The problem with paying employees less is that I’ll bet Google was able to hire a lot of the best and brightest talent precisely because of the bonuses it offered. So Google would want to keep offering the bonuses, but retain the employees. I wonder if there are other incentives Google (and other employers) could offer to keep well compensated employees at work. For instance, the people working for Google’s car project must be largely scientists and coders. If these people are promised access to the newest, latest labs and tech in their spare time (or after x time on the job), perhaps they could be persuaded to stay?
There’s also the possibility of making large bonuses contingent on amount of time spent on the job (with the possibility for buyout if Google stops needing the employee in question and some structure for compensation in place in case an employee becomes disabled and can’t work). Sure, you’ll get your $4 million dollar bonus, but only after you’ve worked for Google for 5 years.
Finally, some people want to work no matter how rich they get. Jamie Dimon, for instance, doesn’t need to CEO another day in his life, yet he still goes in to work every day. Perhaps Google should work on a system to screen for such people during the hiring process.