Israel Matzav: Waze's 100 employees to split an <i>average</i> of $1.2 million each

Thursday, June 13, 2013

Waze's 100 employees to split an average of $1.2 million each

Haaretz is reporting that each of Waze's 100 employees will receive an average of $1.2 million as a result of the deal announced with Google earlier this week. Waze was founded in 2009, and that's quite an impressive haul for four years (if you're a Waze employee, don't get angry and please read through to the end).

Of the $1.15 billion that Google transferred into the account of Waze’s shareholders’ trustee, $1.03 billion will be going to the company’s owners, which include institutional investors, funds and other investors.

The remaining $120 million will be going to workers over the next four years. This includes $45 million they’ll be receiving in exchange for options and shares they hold, and another $75 million to be paid as compensation. These figures were hashed out between Waze’s management, shareholders and Google’s representatives.

Waze has many newer employees who don’t own options, so the compensation structure − which includes cash payouts − is intended to serve them as well. The money will be divided up by management based on employees’ contributions, and not necessarily seniority.

But employees will receive an average of $1.2 million each before taxes.

In addition, Waze’s employees will be benefiting from Google’s employee retention plan, as part of the deal hashed out. This means that Waze employees who are still with the company four years after the acquisition will be eligible for another payout.

Waze is a relatively young company, with many workers in their 20s and 30s, as is typical of companies that develop applications for mobile platforms. In contrast to many larger software companies, a large proportion of Waze employees are just starting out in their careers. The company employs programmers as well as graphic artists who developed its interface, and customer service representatives who speak various languages. Employees earn salaries that are above the Israeli average but relatively low compared to those at other high-tech companies.

Don't be too impressed. If you're making $300,000 per year in this country, you're probably paying 60-70% in taxes, before you go shopping and pay 18% VAT on everything you buy.

But I give management and the employees a lot of credit. Four years to this kind of mammoth exit is quite impressive. I'm sure many of the employees could have worked at one of those established high tech companies and made more salary and taken less risk. They didn't. I would guess that many of them were making around $50,000 per year until now.

Kudos to management for taking care of the employees and making sure that they'd be well-compensated and would be able to remain in Israel with the company if they choose to do so.

And finally, when you're ready to do your next start-up, please drop me an email :-)

Labels: Google, Israeli economy, Israeli high tech, Israeli taxes