Big Tranches of GOOG Options Vest- New ERs on the Way

[haha]

http://seattletimes.nwsource.com/html/businesstechnology/2003663044_googledrain12.html

Ha

 

[al_bundy]

MS still has quite a few of its original employees. i think a lot left after the stock price collapsed a few years back

 

[wabmester]

MS gave up on options a while ago. They simply give their stock away now. Their employees are doing fine. (I posted average salaries of IT works in King County in another thread.)

We don't seem to have many tech stock option millionaires hang out here. I know a bunch of them, and very few retire, but a lot of them do make career changes or at least job changes once they cash out.

 

[Nords]

I'm trying to work up some sympathy for Google's corporate predicament.

Oooh, wait, here it comes-- ah, nope. Never mind.

Maybe instead of working so hard to keep the early employees, who seem more than adequately compensated for time served, Google should be more focused on what it'll take to keep the current employees?

 

[DangerMouse]

Nords I wouldn't bother giving any sympathy for the current employees. Can't rememember which one it was of the financial mags that recently ran the article on the best companies to work for, but Google is number 1 by far. The benefits they offer their staff are totally outrageous, think they are 6 free cafeterias, take you dogs to work, shuttles to the office etc. etc. Most other companies can't afford to compete with what GOOG do.

 

[retireandbike]

We don't seem to have many tech stock option millionaires hang out here. I know a bunch of them, and very few retire, but a lot of them do make career changes or at least job changes once they cash out.

I'm sure they exist. I'm one. In fact, joined GOOG to help them deal with some issues on the way to the IPO. Still working away, because it's still mostly a fun place (what other place gives me nearly unlimited resources as a mere peon?). I might hang up my hat in a year or so (after vesting everything), and ER. There's been a number of ERs already (the ones who've had hobbies outside work were the first to ER --- others for whom the company is their first job are unlikely to do so until they discover something they prefer doing to the work --- and are likely to become serial entrepreneurs).

At least a few old-timers have gone into full time philanthropy. And of course, there exists an exclusive mailing list devote to financial planning for the ex-employees, which probably explains why most of them are not here. When you're worth $10s of millions (not me!!), conventional concerns about SWR don't apply.

Now there are a few sad cases (not financially, proving that money can't make you happy or a good person)... maybe some day I'll talk about them.

 

[NinjaPigeon]

Nords I wouldn't bother giving any sympathy for the current employees. Can't rememember which one it was of the financial mags that recently ran the article on the best companies to work for, but Google is number 1 by far. The benefits they offer their staff are totally outrageous, think they are 6 free cafeterias, take you dogs to work, shuttles to the office etc. etc. Most other companies can't afford to compete with what GOOG do.

Why do people fall for this? I remember the dot com and the companies that offered this. The reason they offer it is because if they are doing your laundry and feeding you, you won't need to go home. Guess what they suggest you do instead? WORK!

No thanks. I'll take my "normal" benefits package and go home at the end of the day. I work to live, not the other way around.

 

[Dawg52]

take you dogs to work. Most other companies can't afford to compete with what GOOG do.

This is one item my old company could compete with. We had one guy actually bring his dog to work and management never said a word. All our employees couldn't figure it out, including me. One of the many strange things that baffaled me about our management.

 

[retireandbike]

Why do people fall for this? I remember the dot com and the companies that offered this. The reason they offer it is because if they are doing your laundry and feeding you, you won't need to go home. Guess what they suggest you do instead? WORK!

I don't think people work because they get bribed by food (or free laundry). I can tell you that the food is extremely good. 4 star restaurant quality at worst, and better than any restaurant food at best. I think people work hard because companies like Google actively select employees for whom working is fun, not a burden. These are the kinds of people who write code full time at work, come home, and write code some more for fun. For people like that, it's not work. That's why you don't see that many ER types in high tech. The kind of people attracted to it, even if the ER'd would still "work" for fun. The free food simply enables you to not have to deal with distractions you'd rather not have (like having cash in your wallet, arguing about where to go for food, driving to a restaurant, etc.).

 

[wabmester]

I think people work hard because companies like Google actively select employees for whom working is fun, not a burden.

Hey, R&B, welcome to the forum! I've worked with some of the guys at GOOG before, and they are GOOD. Some of those guys have been coding since they were 8 years old.

But having a ton of money will probably change them. They will waste a lot of time calculating their net worth each day. Then they will realize that they never have to do any of the grunt work, and they may become prima donnas. Eventually, they'll leave, travel for a while, and then do something that they find fun and fullfilling.

I've always wondered if options are really good for productivity and long-term retention. In any case, if I had to work someplace, GOOG would be high on my list even without the prospects of getting rich(er).

 

[al_bundy]

Why do people fall for this? I remember the dot com and the companies that offered this. The reason they offer it is because if they are doing your laundry and feeding you, you won't need to go home. Guess what they suggest you do instead? WORK!

No thanks. I'll take my "normal" benefits package and go home at the end of the day. I work to live, not the other way around.

dot coms did it because it was free IPO money.In google's case all these fun things will stop once we have an economic downturn and a lot of their small business customers go under. there are theories that if housing tanks, credit gets a lot tighter and all the mortgage brokers will really start going out of business then it's going to be a big revenue problem.

when MS went public after an initial surge the stock was dead money for years. until 1994 if i remember right. same with google. once the free money stops and there are analyst reports about their high benefits expenses and institutional holders start calling and complaining then it will be just another place to work

 

[wabmester]

In google's case all these fun things will stop once we have an economic downturn and a lot of their small business customers go under.

