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Qualtrics, the fast-growing data collection software firm in Provo, will get a multimillion dollar tax break from the state of Utah if it creates almost 1,100 jobs over the next seven years, the Governor's Office of Economic Development board decided Thursday.
"This is a great company for Utah, great jobs, [a] good investment," Teri Klug, director of strategic development at the Economic Development Corporation of Utah, told the board after it unanimously approved the $10.8 million post-performance tax credit in return for a pledge to create 1,080 jobs by the end of the decade.
"I think that they'll grow nationally, and then they'll have their headquarters here locally," Klug said. "Just stay tuned."
The jobs must pay at least 125 percent of the Utah County average wage, which the Bureau of Labor Statistics says is $724 a week. Some will pay much more.
"These jobs do pay approximately 165 percent of the average county [wage] without benefits. With health care benefits these are high-paying jobs in excess of 175 percent of the average county wage," Christopher Conabee, GOED's managing director of corporate recruitment, said.
Stuart Orgill, a Qualtrics co-founder, wouldn't confirm those percentages. But the tax credit will help the company keep its headquarter in Provo, he said later.
With more than half of the Fortune 100 companies and 1,300 universities as customers, Qualtrics' sales have been doubling each year for six years, Orgill said. Managing the growth has been difficult, and the company's need for more senior management is outstripping its ability to develop enough leadership talent from among its 250 employees. The problem pushed Qualtrics to think about moving out of Utah, he said.
The question became, "Do we want to bring additional people from outside [the state], or do we want to move to a location that would be in a very established tech sector?" Orgill said. With the incentive's help, the company now will be able to recruit managerial talent without leaving Provo, he said.
"We know that we will have to work a little bit harder to maintain our headquarters here as we grow,'' Orgill told the board. "But the tax incentive will help us to do that, to maintain our headquarters, even as we expand globally,"
Founded in 2002, the company sells online question-and-answer survey tools. Among its 4,800 customers are online travel sites Expedia and Travelocity, automakers GM and Toyota, tech companies Hewlett-Packard and Microsoft, and telecommunications giant Verizon.
In April, Qualtrics raked in $70 million in equity capital from Accel Partners and Sequoia Capital, after turning down a larger offer from another investment firm.
Orgill said Qualtrics didn't accept the $70 million to finance its growth; the company can do that with cash it generates through sales. Instead, the company took the investment because it comes with Accel and Sequoia's high-level management skills, which Qualtrics needs to expand globally, he said.
The investment was the largest first-round speculation in a Utah software startup since 2008, according to GOED.
Also Thursday, GOED's board approved two other tax incentives:
• The Royal Bank of Scotland will receive a post-performance tax credit of $5.3 million, in return for creating 50 more jobs at its support center in Taylorsville. The incentive expands an existing pact the bank forged with GOED two years ago, when the state development agency agreed to provide an $8.6 million tax credit to one of the bank's divisions, on the condition that it create 260 jobs by 2025.
• Workday Inc., a California-based business software company, will receive an $8.4 million post-performance tax credit. The company has pledged to create 500 jobs in Salt Lake City over 15 years. The agreement modifies an incentive GOED gave the company in March. At the time, Workday planned to create 250 jobs.