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Oxide’s compensation model: how is it going?

oxide.computer

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Re: Oxide’s compensation model: how is it going?

#31

Post by lbotos »

theoryofx wrote: post #27
bcantrill wrote: post #5

Earlier quoted context omitted.

Happy to go into it in more detail, but the salient points are in the piece: sales folks are eligible to make more -- but can also make less. This is in keeping with the way enterprise sales is done more or less everywhere: sales is different from every other company activity in that it is very quantifiable. I don't think that there's a whole lot more to say about it?

"this is in keeping with the way enterprise sales is done more or less everywhere..." For non-sales roles you're doing things very differently than (most) everywhere else, which is why it seems like a compromise to give in to an 'industry standard' model for enterprise sales. The fact that sales is quantifiable doesn't explain why sales people get instantly rewarded with cash comp (+ equity) while everyone else on th…

> why sales people get instantly rewarded with cash comp while everyone else on the team might wait years for a potential liquidity event.

Because sales people also do not make money if they don't sell?

What's your counter proposal on how they should pay and attract top sales folks?

I know some sales folks who would love to have $200k base with no variable component: The bad ones.

Every salesperson that I've ever worked with that was worth their salt was worth the commission they made.

Re: Oxide’s compensation model: how is it going?

#32

Post by boulos »

bcantrill wrote: post #29
boulos wrote: post #21

Apparently, I'm one of the people that would have given feedback on the original proposal :). > Some will say that we should be talking about equity, not cash compensation. I think of compensation as total compensation. It would be fine to say this is Oxide's salary model. And I think it's a fine choice. It sounds like the equity grants are naturally variable, though I doubt it's just newer vs older employees: > As f…

We have had cash bonuses but they are (wait for it?) uniform -- and they have been based on company-wide events.

Also reasonable! A little annoying though, since I find most people are better served by uniform paychecks, but I understand the celebratory aspect.

Re: Oxide’s compensation model: how is it going?

#33

Post by steveklabnik »

boulos wrote: post #32
bcantrill wrote: post #29

Earlier quoted context omitted.

We have had cash bonuses but they are (wait for it?) uniform -- and they have been based on company-wide events.

Also reasonable! A little annoying though, since I find most people are better served by uniform paychecks, but I understand the celebratory aspect.

It doesn't happen often enough for you to rely on it for budgeting, it's a nice surprise, not something that you think of as part of your regular compensation.

(I've worked at places where your "bonus" was regular, until it wasn't: that did not go over well...)

Re: Oxide’s compensation model: how is it going?

#34

Post by parrit »

setheron wrote: post #6
jszymborski wrote: post #3

I wonder why not just make it an employee-owned cooperative at that point? I understand there are funding considerations, and founders won't get the lion share, but it fits the stated values better.

Good point. The other aspect that I didn't buy too much was the original blog entry claims the salary is enough since the founders themselves have kids and are living in San Francisco. They are coming from a point of economic safety from prior successful ventures and maybe are on multiple boards with other income streams. Anyways. I like the intent so I won't be too critical.

Yeah $175k plus 30% say stake in high growth company plus already owns home plus parents help woth kids and they own home nearby is different to $175k none of above.

Re: Oxide’s compensation model: how is it going?

#35

Post by steveklabnik »

parrit wrote: post #34
setheron wrote: post #6

Earlier quoted context omitted.

Good point. The other aspect that I didn't buy too much was the original blog entry claims the salary is enough since the founders themselves have kids and are living in San Francisco. They are coming from a point of economic safety from prior successful ventures and maybe are on multiple boards with other income streams. Anyways. I like the intent so I won't be too critical.

Yeah $175k plus 30% say stake in high growth company plus already owns home plus parents help woth kids and they own home nearby is different to $175k none of above.

That $175k was pre-pandemic, as the post says, it's $207,264 now.

I'd also say that you're presuming a lot about the lifestyle of some strangers on the internet.

Re: Oxide’s compensation model: how is it going?

#37

Post by ec109685 »

While there are a few things highlighted in the post that are unique to this flat comp structure (e.g. no middle managers worrying about comp and leveling), for things like “we hold a high hiring bar”, it isn't at all clear that paying everyone the same has has anything to do with where the bar is set.

Re: Oxide’s compensation model: how is it going?

#38

Post by ec109685 »

michaelt wrote: post #23

> One of the more incredible (and disturbingly frequent) objections I have heard is: "But is that what you’ll pay support folks?" I continue to find this question offensive, but I no longer find it surprising: the specific dismissal of support roles reveals a widespread and corrosive devaluation of those closest to customers. The easy way to "pay everyone the same amount" when you sorta don't want to is to outsource…

Why is that a good thing?

Re: Oxide’s compensation model: how is it going?

#39

Post by cobertos »

If you free up the peer/employee/worker from thinking about the constraints of scarcity of money, doesn't the next resource of scarcity become time (or perhaps, intellectual property)? Which can still lead to a straying from the candor and other ideals this compensation system hopes to promote. The corporation still owns all your time, and all your production during that time.

I just can't help but think this scarcity of resources still causes poor incentives that lead to not as good human/team outcomes. Maybe better than in a "normal" compensation structure though?

Re: Oxide’s compensation model: how is it going?

#40

Post by jasode »

theoryofx wrote: post #27
bcantrill wrote: post #5

Earlier quoted context omitted.

Happy to go into it in more detail, but the salient points are in the piece: sales folks are eligible to make more -- but can also make less. This is in keeping with the way enterprise sales is done more or less everywhere: sales is different from every other company activity in that it is very quantifiable. I don't think that there's a whole lot more to say about it?

"this is in keeping with the way enterprise sales is done more or less everywhere..." For non-sales roles you're doing things very differently than (most) everywhere else, which is why it seems like a compromise to give in to an 'industry standard' model for enterprise sales. The fact that sales is quantifiable doesn't explain why sales people get instantly rewarded with cash comp (+ equity) while everyone else on th…

>The real explanation for why sales people get paid so well is that some really good sales people sold the idea of a highly favorable 'industry standard' model for enterprise sales.

Is there a notable company with enterprise sales that's successful without sales commissions?

Companies in the past have tried a "flat salary no commissions" comp structure for salespeople before and it doesn't work even though intuition seems to tells us that it should. The thinking goes something like... "If salespeople are paid a good salary and therefore aren't under any pressure to meet any quotas to earn a high income, that mental freedom should allow them to sell."

What actually happens is that fixed salaries for sales positions attracts underperformers who can't sell and simultaneously, makes the job not attractive to "rainmakers" who know they're worth more than the fixed salary.

E.g. Pluralsight made the news in 2014 for not paying commissions to salespeople with a list of intuitive-sounding reasons: https://www.inc.com/aaron-skonnard/why-sales-commissions-don...

... But 2 years after that story, they changed their policy and had to pay sales commissions again. They eventually learned what previous companies already figured out: variable pay for salespeople works the best.

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