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Google offers engineer $3.5M to not leave for Facebook
- DrStalker 16y agoWhat a rip off. I'll not work for Facebook for only $2.5M. :-)
- electromagnetic 16y agoMy problem if a company paid me $3.5 million not to leave for its competition would be that I'd quit the day the money was in my bank account anyway. I wouldn't go work for the competition, but I'd be starting my own company. I could do a hell of a lot with $3.5M, and probably make more than I ever would being an engineer for Google.
- vibhavs 16y agoI don't think the money just shows up in your bank account one day. From the TC article: "this means Google is handing over stock worth $3.5 million based on its value today, and that stock will vest over time."
- donaldc 16y agoThe $3.5 million is in restricted stock that presumably vests over four years. If you left the day after accepting the counter-offer, you'd get nothing.
- CamperBob 16y agoUnless I factored it.
- tlack 16y agoAnyone inside Google care to anonymously comment how morale is over there these days? Why so many people jumping ship? Is it purely about money, or something else?
- Uhhrrr 16y agoI can't comment on Google goings-on, but sometimes jumping ship is simply explained by looking at stock option vesting dates. Google only had 6,000 employees at the beginning of 2006.
- hartror 16y agoIf I just had a 10% pay rise in this economic climate I'd be pretty darn happy right now . . how long it will last of course . . .
- dstein 16y agoBut remember, it's a 10% raise immediately after the company got caught with illegal no-poaching agreements with their competitors.
- yanw 16y agoI doubt HP and Adobe were poaching Google employees, the "clod-calling" agreement was most likely to everyone else's benefit, a Google employee would only leave for IPO money or to start their own thing.
- PakG1 16y agoWhy not? Especially HP, they're going heavy into the cloud infrastructure space. A lot of Google's scale expertise would probably come in handy. And Adobe being a software company... well, good software companies always want good programmers. Clearly, Google has those.
- nikcub 16y agoThe 10% pay rise was offset by a $17 drop in the stock. Most employees own stock, so they got an extra 10% taxed as income at the cost of lower stock value which is taxed as gains Something tells me Google didn't think it through
- Mahh 16y agoTechcrunch really is eating up these Google and Facebook stories. I mean they're kind of interesting, but not interesting in the way that stories on innovation are interesting. I kind of want to see the perspective of lower level google employees. They wouldn't get offers like this, but they would all have some thought about the future of their company
- tlack 16y agoThey're interesting to me because of all the technologies that huge platforms like Google and Facebook spawn. For instance when Facebook launched the Places API, there were 3-4 Places apps out there within a week or two. For that reason the long term growth (or death) of these giants is interesting to me even if I'm not able to/don't desire to work there. Then again my startup is all about Facebook so maybe I'm just a nerd for it.
- prawn 16y agoI know I'm stating the obvious, but Google, Facebook and Apple stories like this get eaten up by mainstream news. There are more readers of mainstream news than there are entrepreneurial types like us on HN.
- jonknee 16y ago"Part of that may be that Facebook is quietly telling people, never in writing, that there’s no reason their stock won’t hit $100 billion in total valuation over the next couple of years. No guarantees, yadda yadda, but hey if you get 1/10 of 1%, that’s $100 million in stock. Now it’s a party." Shady shady. Not only are there plenty of good reasons for Facebook not hitting $100B market cap (that would be 100x revenue, making the P/E amazingly high), but they also aren't handing out .001% of stock to many new hires. There's just not that much stock available, there are already more than 1,000 employees and a lot of the shares are spoken for (Zuck's got ~30%, the VCs have another huge chunk, etc).
- tafle 16y ago"that would be 100x revenue" They are already expected to make well over 1B this year. Why would that be the same a few years from now?
- ams6110 16y agos/Facebook/MySpace/ and ask again
- tafle 16y agoThe point is that, in a scenario where their market cap reached 100B, we would not expect their revenue to remain stagnant between now and then.
- mikeryan 16y agoAt a point where their market cap reached 100B we'd expect their profits to be between 2-3B a year. (P/E between 33-50) Considering that's 2-3x their current revenues can you understand the skepticism?
