Alphabet has a new way to keep the pressure on employees that work in its non-Google ‘Other Bets’ divisions.
Those subsidiaries, which lost about ~$800 million last quarter, are creating new types of stock that will fluctuate depending on their own divisions’ performance, versus Alphabet’s overall, Bloomberg’s Alistair Barr reports.
Employees often get a solid chunk of their total pay from stock, so “Other Bets” employees will have more of a financial stake in their own division even as Google’s ads business continues to print money and swell Alphabet’s price.
CEO Larry Page wants the new system to push the individual divisions to act more like startups.
The life sciences group Verily will soon start using the system, Bloomberg reported.
The division’s valuation will be based on an analysis by an independent firm and employees will be able to sell their vested Verily shares to Alphabet every six months for either cash or Alphabet equity. The division working on self-driving cars and delivery drones, X, already uses a similar system, but no word yet on its smart home subsidiary Nest, longevity division Calico, or its Access and Energy group.
Google wasn’t immediately available for comment.