hen you do evaluate
compensation, get
the market data ahead of time from your lead VC firm. You want to make sure you’re still competitive, and if you discover you’re lagging, consider a blanket increase across the board.
In addition to providing
competitive salaries for the
market, you should explain what that means to your employees. “What is market when it comes to compensation, and how is it defined? What does it actually mean?” Don’t leave people wondering where you got your data set or how credible you’re being on this issue.
As an early employee, most of the value people should be getting is the increase in the value of their equity as the
company grows. Giving
people performance bumps
will get complicated and potentially unfair fast.
But, the logic follows, if an increase is absolutely necessary, it should come in the form of equity — not base salary.
Don´t leave people wondering where your got your data set or how credible you´re being
Generally speaking, exceptions are a horrible idea because everyone wants to be the exception — and remember, people will find out. It reduces fairness and usually won’t actually make the person who is the exception as happy as you want them to be.
Avoid exceptions
All about growth
Everyone’s energy should be going to equity for a while — nobody should be getting raises unless it’s about getting them up to market rate. If people are working head down to increase the overall value of the company, that increases everyone’s reward, and that should be a good incentive.
Make sure you compare this percentage to market rates to make sure you don’t fall behind — but do keep in mind that equity is not equivalent between companies.
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COMPENSATION