- andreyf 16y agoThe people running Facebook clearly know their ass from their face a little better than those running MySpace.
- robryan 16y agoAs long as let some people go it's not to bad, if employees of similar importance to the guy they have given the stock to knew all it took was an offer for a big jump they would all do it. Letting some people take the offer though puts some doubt into the minds, are they really prepared to jump ship if Google calls their bluff.
- VladRussian 16y agoit finally took Google, Facebook and 3.5M together to make a story that HN crowd would be interested more than being bullied in school :)
- sliverstorm 16y agoGoogle is starting to look desperate.
- redorb 16y agoIf Google as a company is starting to look desperate; I want my company to look desperate.
- Timothee 16y agoAn interesting part of this story is that Google knows full well who that person is (unless they've been giving out $3.5M to a lot of people...), and leaking that story to TechCrunch makes Google look desperate and less interesting than Facebook. Especially knowing that they just fired the person that leaked a positive (though confidential) memo that was addressed to 23,000 people. (that is, not super private to begin with) It feels a bit like biting the hand that just fed you a huge amount of money.
- mrduncan 16y agoI'm sure that person (again, assuming that there was only one) wasn't the only one to know about the money. It's probably more likely that a manager, someone in HR, etc leaked the info.
- Timothee 16y agoYou're right, of course. Overall, it just feels that the person who did leak this story would have more reasons to be fired that the one about the memo... Especially if it's someone in HR who are clearly not supposed to divulge any information like that.
- blantonl 16y agoIf I was that employee, I would think I've now reached the most awkward point of my career. And the most dangerous.
- bd_at_rivenhill 16y agoYeah, but you just scored $3.5 million. I think most people can deal with a bit of awkwardness and danger for that kind of cash.
- palish 16y agoEspecially knowing that they just fired the person that leaked a positive (though confidential) memo that was addressed to 23,000 people. Really? Wow. I missed that --- link?
- ojbyrne 16y agoOne wonders if it's Steve Yegge.
- absconditus 16y agoWhy? Is his work that valuable to the company?
- streblo 16y agoHis departure would certainly be notable, at least to this community.
- pchristensen 16y agoDespite the number of people interested in him (myself included), his desire to be out of the public Internet eye has made him less notable. Plus I get the feeling he doesn't plan on leaving Seattle.
- ojbyrne 16y agoHis notability is probably useful over and above his engineering ability.
- strlen 16y agoNo, else the story wouldn't fit on a single page
- omouse 16y agoHe's a computer scientist or software developer, not an engineer.
- deleted 16y ago[deleted]
- mrshoe 16y agoSounds like a good way for Google to guarantee that every one of their engineers will apply for a job at Facebook, just for the chance of getting an offer.
- qq66 16y agoAnd those who don't, might be able to bluff offers too.
- noonespecial 16y agoAnd at the same time, test with absolute certainty your worth to Google. Your offer might turn out to be.. ummm somewhat less than millions. The engineer who wanted to leave had a combination of skill and institutional knowledge that Google decided would cost more than $3.5M to replace. How many engineers could possibly be in this position at Google?
- dennisgorelik 16y ago"However effective these counter offers are, they sure aren’t good for morale internally at Google. Unless, of course, you’re one of the ones winning the lottery." If you got sweet counter offer -- why wouldn't you just shut up so the morale would not be hurt?
- bd_at_rivenhill 16y agoFor the same reason that criminals are often caught after they bragged about crimes to their associates (who then give them up in order to get a deal for themselves if they are caught): because people just have to run their mouths sometimes.
- Evgeny 16y agoHow come no one asked yet, was the person who leaked this information fired or not?
- bgray 16y agoThis is the market at it's best. I've heard from many times that Google's salaries aren't competitive but rely on the "you will change the world" mentality. Google pulls in the talent and Facebook gets to cherry pick.
- DevX101 16y agoGoldman sach's traders routinely get money in this order of magnitude for creating a net value less than top engineers at Google.
- mdda 16y agoThat's a pretty bold statement : The Goldman trader's NPV will be pretty solid in cash terms (given that Goldman's risk group actually does a decent job, and values things accurately). The NPV created by a Google engineer is more difficult to judge - depending on how far into the future it is, and what risk/reward is embedded in Google's stock valuation. I'm not arguing that either one is over or under-paid. Just that it's not apples-to-apples.
