Waze Employees Clinch Most Lucrative Exit in Israeli History

Each of the company's 100 employees will be getting an average of $1.2 million.

The 100 employees of the Israeli navigation app developer Waze stand to receive a total of $120 million, as a result of Google’s acquisition of the company, making this the most lucrative exit ever for employees of an Israeli startup. The global search giant confirmed on Tuesday that it had agreed to purchase Waze for $1.15 billion.

Prime Minister Benjamin Netanyahu called Waze CEO Noam Bardin on Tuesday evening to congratulate him on the sale. “We fought to keep the company in Israel,” Bardin said in response. “We’ll help you close the hole in the budget,” he added, partially in jest but also in pride.

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.

The fate of the employees was one of the main subjects that came up in negotiations − first with Facebook, and when that fell through, with Google. The management insisted that the company stay in Israel, and that it remains an independent entity. The management sought to ensure that the employees profited from the sale and retained their jobs.

Facebook had hesitated about keeping the company in Israel, but Google was clear in its commitment to this.

Bloomberg
Nimrod Glickman