You'd have to provide some great incentives to balance the 25% lower salary. Free time is nice, but it's also free. If I value free time over a large paycheck t

You'd have to provide some great incentives to balance the 25% lower salary. Free time is nice, but it's also free. If I value free time over a large paycheck to the extent that I'd be willing to give up that much salary, I'm basically just looking for a part time job. It sounds like the only difference is that you're allowed to use company resources for a side project. Is that enough? I'm uncomfortable with the idea that not paying employees what they're worth will have a net benefit. You should pay your employees well in whatever ways you can reasonably do it (money, benefits, stake in the company, perks, even softer things like respect, trust, etc.) Compensating them with free time doesn't make any sense. They have just as much time as you do, and it's theirs to spend.