- pbhjpbhj 16y ago>traders routinely get money in this order of magnitude for creating a net value less than top engineers at Google But traders don't create value they leech it. Yes they create price changes that result in profit, but that's a quirk of the financial system. Yes, fluidity, yadda-yadda, I don't buy that crap. Engineers, if they're working effectively are creating value. (Downvoters, please also comment).
- dnsworks 16y agoAre people really worth this much money? I can't help but think "$3.5m gets me 15 really good developers for a year, and a swimming pool filled with chocolate pudding, just for fun."
- PakG1 16y agoIf the guy is really top 1% in the world, why not? How much do the top 1% athletes, musicians, etc, make? An argument can probably be made for a top 1% coder.
- arghnoname 16y agoThe top 1% athlete? On average probably about $0. There are probably a few hundred thousand high school football players. There are only 32 NFL teams. Even among those few that make it (probably much smaller than 1% I'd wager), few are superstars. Taking into account chance of injury, short career, and brain damage (in this case), the ~ $700K NFL salary isn't so great. And musicians? Their situation is probably worse! The truth is talent is pretty bountiful. Finding out that no matter what hot shit you were in high school, there's an army of kids out there ten times smarter is a veritable right of passage. Maybe this guy is the top .01%, but I think the value you can extract from the relative brilliance of one member is a case of diminishing returns. Is he doing, 100% of the time, work that an actual 1% guy or several of them couldn't do?
- axod 16y ago1 fantastic developer would often be worth '15 really good developers'.
- dnsworks 16y agoI don't buy it, not from a company as large as Google who has more institutionalized about scaling and building web properties. Just because it sounds really cool that Google throws gobs of money at engineers doesn't necessarily make it the best approach. It sounds like a fear-driven tactic, and if they're that worried about keeping talent, they're probably not going to put that good talent to use anyways.
- birken 16y agoI like how this article is suggesting new hires at Facebook get .1% of the company, or over 25 million dollars worth of stock at the current valuation. I have a feeling if we actually knew the truth, and not this sensationalism, the whole situation would probably end up being pretty logical. Google is actually a pretty smart company.
- firebones 16y agoI'd work this backwards. Consider a high-profile late-comer to Google who might have an existing equity position not comparable to peers who were there for the IPO, or peers who had hired in early (e.g., his grants were at pre-bailout highs and only recently recovered). Accepting a $3.5 million counter-offer means that the immediate "sure thing" is greater than or equal to the expected value of Facebook's offer when the risk of Facebook falling short is taken into account. Say this engineer thought there was only a 50% chance of Facebook actually hitting their "quietly told" market cap. That would imply the Facebook offer was something in the $5-$7 million range, or 1/15000th to 1/20000th of the outstanding shares. For recruiting a big name, this is much more plausible amount to offer than the 1/10 of 1% in the story. If the story is true, then I'd bet that the engineer is someone who came to Google late (or at the wrong time), probably is pretty comfortable with his standing at Google is someone fairly prominent, and is more comfortable taking a stable, sure thing than taking a risk on a situation as early in the company life-cycle as Facebook is. (And it wouldn't surprise me to see this engineer leave for Facebook 5 years from now if and when Facebook becomes a more mature company and more of a sure thing.)
- dbrannan 16y agoI remember having a conversation with the athletic director @ BYU in my younger years. I naively asked why the football team had 92 full scholarships when only a fraction of that was required to field a team. He told me flat out, "because those 2nd & 3rd string players might make something of themselves if they played for another team." So, there you go. A rock-star programmer can be a dangerous thing in the hands of the competition.
- neilk 16y agoI don't see how this could be good strategy. 1) Can BYU seriously hire enough of the football talent out there as to reduce the chances that other teams will succeed? 2) Is BYU so prized a destination among football players that they would be willing to sit on the sidelines at BYU rather than get more time playing, at another team? Consider that they also want to attract the attention of NFL scouts. Google doesn't have any of these problems -- for many candidates, it is the NFL, and there's no real limit on how many people can "play".
