Reading this, his compensation is the least amazing part. If this article is true, it should have been titled "A Story Of Competence". Does anyone have any doubt the guy is generating Google this money many times over? It's simple math. It has nothing to do with curing cancer, economical equality or anything else. He's something that's worth X and pays back many X.
I can understand why this comes as a shock to some; it may be difficult to accept that another person doing his 9-5 job can bring so much value to a company. I always suspected such value creators exist (Jobs would be one).
So good for him for delivering, and good for Google for acknowledging and compensating accordingly. And good for me too; I'm taking my first steps as an advertiser with Google and I'm really liking what I'm finding so far.
I think the compensation is the most amazing part. There are so many competent people out there generating many multiples of value for their employers that it's surprising he's not getting screwed like the rest. That is, that Google recognizes and compensates him for his competence is the "man bites dog" aspect of this story.
Is there reason to believe that successful executives are not like successful traders, in that they behave better than chance?
That is, if you make 10,000 people executives and make them make decisions by flipping coins, won't 100 of them be in the top 1% even if success is the result of successive chance outcomes?
People sometimes find it difficult to understand that some people are actually worth the astronomical figures they are paid. When we hear about the big pay day it's easy to focus on that number what not what was done to earn it.
I work for Google and don't think anyone alone can bring this amount of value alone, knowing well that every decision is taken very collectively. There are some many in this article that doesn't fit Google's work culture.
The important consideration are the alternatives. He may easily create that much value but are there other people (substitutes) that could create as much or nearly as much for far less than 100M?
I find it sort of odd that people, especially on HN, would resist the idea. Many founders have earned for themselves tens or hundreds of millions of dollars through their startups (either through revenue or acquisition). And we accept C-level execs to earn this kind of money without really questioning whether they are actually worth it.
This is a classic story of really good negotiation.
Getting the very serious offer from Twitter was the best thing to happen to Neal.
I can only imagine the negotiation with Google that he must of had. It probably went on the lines of something like this -
"Hey, I really love it here at Google. I am really excited with what we are working on and want to deliver it but this Twitter offer is just something that I can't ignore. I am looking at the financial future of my family and I would be doing them a disservice if I don't consider this offer seriously. Is there anything we can do to just make this offer go away."
Neal had the upper hand. Worst-case scenario for him would be that there would be no change. He would continue to work at Google. Next best case scenario would be that he would be working at another mega-tech company, and getting better compensated with potentially even greater upside.
Google was in a position of weakness in either case. If they did nothing and he left, it would amount to even more collateral damage as others would get the message that Google can't compete and Twitter would make even more offers to others.
By paying him out, they basically paid him the opportunity cost in real dollars that he may have had if he moved to Twitter.
In all of this, Neal's professionalism would have tipped the favor on his side.
Some people might be happier if more of the hundred millionaires walked out to pillage flailing competitors. It isn't obvious that VP retention is good for morale.
But it would be cool if Larry Page said "your old org, from intern to director, says you are the the grease in our money machine, we will always pay you more than any one else would offer, and we want you to find out how high we can reward you"
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.
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.
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.
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.
Wow. Definitely, an interesting reading. And a special guy, no question about it. On the other hand, the guy didn't cure cancer. Doesn't it give anyone pause to thin that the topic of conversation is 'ads'? You know, those little annoying things you would never click, and which get in the way of your normal life.
I mean we're talking about billions of dollars. So much human talent, skill, intelligence taken away from really important things... Just sad...
I'm not about to say that this is as noble as curing cancer- but then again, the skills aren't one to one. Generally the kinds of people who are able to think at such a high level strategically for a business, have very different ways of thinking from those who do hard science. Science is slow, arduous, and full of rigor in a way that would probably make Neal into a mediocre scientist at best. Things that Neal accomplishes at Google in a week, he wouldn't see movement on as a scientist in his lifetime. They require different sorts of people.
Not to mention- while he is getting paid a monstrous sum of money, think of how many people he is also enabling to have jobs, both at Google and the businesses that use their services. The direct effect is obviously very different, but I'd bet he does a lot of good for the world in his own way.
Ads are also the thing that enables really amazing things to exist. Regardless of your feelings about facebook, the community it has created has had drastic impacts on the world at large. Almost the entire knowledge of humanity is now in anyone's grasp with a simple click of a button (Google). That was only possible because Google was able to make money off of it through ads. How do you propose that the internet pay for its self without ads? The whole freedom of the internet is because they can make money off of ads.
Not everyone needs to cure cancer to do something great.
This guy facilitated the ads that support google's wide range of quality services given free to anyone anywhere in the world. Google maps alone has had a positive humanitarian impact to a great many people. It's not the stereotypical marketing exec in an advertising company that only makes adverts.
Find a way to cure cancer while serving ads and you'll be both rich and famous.
EDIT: This sounds snarkier than I meant it to, sorry. I agree that there are many things that I look at and I think "This is nuts!" - like how cheap products are that get mass produced in China. Someone gets oil from a deep sea well; refines it, turns it into plastic, ships it to a factory, who do stuff with it, put it in a box, put all those into other boxes, ship it, distribute it locally, someone takes all the little boxes out of the big boxes and puts them on display, and I can buy this for a couple of dollars.
