Google went public on August 19, 2004. Fast forward 17 years and the company's founders are two of the wealthiest people in the world. As of this writing, Sergey Brin's $108 billion net worth makes him the seventh-richest person in the world. Larry Page's $112 billion net worth makes him the sixth-richest person in the world.
When Google went public, approximately 900 employees instantly became millionaires. Thousands more became millionaires over time.
Unfortunately, there is one very early Googler named Brian Reid who did not get to experience a financial bonanza when the company went public. Nor did he become wealthy as the stock climbed from $85 on it's IPO day to today's $2,400 per share.
Brian Reid was Google's first Director of Operations until he was unceremoniously and unexpectedly fired by Larry Page. Tragically, he was terminated just nine days before Google announced that it was going public. By losing his job, all of Brian's Google options were lost.
Those shares that would been worth a FORTUNE just seven teeny tiny months later when the company was officially listed on the NASDAQ. And you don't even want to know how much they'd be worth today.
As you can imagine, he was enraged. Enraged enough to launch a bitter and lengthy lawsuit that dragged on for six years.
Yes, to all of our Gen-Z readers, there was a time before Google.
For Brian Reid, that Google-less time began with being born in 1949. That's important because most of his Google co-workers wouldn't be born for another two decades.
He received a B.S. in physics from the University of Maryland in 1970. He then earned a PhD in Computer Science in 1980 at Carnegie Mellon where he was a member of the core team that defined Internet email standards.
After his PhD studies, Reid taught electrical engineering and computer science at Stanford as an associate professor. He then joined the private sector.
Brian was a member of the team that developed the first Cisco router as part of the company that eventually evolved into Adobe Systems. He led the group that created the first Internet firewall in 1987 and built the first high-powered Internet search engine, AltaVista, in 1995.
As you can see, Reid was well qualified for the job at Google.
Brian Reid was hired to be Google's Director of Operations in June 2002. At the time he would have been around 53 years old.
With his hiring he was given the chance to earn 119,000 Google shares at a strike price of $0.30.
In layman's terms, often when you join a startup and are given options, they aren't fully yours to sell until a certain amount of time has passed, typically three years. There are endless options with options. As they "vest" (become yours to buy), they might belong to you forever no matter what. Or there might be terms in your employment contract that make it so the options cycle back to the company if you are ever terminated or quit.
For example, I was the third employee hired at my first job in Los Angeles straight out of college. It was a web video startup. I spent 7 years at the company and eventually vested around 1% of the company's total shares. When I quit to run CNW full-time in 2012, I knew that technically I had 90 days to pay for my options. I forget how much this would have cost me, but it was something like $100,000 which was $98,000 more than I had in the bank at the time. The company had assured me before I quit that they would not require me to purchase my shares at all, let alone within 90 days. After my last day on the job, they ghosted me. They never sent any paperwork to make it official that I wouldn't be required to cough up $100k within three months. So 90 days went by and suddenly I no longer owned 1% of this startup. It was painful. In the end that was a blessing because those shares ultimately would not have been worth anything. I was still furious at the time and stayed bitter for years.
During his time at Google, Brian Reid only had one performance review, from his manager Wayne Rosing. The review was positive. In the review, Rosing described Reid as having "an extraordinarily broad range of knowledge concerning Operations, Engineering in general and an aptitude and orientation towards operational and IT issues." Rosing noted that Reid "projected confidence when dealing with fast changing situations," "had an excellent attitude about what 'OPS' and 'Support' mean," and was "very intelligent," "creative," "a terrific problem solver," and that the "vast majority of Ops ran great." Rosing gave Reid a performance rating indicating he "consistently met expectations."
In October 2003 Brian was moved onto a project at Google that had no funding and no staff. His former position and duties were taken over by Urs Holze, who was 15 years younger than Reid.
Losing A Fortune
In February 2004, Brian Reid was unceremoniously fired by the then 30-year-old Larry Page.
Reid was told that he was "not a cultural fit."
With his termination, Brian Reid's 119,000 options were forfeited back to Google.
Had Brian been with the company just seven months later when Google went public in August 2004, he would have had the option to pay $0.30 for each of his 119,000 options. That would have cost him $35,700.
Google's price per share after its first day of trading was $85. So had he exercised his options at the IPO, Brian could have paid $35,700 for shares that would have been worth…
Technically, he may have been required to wait 6 months to sell any shares. At that point his shares would have been worth $12 million.
It gets worse.
Here's a chart of Google's stock price since 2004:
As you can see, Google's price per share has been nothing short of a rocket ship.
As I type this article a single share of Google stock would set you back $2,430.
So. Had Brian Reid been able to keep his options… and if he somehow wisely held on to every single share… today his 119,000 shares would be worth…
Reid proceeded to sue Google in July 2004 for discrimination on the basis of age. It was not an easy case. Three months later, the Santa Clara Superior Court granted a summary judgment against his claims. This judgment was overturned on October 4, 2007 by the California Sixth District Court of Appeals. The case finally went to trial in 2010.
Google argued that Reid's termination was not based on his age. They touted their famous progressive and nurturing corporate culture. They argued that Google just don't do things like that to their employees.
Reid argued in court that Urs Holzle and other employees made derogatory age-related remarks to him while he was employed at Google. Reid said Holzle told him that his opinions and ideas were "obsolete" and "too old to matter". He was allegedly called "slow," "fuzzy," "sluggish," and "lethargic," and was told that he did not "display a sense of urgency" and "lacked energy." Reid alleged that Holze made specific age-related comments to Reid every few weeks. Other coworkers called Reid an "old man," an "old guy," and an "old fuddy-duddy," told him his knowledge was ancient, and joked that Reid's CD (compact disc) jewel case office placard should be an "LP" instead of a "CD."
Google did acknowledged that some negative comments related to Brian's age were made. The lawsuit was settled out of court after the California Court of Appeals ruled that Reid had presented undisputed evidence supporting a prima facie case of age discrimination.
The case settled "to the mutual satisfaction of all parties" according to Brian's lawyer. The exact settlement amount was not released, but judging by his lawyer's comment, one must assume it was generous. Still, we can't imagine that the settlement was anywhere near what Brian Reid's stock options would be worth today. Brutal!