Salary at Venture-Backed Companies

Post by ntomaino » Mon, Apr 22, 2013, 10:23 PM UTC

russell wrote: post #58

A couple of decades ago I read about a company in New Hampshire of Vermont that made skiing and hiking outerwear, definitely not hi-tech. They posted everyone's salaries on the wall, including management. If someone wanted a raise he crossed out his old salary and wrote in a new one. The president(?) said no-one abused the system because it was self-limiting it was all there for everyone to read. I've never seen it a…

Post by ttrreeww » Mon, Apr 22, 2013, 10:26 PM UTC

ameister14 wrote: post #50

tonystubblebine wrote: post #4

If we're going to have this discussion and focus on the management team, then I think we need to say how much money the company has raised. My thinking about salary for myself and co-founder is definitely funding specific.

Why? If I got 50 million dollars in funding or 400k, I'd still probably pay myself only what I need to survive/present myself and pour as much into the business as possible, at least until profitability and even then my salary would remain low until profitability was maintained and began to increase rather than be an issue. Then again, I don't have a family.

Post by silvertonia » Mon, Apr 22, 2013, 10:34 PM UTC

ntomaino wrote: post #11

rayiner wrote: post #3

> If you offer too little compensation, you may not attract the talent that you need to be successful. But if you offer too much compensation, management and employees may begin to feel fat and happy and lose the motivation to maximize long-term value for shareholders. > Salary is a measure of how much value one is adding to a company, and that information should not be a secret. > If companies are consistently payin…

Thanks for the feedback rayiner. My statement that paying people excessively can make them less hungry is something that has been observed through experience. I'm not saying that this is always the case, just that it happens and is something to be aware of. Sure, salary is a matter of supply and demand- which is why I'm advocating for more transparency so that all market participants can make decisions with more comp…

Post by ntomaino » Mon, Apr 22, 2013, 10:53 PM UTC

auctiontheory wrote: post #49

ntomaino wrote: post #27

Earlier quoted context omitted.

Definitely true for sales folks at B2B companies- total comp can sometimes eclipse CEO when adding commission. My piece is focused on salary, not commission, cash bonus, and equity. Surely, a more complete picture of total comp is more valuable, but the scope of the piece was just focused on salary.

Then I think the article should explicitly point out that salary is only a piece (and perhaps not the largest piece) of total cash comp. Otherwise it is very misleading to the naive reader.

Post by consz » Mon, Apr 22, 2013, 11:07 PM UTC

ntomaino wrote: post #67

ruswick wrote: post #53

"But if you offer too much compensation, management and employees may begin to feel fat and happy and lose the motivation to maximize long-term value for shareholders." God forbid if your employees are happy. In all seriousness, I don't even remotely understand this mindset. Why would paying your employees less than they deserve or less than is optimal encourage them to "stay hungry." If anything, this is going to de…

Paying management less than they deserve would not encourage them to stay hungry. But paying them more than they deserve based on market dynamics could possibly cause them to lose motivation. This is definitely not a rule that occurs 100% of the time, but my point is its something to be aware of, and salaries need to be more transparent so better-educated salary decisions can be made (for all participants of the tech…