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I find this fascinating. It almost smacks of game theory. A land-mined game of incentives, anyway. Think of the sheer amount of considerations that go into a d

I find this fascinating. It almost smacks of game theory. A land-mined game of incentives, anyway. Think of the sheer amount of considerations that go into a decision like this. Higher-ups at Google must acknowledge: * Offering someone an enormous sum only after someone else has made you an offer can be off-putting. Consider the many articles written about never making counter offers[1], or never accepting them. * Along the same lines, if you're not offered a large enough sum to stay, you might take it as an insult. "They're only offering me this much money after I've considered leaving?" Google certainly made sure the sum was large enough, by any count. * Offering an enormous sum to one person may tempt others to fish out offers from other companies. Others may feel like they're never going to get a raise unless they are courting or being courted actively. * Google's decision-makers (or check-writers) have to be careful about the number picked. They want to send a message to the person, and to other companies, and to the market. But they probably don't want to end up paying $100m for every high value employee. Luckily for Google, if its gonna be a cash arms-race against other companies, there are few that can do serious battle with them. * Speaking of high value employees, while you might get person A to stay, you make make resentful group B. After all, there's already a comment here: "It's only a matter of time before us little developers get's similar packages!" It's not a stretch for anyone to sympathize with that view. ~~~ And then, at the end of all that, people in a room pursed their lips together and quietly nodded while somebody pulled out the (metaphorical) checkbook. This guy is staying, it's going to be this much money, and we're going to make it purposefully public knowledge. Signals everywhere. It seems to be a dangerous game. Others may (as a default) suddenly feel unappreciated since Google hasn't made them an offer to keep being a Googler, and perhaps hasn't approached them with any considerable raise in some time. 100 million ensures that you keep a single employee, but how many do you alienate at the same time? Hard to blame Google's decision, I'm sure they gave it much more thought than I have. I wish I could know what they're thinking, it's just so fascinating what goes into this. [1] https://news.ycombinator.com/item?id=3549384 https://news.ycombinator.com/item?id=3549384

rhizome 14y ago
Based on a virtual napkin math based on what's in the story and GOOG's current stock price, I'm speculating the entire deal was simply "200,000 options." I'm sure he got a promotion/raise out of it as well.
- RockyMcNuts 14y ago
  vesting over... 7-10 years? $10m a year for a guy running a $7b business.
  - rayiner 14y ago
    That's not out of line with what F500 CEOs get paid. Heck, Jamie Dimon's peak comp was double that and JPM is a $100 billion/year organization.
    - RockyMcNuts 14y ago
      $7b revenue will put you in the 300s on the Fortune 500. Since the display ads is one of Google's high margin cash cows, would guess quite a bit higher on the list in profits. Google has about 1/2 the earnings of JPM, about 1/3 the book value, but a larger market cap than JPM, and let's just say there's some wiggle room in what JPM reports, loan loss reserves, 'debt valuation adjustment', non-marked to market 'whale' losses, etc. Anyway, as a shareholder I have no problem at all with that kind of pay package if it's for a legitimate superstar who could otherwise run a competitor, it's reasonably tied to performance, not guaranteed if he pulls a <name a disaster/CEO scandal>. If he's adding 0.5% of earnings growth compared to the next best candidate it's a bargain.
      - rayiner 14y ago
        Article says that Goole gets 32% of that $7 billion, which is not out of line with JPM's profits on its revenue. Yeah, Google has a lot more growth potential, but on the flip side, I'd imagine Mohan isn't in the line of fire as much as the CEO of a Wall Street bank... Point is that he's not clearly getting low-balled at that number.
        RockyMcNuts 14y ago
        very true. and if he's a legit key man and it's reasonably tied to performance, not irrational either, to match a Sheryl Sandberg type offer. $2.2b in profit will put you in the 90s on the Fortune 500. Google is 16th in net profit margin at 25.7, JPM 49th at 17.1 [1]. the saying is, earnings are an opinion, cash is fact.* JPM's earnings are more of an opinion than most. [1] http://money.cnn.com/magazines/fortune/fortune500/2012/performers/companies/profits/revenues.html http://money.cnn.com/magazines/fortune/fortune500/2012/perfo... *although cash can be generated from crazy contingent liabilities and derivatives, eg AIG.
Evbn 14y ago
Kind of a long way of describing that big company big wigs get paid a lot of money, and it isn't really a big issue because no worker bee is as irreplaceable. He knows a lot of similarly well placed people and knows a lot of Google's business which competitors would be interested to learn about (nothing informal on paper of course), and like a tin pot dictatorship, stability is better than churn, regardless of whether the stable leaders are amazingly good or not.
- dopamean 14y ago
  > big company big wigs I think Mohan is a little more than just another "big wig." Google probably should have given him an incentives package similar to $100 million a long time ago.
  - rhizome 14y ago
    Said another way, they waited until the last minute.
nikcub 14y ago
Google is safe offering him $100M without offending the other employees, because the other employees at that level at Google already earn that much, if not more. Giving him $100M was more of a correction because he arrived at the company later than the other equiv execs. Most of the top tiers of employees at Google, which is where he would be, are worth hundreds or millions and more through vested stock, new options, bonuses, etc.
- bjourne 14y ago
  I find that very hard to believe. I'm ok with the talk about hackers being 10x more productive than regular developers. But a $100m bonus would mean that guy is about 1000 times more valuable than the average. It defies common sense in every way. And it's not just because I'm jealous and resentful I'm thinking that, no ones time is that valuable.
  - InclinedPlane 14y ago
    Why? Seems perfectly sensible to me. Are you telling me that there aren't developers out there who have thousands or even millions of times greater impact than an average coder? Some people write code that impacts literally millions of people (or even billions), code that generates literally billions or even trillions of dollars in value. This isn't about productivity, it's about impact. Google started out as a very small company and yet had many cornerstones of their core technology stack laid early. And the technology of pagerank, treating data centers as giant computers, massively automating IT operations, etc. is what allowed the company to dominate search and is a key factor behind their multi-billion dollar annual revenues of today. The people that built that technology are easily millions of times more valuable than the average coder in terms of their contributions to the world.
    - rtpg 14y ago
      >Are you telling me that there aren't developers out there who have thousands or even millions of times greater impact than an average coder? “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” Slightly off-topic, but your statement is the programmer's equivalent to that. We all want to be the developer that is a million of times more important (and end up making huge sums of money/having a worldwide impact/whatever). This argument appeals to the ego of a lot of people here I think. Though maybe I'm just projecting.

