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Increasing equity is great, but in general my view is that increased equity does two things: 1. It compensates for the increased risk of working for a startup
by comstock 10y ago
Increasing equity is great, but in general my view is that increased equity does two things:
1. It compensates for the increased risk of working for a startup (you don't have as much runway as google, might fail to raise your next round).
2. It gives the employee a stake in the company, and aligns their interests with making the company successful. I.e. Not just doing whatever they're told, failing to raise potential issues because "it's not their job".
It doesn't really compensate for reduced pay in my opinion.
- throwaway2016a 10y agoI actually agree with you. I am in disagreement with our CEO on that one. But unfortunately it's all we can afford to give so at least it is something. I have had a number of heart to hearts with devs to make sure their expectations on stock options are set right.
- pbecotte 10y agoThis statement makes no sense. If you feel that the company doesn't pay enough, there are two possibilities. 1. You get paid way more then your teams rate, proving the CEO is not being truthful (there is more money if people negotiate hard enough) 2. You are also underpaid and are doing yourself a disservice by staying
- throwaway2016a 10y agoUnfortunately it is #2. I am underpaid by over 75%. The average on the team is under by about 30 - 50%... so not only am I underpaid I am underpaid quite a lot more than others in the company. I do, however, have quite a bit more stock options. And the CEO from what I understand went two years without a paycheck. But he is independently wealthy (I am not). I stay for various personal reasons. Reasons that the other people on the team don't have. And because 75% underpaid is still enough to support me and my family with a modest lifestyle.
- poikniok 10y agoHonestly this sounds terrible. From what you have said it seems fairly clear that you are being exploited by the CEO / others. And what does it even mean that the CEO (who presumably owns a large portion of the company) went without pay for two year when he is independently wealthy? You sound quite intelligent so just think about it, if he was paying himself a salary it would just be transferring money from his bank account to his bank account again, all while being taxed. The fact that this is used as a mitigating factor to argue that you are not getting screwed is absurd, for your sake I hope you go out to the marketplace and get paid what you deserve.
- throwaway2016a 10y agoThank you for your concern. I am well aware of the situation... I am actively considering options.
- beisner 10y agoI think it can depend on the size of the operation, and your mindset. If I'm employee #100 at a well-funded startup, I'd tend to agree with you and value equity as a risk adjusting factor. But if I'm employee #5, I probably would take a pay cut in exchange for a significant chunk of equity - if I was even considering such a risky operation, I probably wouldn't be in a place in my life where job security was especially important to me.
- comstock 10y agoIf you think it would be an interesting experience, or like the people, or think it's a fun problem it makes sense to take a pay cut. If you're thinking increased equity will compensate for reduced salary in the vast majority of cases that doesn't make financial sense.