Yes, it's weird that we spend millions on Barbie dolls, and not so much on cancer or malaria or HIV or hunger.
It's reasonably likely that a good chunk of the $100m will end up going to charity, which would go a lot further toward curing cancer or whatever the charity is focused on.
If you compare this with full professorship (academic tenure), that will cost the university about $4 million (assuming $60k/yr - probably $6-7 million if the university is upper echelon). So conservatively this is 10-15x what tenure is.
Neal Mohan sounds like the business equivalent of Jeff Dean [1]
Does anyone know if these types of $100M numbers are actually true? I think it makes a great headline but wouldn't everyone at senior ranks get packages like this making it unsustainable?
It does seem likely that some tricks were involved to arrive at a sensational number.
But if Google pays an average engineer on the order of $100,000 , this is 1000 times the average annual salary as a one time bonus.
That seems exceptional, certainly, but not completely insane.
On the flip side, it might keep a certain type of engineer for bolting for a startup. Even the most optimistic entrepreneur knows the odds of a $100 M payday are pretty much non-existent.
Google is a 258B market cap company (as per yesterday's closing price). They can afford to give hundreds of these packages, even if they diluted the stock, without moving the needle too much.
It's only paper, and Google is under the spotlight for anti-poaching collusion. This story makes them look like in-demand workers benefit from their policies rather than the worker just laboring away unaware that other companies have already agreed with Google not to try to hire him away.
How many people do you think are VP's at Google? A few hundred at most? $X million per year is normal for a big co VP. This isn't like a bank were every teller or saleman is called VP.
He is a One-percenter at the top of the Google pyramid.
Sounds like the kind of document that the distribution of would be tightly controlled. It was probably shown to select people, but not actually emailed to anyone. You get to see the slides, but you don't get a copy.
It makes sense ... the guy is running a multi-billion dollar new business line for Google that is their most meaningful business outside of search ads.
The article makes a point to say that he started with a job that paid a "humble" $60,000 per year in 1997. Based on my quick and dirty run on wolfram alpha, that is the equivalent to $120,000 per year today. Not so much of a humble beginning for a second job out of college.
That is the same salary I was being paid as my second job out of college at WebLogic in San Francisco in Dec 1996. It was a step down from the consulting company I had come from in Chicago but so much better!
Google's purchase of DoubleClick seems to be considered a huge success. I'm curious how the $750M purchase of AdMob is seen in the company. Does anybody have an insight or references?
I've always been curious what display advertising is and how it generates so much revenue for Google. Are there any good resources to learn more about what exactly goes on behind the scenes? Do those little ads on my gmail sidebar really create billions in wealth? Or is there some super secret illuminati-esque subliminal advertising going on?
It's distinguished from search-based advertising (e.g. adwords). It's basically just ordinary online advertising, and there are a great many different ad networks out there already. However, google's network has been gaining a huge amount of traction recently and took the top spot in marketshare within the last year or so, even pulling ahead of Facebook. In total these sorts of ads are worth around $2 billion a year in revenue for google but both the size of the market and google's share of it are growing at double digit rates so google's revenue from it is likely to double within the next few years.
I'm thinking either this story is entirely sensationalized, or Google are scared that this guy will take his roadmap and go execute it elsewhere. Like he has seen upcoming trends and Google know they have to be first to act on them. I wonder what they could be...
Did he hand in his resignation and was asked to reconsider? Did he tell them he wanted more money? Did they find out about the twitter offer from outside sources and arrange for the bump?
[+] [-] flyinglizard|13 years ago|reply
I can understand why this comes as a shock to some; it may be difficult to accept that another person doing his 9-5 job can bring so much value to a company. I always suspected such value creators exist (Jobs would be one).
So good for him for delivering, and good for Google for acknowledging and compensating accordingly. And good for me too; I'm taking my first steps as an advertiser with Google and I'm really liking what I'm finding so far.
[+] [-] rhizome|13 years ago|reply
[+] [-] dyno12345|13 years ago|reply
That is, if you make 10,000 people executives and make them make decisions by flipping coins, won't 100 of them be in the top 1% even if success is the result of successive chance outcomes?
[+] [-] dopamean|13 years ago|reply
[+] [-] theverse|13 years ago|reply
[+] [-] richcollins|13 years ago|reply
[+] [-] InclinedPlane|13 years ago|reply
[+] [-] LordHumungous|13 years ago|reply
[+] [-] avenger123|13 years ago|reply
Getting the very serious offer from Twitter was the best thing to happen to Neal.
I can only imagine the negotiation with Google that he must of had. It probably went on the lines of something like this -
"Hey, I really love it here at Google. I am really excited with what we are working on and want to deliver it but this Twitter offer is just something that I can't ignore. I am looking at the financial future of my family and I would be doing them a disservice if I don't consider this offer seriously. Is there anything we can do to just make this offer go away."
Neal had the upper hand. Worst-case scenario for him would be that there would be no change. He would continue to work at Google. Next best case scenario would be that he would be working at another mega-tech company, and getting better compensated with potentially even greater upside.
