Feeling lucky? Google employees
In an echo from Silicon Valley's
dot-com past, Google's pending stock debut will soon turn thousands of the
company's employees into paper millionaires.
Google's rank-and-file employees
stand to be worth an average of about $2.8 million apiece based on the
estimated value of the stock and options they hold, according to a Mercury
News analysis of the company's financial documents released Monday. That's
enough for two employees to team up and buy a small valley company, if they
Google's deal sells shares to the public at the midpoint of the $108 to $135
price range Google suggested Monday as it prepares for its initial public
offering of stock. The IPO is expected to occur in the next few weeks.
"It's a flashback to four years
ago,'' said Allan McCall, a principal at Compensia, a compensation consulting
firm, who reviewed the Mercury News analysis. That was a time ``when we saw a
tremendous amount of value that was created and shared with a relatively small
number of employees.''
Some financial consultants who have met
with Google employees say they don't expect them to rush out to buy Ferraris
or other expensive toys like the dot-commers of old.
"People at Google are much more
conservative than the people who for no reason really became
millionaires,'' said Ahmad Ghavi, a loan consultant with Washington Mutual.
``Their passion is what they do and not really in flashing their money.''
Still, unlike a typical IPO, Google is
not obliging its employees to wait the traditional six months for the stock
market to absorb the new stock before letting them sell some of their own
Instead, Google is allowing its
employees to sell in steps, including allowing them to sell some soon after
the IPO happens.
In its Monday filing, Google
said that employees and others who hold certain pre-IPO stock can sell 4.6
million shares 15 days after the IPO takes place. Then they can sell a total
of 87.1 million at the three-, four- and five-month intervals thereafter.
Including 170.8 million freed up at six months, employees and other pre-IPO
investors will be allowed to sell a total of 262.5 million six months out.
Although investors in the past
have frowned on newly public companies letting their employees sell early, in
this case investors shrugged it off.
"It's a logical part of the
process of becoming a publicly held company,'' said Allison Thacker, an
investor with RS Investments in San Francisco. Rather than worry about
employees selling, she wants to know how Google will retain its talented
staff, an important key to making her potential investment more valuable.
"I want to know what gets them up
in the morning, keeps them coming to work, eager to create as much value in
the next five years as they did in the last five,'' Thacker said.
In estimating the average Googler's
wealth, the Mercury News calculated that Google has granted 24.4 million
shares to its employees since 2001. The estimates assume employees turned an
additional 28 million options into shares of stock by ``exercising'' them over
the same period. The estimate doesn't factor in employees' cost of exercising
the options, which could be an average of $5.21 a share.
documents don't disclose how many options that were granted before 2001
have already been turned into stock, which could further increase the
To be sure, the hundreds of
Google employees who started at Google three or more years ago will
undoubtedly be far richer, according to details in one recent lawsuit against
A former director of operations
who was one of Google's first few hundred employees said in the suit that he
got 119,000 stock options -- more than five times the average -- that would
have been worth more than $10 million had the employee not been terminated.
mailings, click here
Ixquick submits your search to the major search
engines and finds sites that are universally ranked in
the top ten!
Search66 is Australia's parallel search engine. Find
what you're looking for on the Net in Australia (or
the world) first time - every time!
The Mother of All Search Engines.
eCommerce and software solutions.
professional search engine submission service.