- dbrannan 16y ago1. Elite players within the state of Utah (U of U being their main rivalry), yes. 2. Nobody wants to sit on the sidelines, but if you can work your way up to first string at a top 20 University then yes, the scouts are more likely to take notice. Why do you think the NFL pays millions and millions of dollars recruiting the best of the best? It's because talent at that level is rare, hard to find, and even harder to hold on to. In my experience, a rock star programmer can be worth more to an organization than 100 of your common CS grads.
- CamperBob 16y agoThis is basically the whole raison d'etre of Microsoft Research.
- jadence 16y agoI'm an avid college football fan and the BYU athletic director's response doesn't seem right. Roster depth is very important to a team for various reasons such as having players who can step in for injured players (important given the nature of football), allowing players to learn the system/schemes before playing (despite what many think of football it is complex and being able to "reload" rather than "rebuild" is key to the perennial powerhouses), giving players time to develop and grow before seeing game time (most are a mere 18 years old when starting college), being able to field scout teams for the starters to practice against, etc. USC football is currently facing sanctions and lost 10 football scholarships per year for three years. Read any sports analyses on the sanctions and they'll tell you that the scholarship loss hurts USC not because so much because top recruits will be making something of themselves elsewhere but because it hurts USC's roster depth.
- ajays 16y agoFolks, from what I hear, "Staff Engineer" is a top-level position; it's not your garden-variety engineer on staff. These are people who have risen to a high position in the company as individual contributors, eschewing the management path.
- EugeneG 16y agoThis is a nice case study that demonstrates an answer to the question of "Why do those evil Wall Street bankers make so much money?" Competition for skilled labor produces tremendous salaries.
- neilk 16y agoThe only way this story makes sense to me is if the engineer is one of the core contributors to Google Me, or some other strategically important new initiative. Those teams are small enough that every engineer counts, and a defection could even delay launch. Facebook would be interested in sabotaging that, but Google would pay even more to defend it.
- herdrick 16y agoWho knows if this is true, or what the full story is, but in general I think this kind of tactic is poisonous to a company. Please read this: http://news.ycombinator.com/item?id=1629201 http://news.ycombinator.com/item?id=1629201 (I just re-read that. Such an excellent post.)
- nivertech 16y agoThis is ridiculous. Much better strategy to attack Facebook, would be to spin off startups for talented engineers. Give this $3.5M to Google Ventures, which will invest it into spin-off. The engineers still work for Google with much better upside (comparing to Facebook).
- lee 16y agoIt seems to me that this story has a bit of sensationalism in it? It doesn't mention the engineer's salary. At that kind of offer, I'm going to assume he's a super-star performer. So his salary is probably on the far right of the bell-curve. Also, how long is the vesting period? 5 years? 10 years? So that's a bonus of 350k to 700k per year? What if he was already making 350k a year? What if he was making 500k? If so, then 3.5M isn't that outrageous.
- random42 16y agoif you get 1/10 of 1%, that’s $100 million in stock. Now it’s a party I dont get the maths here. Given that facebook already has 3000+ employees, I am not sure they can give everyone 0.1% stocks and given how 100 Billion evaluation is an atrocious claim, numbers dont add up to me.
- martincmartin 16y agoCan someone explain why Pre IPO stock would be worth so much? Either something is wildly inefficient, or the employees are getting duped. If X shares are expected to be worth $1m after IPO, Facebook could offer potential employees X/2 shares, which is still a $500k signing bonus, and use the other shares for something else.
- ahi 16y agoIt's a risk/reward calculation. There is a small possibility of pre-IPO stock being worth fuck you money. Google can't even off the possibility of fuck you money, but they can offer decent money (although anecdotal evidence says they underpay) with low risk. Unfortunately for Google, many of their employees have risk/reward profiles closer to Facebook than Google. Random numbers: Facebook: Shares with a 1% chance of being worth $10m Google: Guaranteed $100,000. Same expected value, different tolerances for risk.
- chopsueyar 16y agoI find it hard to believe that a bunch of post-IPO facebook millionaires ($100mill+) would stick around and maintain/work on Facebook afterwards.