rhizome 14y ago

Based on a virtual napkin math based on what's in the story and GOOG's current stock price, I'm speculating the entire deal was simply "200,000 options." I'm sure he got a promotion/raise out of it as well.

RockyMcNuts 14y ago
vesting over... 7-10 years? $10m a year for a guy running a $7b business.
- rayiner 14y ago
  That's not out of line with what F500 CEOs get paid. Heck, Jamie Dimon's peak comp was double that and JPM is a $100 billion/year organization.
  - RockyMcNuts 14y ago
    $7b revenue will put you in the 300s on the Fortune 500. Since the display ads is one of Google's high margin cash cows, would guess quite a bit higher on the list in profits. Google has about 1/2 the earnings of JPM, about 1/3 the book value, but a larger market cap than JPM, and let's just say there's some wiggle room in what JPM reports, loan loss reserves, 'debt valuation adjustment', non-marked to market 'whale' losses, etc. Anyway, as a shareholder I have no problem at all with that kind of pay package if it's for a legitimate superstar who could otherwise run a competitor, it's reasonably tied to performance, not guaranteed if he pulls a <name a disaster/CEO scandal>. If he's adding 0.5% of earnings growth compared to the next best candidate it's a bargain.
    - rayiner 14y ago
      Article says that Goole gets 32% of that $7 billion, which is not out of line with JPM's profits on its revenue. Yeah, Google has a lot more growth potential, but on the flip side, I'd imagine Mohan isn't in the line of fire as much as the CEO of a Wall Street bank... Point is that he's not clearly getting low-balled at that number.
      - RockyMcNuts 14y ago
        very true. and if he's a legit key man and it's reasonably tied to performance, not irrational either, to match a Sheryl Sandberg type offer. $2.2b in profit will put you in the 90s on the Fortune 500. Google is 16th in net profit margin at 25.7, JPM 49th at 17.1 [1]. the saying is, earnings are an opinion, cash is fact.* JPM's earnings are more of an opinion than most. [1] http://money.cnn.com/magazines/fortune/fortune500/2012/performers/companies/profits/revenues.html http://money.cnn.com/magazines/fortune/fortune500/2012/perfo... *although cash can be generated from crazy contingent liabilities and derivatives, eg AIG.

Evbn 14y ago

Kind of a long way of describing that big company big wigs get paid a lot of money, and it isn't really a big issue because no worker bee is as irreplaceable. He knows a lot of similarly well placed people and knows a lot of Google's business which competitors would be interested to learn about (nothing informal on paper of course), and like a tin pot dictatorship, stability is better than churn, regardless of whether the stable leaders are amazingly good or not.

dopamean 14y ago
> big company big wigs I think Mohan is a little more than just another "big wig." Google probably should have given him an incentives package similar to $100 million a long time ago.
- rhizome 14y ago
  Said another way, they waited until the last minute.

nikcub 14y ago

Google is safe offering him $100M without offending the other employees, because the other employees at that level at Google already earn that much, if not more. Giving him $100M was more of a correction because he arrived at the company later than the other equiv execs. Most of the top tiers of employees at Google, which is where he would be, are worth hundreds or millions and more through vested stock, new options, bonuses, etc.

bjourne 14y ago
I find that very hard to believe. I'm ok with the talk about hackers being 10x more productive than regular developers. But a $100m bonus would mean that guy is about 1000 times more valuable than the average. It defies common sense in every way. And it's not just because I'm jealous and resentful I'm thinking that, no ones time is that valuable.
- InclinedPlane 14y ago
  Why? Seems perfectly sensible to me. Are you telling me that there aren't developers out there who have thousands or even millions of times greater impact than an average coder? Some people write code that impacts literally millions of people (or even billions), code that generates literally billions or even trillions of dollars in value. This isn't about productivity, it's about impact. Google started out as a very small company and yet had many cornerstones of their core technology stack laid early. And the technology of pagerank, treating data centers as giant computers, massively automating IT operations, etc. is what allowed the company to dominate search and is a key factor behind their multi-billion dollar annual revenues of today. The people that built that technology are easily millions of times more valuable than the average coder in terms of their contributions to the world.
  - rtpg 14y ago
    >Are you telling me that there aren't developers out there who have thousands or even millions of times greater impact than an average coder? “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” Slightly off-topic, but your statement is the programmer's equivalent to that. We all want to be the developer that is a million of times more important (and end up making huge sums of money/having a worldwide impact/whatever). This argument appeals to the ego of a lot of people here I think. Though maybe I'm just projecting.