between a super successful company and a failure. That is one reason why execs are paid so much - going in to the deal boards are betting that their execs will be one of the successful ones, not one of the failing ones. The same is true for "rock star" engineers. I absolutely believe there are a few engineers who can make the difference between being wildly successful or being an also ran. To use a well known related example, consider Jony Ive. I believe that his unique design talents have been responsible for billions of dollars in value to Apple shareholders.
- jgalt212 10y ago
  Amen, brother. I guarantee you if some brilliant guy thinks he's worth $100MM and you refuse to pay it and he walks there will be a very long line of equally brilliant folks who will settle for $10MM.
  - dangero 10y ago
    Google cannot afford to lose time. It's in a technology race. I'm not saying this guy was worth it, but it's not impossible to imagine how they make decisions like that. Time is much more valuable to them than money.
    - M_Grey 10y ago
      I'm not saying it applies here, but it's the core of many cons that you apply time pressure on the mark. "You can make all of this money, but only if you act NOW! Everyone else is doing it, they're smart and successful and YOU want to be smart and successful! I'm not asking for more than you can afford to spend, and I'm offering so much more in return! BUT ONLY IF YOU ACT NOW!"
    - jgalt212 10y ago
      What race are they losing? Google search/ads is a monopoly or duopoly. You don't need to pay execs $100MM to maintain this--just need to keep the DOJ off your back. The rest (self-driving cars, et al) is money losing window dressing.
    - srtjstjsj 10y ago
      When you pay people $100million for the grand accomplishment of sweet-talking the CEO, you get... Google+.
tehlike 10y ago
at the kind of scale, one engineer can drive that much value. Google's ads business is huge, and 1% improvement you can do (which happens all the time) could have outsized impact. It doesn't really have to be that complex of an improvement, either. PS: google employee
- austenallred 10y ago
  I don't doubt it. I can think of several small tweaks at companies I've worked at that have swung things $10m one way or another, and we're a tiny fraction of the size of Google. When you have millions (or billions) of customers, small changes mean a lot.
  - tehlike 10y ago
    yup - that's unfortunately also a reason why comp is not a linear function of impact.
    - lovich 10y ago
      I'd like to think that the fact that companies just want to keep the money, and the supply of other engineers, is why the comp is not a linear function.
- EGreg 10y ago
  Please see https://qbix.com/blog https://qbix.com/blog Why doesn't Google do this?
  - cowsandmilk 10y ago
    That relies on having a product that is already generating revenue, how do you apply that to R&D like autonomous cars where that revenue isn't currently present?
    - EGreg 10y ago
      Ok but you mentioned someone making a 1% improvement in existing revenue. For THAT.
khazhou 10y ago
Spoken like an executive!
- austenallred 10y ago
  I wish
olalonde 10y ago
This sort of reasoning ignores the law of supply and demand.
- austenallred 10y ago
  The assumption here is that the person at hand has other offers (or other things they'd want to do). In the case in question, that's clearly true, so it doesn't ignore the law of supply and demand at all.
  - olalonde 10y ago
    Indeed, which is I was criticizing the justification given by parent. The guy received a high salary because his skill set was scarce and in demand. It had little to do with "value driven" (e.g. see anecdotes in this thread of other Google engineers who drove millions in revenue and probably didn't make millions a year).

M_Grey 10y ago

Is it? It's understandable why they'd want to claim that, and why a culture might exist of mutually rewarding "brilliant leadership" with "competitive packages", but... come on. What do you think the ratio of people who are actually, individually responsible for $100m in value, to the people receiving compensation as though they were, might really be?

