Google paid employee Neal Mohan $100 million to stay with the company instead of accepting a competing job offer with Twitter.
About six months ago Google made headlines for offering to pay an employee (an engineer) $3.5M to stay with the company instead of defecting to Facebook. He didn’t take the deal, but he apparently sparked a new trend in corporate tech culture.
TechCrunch‘s Michael Arrington reported yesterday that Google recently gave Neal Mohan, a high-level employee on the product side, $100 million stock offering as incentive to stay with the company instead accepting an offer as product head at Twitter. In a separate deal, Google also offered employee Sundar Pichai $50 million in stock to turn down the same job at Twitter and stay with Google instead.
Both Mohan and Pichai took the deals. This amounts to over $150 million that Google has offered or paid out to retain just three employees over the last year. Which of course reflects the daunting amount of money Google has, and how much money is at stake in maintaining its vaunted mantle in the digital world. To put this in perspective: the amount Google spends in research and development budget each year is twice the entire gross revenue Facebook earns in a year. And Facebook’s revenue far outstrips Twitter’s.
Of course, this creates a conundrum for Google: by rewarding potential defectors with huge payouts, they’re creating one hell of an incentive for employees to seek job offers elsewhere. As TechCrunch eloquently put it: “If you’re a Google employee and you aren’t out interviewing at Facebook, Twitter or Zynga you are a moron.”
But there’s even more to it: Google proactively made these retention offers to Mohan and Pichai before Twitter had even disclosed its compensation offers to the candidates it was seeking to hire. According to TechCrunch, this would suggest that there is a high-level mole inside the Twitter operation feeding information to Google before the job offers are even officially extended to Google employees. Either that or Google is engaging in some seriously advanced technological corporate espionage. It seems unlikely, but hey, this is the company that actually developed a self-driving car—anything’s possible.
Interestingly, Google doesn’t seem to have used this prowess to poach top talent from social media companies. Judging from “+1,” the company’s latest attempt to engage in the social internet, Google needs some new social talent and they need it fast. Every product Google rolls out in the social space is counter-intuitive and ends up failing: from Orkut to Google Buzz to this latest “+1″ idea, Google has become a graveyard of aborted social products.
Twitter is reportedly irate over Google’s preemptive $150 million retention fees to keep its two employees. But if Google is serious about moving into social media, Twitter better take a couple deep breaths—their anger now is surely nothing compared to how indignant they’ll feel when Google starts plucking off top engineers one by one.