Google was in a position of weakness in either case. If they did nothing and he left, it would amount to even more collateral damage as others would get the message that Google can't compete and Twitter would make even more offers to others.
By paying him out, they basically paid him the opportunity cost in real dollars that he may have had if he moved to Twitter.
In all of this, Neal's professionalism would have tipped the favor on his side.
[+] [-] 777466|13 years ago|reply
[+] [-] Evbn|13 years ago|reply
But it would be cool if Larry Page said "your old org, from intern to director, says you are the the grease in our money machine, we will always pay you more than any one else would offer, and we want you to find out how high we can reward you"
[+] [-] simonsarris|13 years ago|reply
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
[+] [-] nikcub|13 years ago|reply
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.
[+] [-] rhizome|13 years ago|reply
[+] [-] Evbn|13 years ago|reply
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.
[+] [-] cridal|13 years ago|reply
I mean we're talking about billions of dollars. So much human talent, skill, intelligence taken away from really important things... Just sad...
[+] [-] quaunaut|13 years ago|reply
Not to mention- while he is getting paid a monstrous sum of money, think of how many people he is also enabling to have jobs, both at Google and the businesses that use their services. The direct effect is obviously very different, but I'd bet he does a lot of good for the world in his own way.
[+] [-] slyv|13 years ago|reply
Not everyone needs to cure cancer to do something great.
[+] [-] vacri|13 years ago|reply
[+] [-] DanBC|13 years ago|reply
EDIT: This sounds snarkier than I meant it to, sorry. I agree that there are many things that I look at and I think "This is nuts!" - like how cheap products are that get mass produced in China. Someone gets oil from a deep sea well; refines it, turns it into plastic, ships it to a factory, who do stuff with it, put it in a box, put all those into other boxes, ship it, distribute it locally, someone takes all the little boxes out of the big boxes and puts them on display, and I can buy this for a couple of dollars.
Yes, it's weird that we spend millions on Barbie dolls, and not so much on cancer or malaria or HIV or hunger.
[+] [-] Zakharov|13 years ago|reply
[+] [-] NelsonMinar|13 years ago|reply
[+] [-] wallflower|13 years ago|reply
If you compare this with full professorship (academic tenure), that will cost the university about $4 million (assuming $60k/yr - probably $6-7 million if the university is upper echelon). So conservatively this is 10-15x what tenure is.
Neal Mohan sounds like the business equivalent of Jeff Dean [1]
[1] http://research.google.com/people/jeff/
[+] [-] hyperbovine|13 years ago|reply
[+] [-] capred|13 years ago|reply
[+] [-] waterlesscloud|13 years ago|reply
But if Google pays an average engineer on the order of $100,000 , this is 1000 times the average annual salary as a one time bonus.
That seems exceptional, certainly, but not completely insane.
On the flip side, it might keep a certain type of engineer for bolting for a startup. Even the most optimistic entrepreneur knows the odds of a $100 M payday are pretty much non-existent.
[+] [-] niggler|13 years ago|reply
[+] [-] rhizome|13 years ago|reply
[+] [-] Evbn|13 years ago|reply
He is a One-percenter at the top of the Google pyramid.
[+] [-] rckrd|13 years ago|reply
In the rare chance that this is floating around the internet, does anyone know where it would be or more information on it?
[+] [-] patrickk|13 years ago|reply
[+] [-] yekko|13 years ago|reply
[+] [-] iamvictorious|13 years ago|reply
[+] [-] genericresponse|13 years ago|reply
[+] [-] waterlesscloud|13 years ago|reply
BLS says it's more like $86k
http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=60000&year1...
[+] [-] spullara|13 years ago|reply
[+] [-] unknown|13 years ago|reply
[deleted]
[+] [-] vannevar|13 years ago|reply
Some say 'fund', others might say 'destroy'. What's in a word?
[+] [-] SeoxyS|13 years ago|reply
[+] [-] whnevan|13 years ago|reply
Anyone care to explain how the management was neglectful? Serious question.
[+] [-] SKy33|13 years ago|reply
Sundar Pichai was also offered $50M. As things have settled down, I doubt if this would happen again, at least anytime soon.
[+] [-] dyno12345|13 years ago|reply
[+] [-] wilfra|13 years ago|reply
[+] [-] dkwak|13 years ago|reply
[+] [-] InclinedPlane|13 years ago|reply
It's distinguished from search-based advertising (e.g. adwords). It's basically just ordinary online advertising, and there are a great many different ad networks out there already. However, google's network has been gaining a huge amount of traction recently and took the top spot in marketshare within the last year or so, even pulling ahead of Facebook. In total these sorts of ads are worth around $2 billion a year in revenue for google but both the size of the market and google's share of it are growing at double digit rates so google's revenue from it is likely to double within the next few years.
[+] [-] Tycho|13 years ago|reply
[+] [-] namank|13 years ago|reply
Did he hand in his resignation and was asked to reconsider? Did he tell them he wanted more money? Did they find out about the twitter offer from outside sources and arrange for the bump?
How did the semantics play out?!
[+] [-] erhanerdogan|13 years ago|reply