austenallred 10y ago
I think there are very, very few people who are worth $100m, but I absolutely believe that there are those people, especially within a company like Google. This isn't the first time Google tried to keep an exec by paying them $50m+ (nor is it the second) http://www.businessinsider.com/neal-mohan-googles-100-million-man-2013-4 http://www.businessinsider.com/neal-mohan-googles-100-millio... http://fortune.com/2016/03/29/googles-pichai-received-100-million/ http://fortune.com/2016/03/29/googles-pichai-received-100-mi...
- M_Grey 10y ago
  I hear you, but I still wonder what kind of evidence I'd want to see laid out in front of me before parting with a cool $100 mil, and I somehow doubt that's how these things work.
  - maxerickson 10y ago
    I think the calculation is probably different when you are making "big bets" with other people's money.
    - deleted 10y ago
      [deleted]
- username223 10y ago
  > I think there are very, very few people who are worth $100m, I'm not saying you're wrong, but I'm highly skeptical that one person would be worth, say, $99m more than a very-well-paid engineer, or $50m more than someone too rich to care about money other than as a way of keeping score, in just a few years. Rockstar executives get crazy money even when they run companies into the ground (see Meyer, Marissa) or merely keep them afloat (Tillerson, Rex). I suspect rockstar engineers are getting a bit of the same treatment, which has little to do with differences in performance among those making more than a small multiple of average pay.
  - defen 10y ago
    The mistake you're making is in thinking there is some objective definition of "value" - as in, there is some all-seeing entity which knows everything and knows exactly what a person "should" be paid. I would argue that that's a fundamentally incorrect way of looking at it. You're "worth" whatever you can negotiate for (making baseline assumptions about not defrauding people). If you can convince someone to pay you 10 million dollars to mow his lawn, I think you deserve every penny.
  - toufka 10y ago
    After thinking about it a while, I think part of the numbers come from a time-based valuation. Apple's chief council is likely not the only lawyer who could 'do his job' for that price. But I need someone to do his job this afternoon, no, now. Who has all the relevant information in their head so they can give me an informed opinion based on the entire company's operations and positions about a $10B decision that must be made by the end of the day. Go find me that person. How much would you pay to have that person here and now today rather than tomorrow to guide whether the price should be $21B or $18B for the deal.
  - hn_throwaway_99 10y ago
    I think you may be missing the point with examples of execs who got paid a ton of money even for mediocre or poor performance. The reason they got paid so much is that decisions at that level are absolutely "billion dollar decisions", in that the performance of the executive, and the executive alone, can be the difference between a super successful company and a failure. That is one reason why execs are paid so much - going in to the deal boards are betting that their execs will be one of the successful ones, not one of the failing ones. The same is true for "rock star" engineers. I absolutely believe there are a few engineers who can make the difference between being wildly successful or being an also ran. To use a well known related example, consider Jony Ive. I believe that his unique design talents have been responsible for billions of dollars in value to Apple shareholders.
jgalt212 10y ago
Amen, brother. I guarantee you if some brilliant guy thinks he's worth $100MM and you refuse to pay it and he walks there will be a very long line of equally brilliant folks who will settle for $10MM.
- dangero 10y ago
  Google cannot afford to lose time. It's in a technology race. I'm not saying this guy was worth it, but it's not impossible to imagine how they make decisions like that. Time is much more valuable to them than money.
  - M_Grey 10y ago
    I'm not saying it applies here, but it's the core of many cons that you apply time pressure on the mark. "You can make all of this money, but only if you act NOW! Everyone else is doing it, they're smart and successful and YOU want to be smart and successful! I'm not asking for more than you can afford to spend, and I'm offering so much more in return! BUT ONLY IF YOU ACT NOW!"
  - jgalt212 10y ago
    What race are they losing? Google search/ads is a monopoly or duopoly. You don't need to pay execs $100MM to maintain this--just need to keep the DOJ off your back. The rest (self-driving cars, et al) is money losing window dressing.
  - srtjstjsj 10y ago
    When you pay people $100million for the grand accomplishment of sweet-talking the CEO, you get... Google+.

tehlike 10y ago

at the kind of scale, one engineer can drive that much value. Google's ads business is huge, and 1% improvement you can do (which happens all the time) could have outsized impact. It doesn't really have to be that complex of an improvement, either. PS: google employee

austenallred 10y ago
I don't doubt it. I can think of several small tweaks at companies I've worked at that have swung things $10m one way or another, and we're a tiny fraction of the size of Google. When you have millions (or billions) of customers, small changes mean a lot.
- tehlike 10y ago
  yup - that's unfortunately also a reason why comp is not a linear function of impact.
  - lovich 10y ago
    I'd like to think that the fact that companies just want to keep the money, and the supply of other engineers, is why the comp is not a linear function.
EGreg 10y ago
Please see https://qbix.com/blog https://qbix.com/blog Why doesn't Google do this?
- cowsandmilk 10y ago
  That relies on having a product that is already generating revenue, how do you apply that to R&D like autonomous cars where that revenue isn't currently present?
  - EGreg 10y ago
    Ok but you mentioned someone making a 1% improvement in existing revenue. For THAT.

khazhou 10y ago

Spoken like an executive!

austenallred 10y ago
I wish

olalonde 10y ago

This sort of reasoning ignores the law of supply and demand.

austenallred 10y ago
The assumption here is that the person at hand has other offers (or other things they'd want to do). In the case in question, that's clearly true, so it doesn't ignore the law of supply and demand at all.
- olalonde 10y ago
  Indeed, which is I was criticizing the justification given by parent. The guy received a high salary because his skill set was scarce and in demand. It had little to do with "value driven" (e.g. see anecdotes in this thread of other Google engineers who drove millions in revenue and probably didn't make millions a year).