N o one is ever happy
with compensation,
and compensation has never made anyone happy.
Compensation is never going to be the thing that makes people join or stay at a startup long-term (or any company), nor should it be. Compensation is not a healthy version of retention. I know it’s terrifying when someone has a huge counter offer, or you’re trying to recruit that senior leader from a big company, but you should accept upfront that it's better if they join for the people, buy into the vision, etc., and have to make a hard decision on compensation. They will stay longer. Your goal should be to get compensation off the table — make sure that they can live on their salary and have a fair slice of equity — so employees don’t think about it except maybe once a year. The
best way to do that is to be fair and transparent.
People always find out what everyone else is making.
Never build a compensation system that assumes people won’t know what their peers and teammates are making. They always find out. You might be living really well. You might be in the wealthiest 1%, but if there’s someone sitting next to you who makes twice as much, you’re going to feel insulted. It’s just a
fact. So take that into account when you’re creating your plan. You need to be able to explain (and defend) everything through a logical set of guidelines.
If you're leading a small, early-stage company, be as transparent about what people are making as possible. This will put out fires before they start, establish an honest environment, and serve as a nice forcing function for you:
You can't be transparent if you're not paying fair, and if you are, there's no reason to not be transparent.
N
No one is ever happy with compensation and compensation never made anyone happy
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COMPENSATION