General Motors Pays Out Retention Incentives to Cruise Employees
July 21 2016 - 1:08PM
Dow Jones News
By John D. Stoll
General Motors Co. paid out $107 million in retention incentives
to at least a portion of the roughly 40 employees of Cruise
Automation Inc. who came to the auto maker as part of a May
acquisition, according to a federal filing.
Since the acquisition was completed, the Cruise workforce -- now
technically a unit of GM -- has grown to about 70 people. Cruise is
a Silicon Valley autonomous vehicle developer that began operating
in 2013.
The filing indicates additional performance-based awards were
also granted to certain Cruise employees on top of the retention
incentives. Those awards are contingent on the achievement of
specific technology and commercialization milestones.
It is unclear how the $107 million payout is split among the
employees of Cruise at the time of the acquisition, but the filing
says the retention awards were granted to "key individuals."
Cruise's chief executive, Kyle Vogt, and other top leaders have
been promoted as key employees of that company since the deal was
announced.
A GM spokesman couldn't immediately be reached to comment on the
terms of stock awards or other compensation.
GM paid $291 million in cash and $290 million in new common
stock for Cruise, which worked largely under the radar on
driverless-vehicle technology in San Francisco before GM announced
its intention to buy the company in early 2016. That $581 million
price tag, however, doesn't include those retention incentives or
other performance awards disclosed in GM's quarterly filing with
the Securities and Exchange Commission.
The value of the stock paid for Cruise was based on the $31.18
closing price of GM's common stock on May 12. Employees must remain
employed by GM in order for restricted shares to vest.
During a conference call with analysts Thursday, GM Chief
Executive Mary Barra said the auto maker bought the startup because
of its demonstrated ability in the areas of machine learning and
artificial intelligence.
Gautham Nagesh contributed to this article.
Write to John D. Stoll at john.stoll@wsj.com
(END) Dow Jones Newswires
July 21, 2016 12:53 ET (16:53 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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