General Motors Pays Out Retention Incentives to Cruise Employees

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 [e-mail]

(END) Dow Jones Newswires

July 21, 2016 12:53 ET (16:53 GMT)

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