I'd bet that the $11 billion cash they have on hand will keep them in gourmet food for a while even after a downturn.

I don't own any GOOG (except what index funds give me), but even if you ignore their ad revenue, it's an interesting idea to simply bet on their brain power. Generally much smarter than the original crew at MSFT.

 

[retireandbike]

But having a ton of money will probably change them. They will waste a lot of time calculating their net worth each day. Then they will realize that they never have to do any of the grunt work, and they may become prima donnas. Eventually, they'll leave, travel for a while, and then do something that they find fun and fullfilling.

It depends. Some have so much money they didn't have to work 2 years ago. They're still working and productive. People who are driven by competitiveness or enjoyment of work won't be bothered to calculate net worths. There are surprisingly few prima donnas, and I haven't met too many. A lot of young hot-heads are hot-shots, so you might run into those, but I was a young hot shot hot-head too, so I know what it's like.

There are folks who've burnt out and gone on an extended leave, never to return. But there are many many newer folks who are bright-eyed and bushy-tailed, and happy to work for food and options, who aren't close to fully vested yet, so I'm not worried.

There will be an inevitable downturn, and there'll be some other company that will be the "it" company to work for in Silicon Valley. That's not in question. By then, though, I'll be ER'd.

 

[Nords]

I don't think people work because they get bribed by food (or free laundry).

Oh yeah, them's the reasons I joined the submarine force...

it's an interesting idea to simply bet on their brain power.

I wish I could figure out a way to plug that into a valuation spreadsheet. I thought the IPO was overpriced at $85...

 

[clifp]

Based on my experience on Intel, and talking to a lot tech millionaire over the years, I suspect the Google folks will fall into three broad camps.

A. This is job is so cool I don't believe they are paying me. These folks will keep working until they burn out.

B. My Google stock is a major source of my financial future, I better start acting like an owner not an employee. This is ideally what stock options are suppose to do, and believe it or not it often works. You get some very positive things like people in meeting agree that while do X maybe good for their little empire in the short run, it is bad for the stockprice in the long time.

C. Screw you, I REALLY don't need this job. Unfortunately, when people don't have the fear of being fired (because they are already FIRED) the crappy but essential job tend to either not get done, or done by new people.

I went through all three phases before leaving.

I will say this about Google, the place still is the IT company in the valley, that counts for a lot. Second, except for the really hot teaching assistant for German , Eric Schmidt, Google CEO, was the best TA I had in college.

He is a very bright, down to earth, steady and calm guy, if anybody can herd the hyperactive intellects of GOOG employees he is the man to do it.

 

[NinjaPigeon]

I wish I could figure out a way to plug that into a valuation spreadsheet. I thought the IPO was overpriced at $85...

Agree completely. It takes more than brains to keep the cash flowing in. That being said, I do love the work they've done over the last few years, and believe they will continue to do great things for another few years. But the party will end at some point and their stock will reach a normal level. That P/E is higher than it should be. (So is AAPL!)

As for work being fun, sure, I can see that. But if I was a GOOG millionaire, I'd retire and spend time on a lake somewhere and not in front of a computer

 

[NinjaPigeon]

Clifp, that's some good insight, actually. Thanks for adding it.

Maybe it's a personality thing, but I don't wanna work for a "cause" in IT. Like, I enjoy Linux and the impact it's had on my industry. But it's just an operating system. OSS is a compelling idea, but a lot of times it becomes pure zealotry (ESR anyone?).

Google has so far proven to be a very benevolent, innovative, and passionate company. But they've been gathering data about every aspect of our lives for years now. Give it 10 years and see if their management still has the same goals and ideals. See if you still trust them to be the guardians of that information.

They already gave in to the Chinese government. And why wouldn't they? It was the right business decision to make. And that's exactly the point everyone needs to remember - it's just a business. Remember that they are a publicly traded company now, and dollars are what matters to shareholders.

Maybe I'm just feeling jaded from the last several years in the business. I know the college version of me would have Loved the idea of working at Google. And I certainly hope many of my fellow programmers get fat and rich off the Google machine But I don't think it's a company for which I'd wish to work.

 

[audreyh1]

I'm one of the few here who ER'd off of tech stock options. I think CFB did, but other than that not many folks mention it. I would have thought there would be more hanging around this forum.

Many of my peers discovered that there were all sorts of things they would rather do with their time than work.

Audrey

 

[al_bundy]

i made some money on it a year ago but missed most of it because i thought it was too overvalued. the company was growing at close to 100% a year and the PE was a lot lower, but i don't remember it. the cash flow was also there so it was real growth. even with a PE of 50 or whatever it was it was still a good buy because of the higher growth rate

if you tried to use Graham's discounted cash flow to value this I don't think it would work. i read the book but think it's a wacky system and is mostly good for big blue chips and not the GOOG's. in the book they mentioned their website and i went to it and plugged in a few stocks to get their ratings according to the system in the book. MS got high ratings and some growth stocks got lower ratings. MS has also been dead money for years so that was the end of my experience with it.

on the other hand IBD has had a 90 - 99 rating on it for a long time due to earnings growth, margins, relative strength etc. and the chart patterns have been text book chart patterns from O'Neill's books

 

[tryan]

A good friend of my brothers was in sales at Yahoo. Achieved milionaire status; traveld the world during the boom. Now waits tables. His options were nearly worthless.

Some companies grow too fast.