The golden rules for a compensation system that strikes the fine balance between a startup’s needs and keeping employees happy.
“You can’t be transparent if you’re not paying fair, and if you are, there’s no reason to not be transparent.”
“Most startups overpay for talent because they undervalue their own equity — so the candidate will too,”
“You should not lose candidates because another startup at a similar stage is paying them more cash.”
1) No one is ever happy with compensation, and compensation has never made anyone happy
2) People always find out what everyone else is making.
3) Create a system that revisits compensation only 1-2x a year.
4) On the spectrum between formulaic and discretionary compensation, be as formulaic as you can.