3 ms·

I like this idea, but with a few modifications: * Names should be anonymous. Everyone knows where they are within the group and can determine if its fair with

I like this idea, but with a few modifications: * Names should be anonymous. Everyone knows where they are within the group and can determine if its fair without knowing exactly who makes what. * It should include options and bonuses. In some companies non-salary compensation dwarfs salaries, and it's dishonest to point to a CEO salary and say "Look, he only makes 1.something X what regular people do." * Keep it internal to the company. No point in giving the competition an exact target or requiring whole company buy in before you do it. * Allow people to redact their own information, but display it as having been redacted. If enough people do that, or just management does it, everyone will sense that things are unfair.

7Figures2Commas 13y ago
> The vast majority of compensation in software companies is tied up in options... That's absolutely not true. Most companies never have a liquidity event, a significant number of stock options never vest (employees leaving before they're fully vested is very, very common at startups) and even when a company delivers an exit, the vast majority of employees with equity will, at best, walk away with what amounts to a modest "bonus." Facebook and Twitter-like outcomes in which hundreds of rank-and-file employees become millionaires are the exception, not the rule.
- carsongross 13y ago
  You are correct, I was being SV-centric. Edited.
  - 7Figures2Commas 13y ago
    Even in Silicon Valley, the "vast majority of compensation" is not tied up in options because again, statistically, most employees will never realize significant gains from their options. Take a senior engineer at a startup with a $125,000/year salary. He has options that are fully vested after four years. Let's say his options represent a .5% equity interest in the startup after dilution and there are no liquidity preferences to deal with (a highly unlikely scenario). His company would need to have a $100 million exit for him to walk away with a pre-tax amount equivalent to his gross salary over those four years ($500,000). In 2012, according to CB Insights, over half of startup exits were less than $50 million, and more than 80% were less than $200 million.
    - carsongross 13y ago
      Are you OK with "In some companies"? And my point isn't about average engineers. My (corrected, I admit I was overstating things with the original phrasing) point is that, in some companies, the really huge comp differentials come from non-salary compensation. So just looking at salaries is not, in those cases, a complete or honest picture.
      - 7Figures2Commas 13y ago
        I'm not sure I understand the point you're trying to make. If you're not a founder or in executive management, there is rarely any value in looking at equity "compensation" at an early-stage startup. Again, as can be seen in my example, when you're dealing with sub-1% equity amounts post dilution and liquidity preferences, as most employees are, the numbers simply don't work in your favor. To walk away with a meaningful windfall that is substantially higher than the cash salary earned over your vesting period, you will need an exit that is statistically very unlikely. Any employee who expects his or her equity stake to be on par with founders and executive management is wet behind the ears, and any individual who has dreams of becoming fabulously wealthy is far more likely to realize those dreams by starting a company than going to work for one.
- walshemj 13y ago
  Not so sure I bet most (85-90%) UK medium to large companies have share save schemes which are v popular - share options in large companies can be quite lucrative.
walshemj 13y ago
And what equity do you get for giving up 10k - Whats the cap table look like I know that one FTSE 100 co's basic share option scheme is going to turn out >£60k tax free next year (its a 5 year scheme so say 10k pa) so it had better beat that.
- gaadd33 13y ago
  Aren't share save scheme's more like employee stock option programs? Most large companies offer them and they are usually pure profit for the employee since you buy the stock at a discount. If its like equity/option grants in tech companies, I assume it can vary significantly on how much you are given and is pretty customized to your compensation package? i.e. junior dev only gets $10K in shares (over 4 years) vs a senior dev that gets $50K.
  - walshemj 13y ago
    You get options at a 20% discount - its fixed anyone can participate at the same level AC to PCGS its the same deal But yes it is a one way bet the BT 5 year one due next year is on course to pay out £60k tax free - the UK has also just doubled the max amount you can put in to an approved scheme to £500/month.

7Figures2Commas 13y ago

> The vast majority of compensation in software companies is tied up in options... That's absolutely not true. Most companies never have a liquidity event, a significant number of stock options never vest (employees leaving before they're fully vested is very, very common at startups) and even when a company delivers an exit, the vast majority of employees with equity will, at best, walk away with what amounts to a modest "bonus." Facebook and Twitter-like outcomes in which hundreds of rank-and-file employees become millionaires are the exception, not the rule.

carsongross 13y ago
You are correct, I was being SV-centric. Edited.
- 7Figures2Commas 13y ago
  Even in Silicon Valley, the "vast majority of compensation" is not tied up in options because again, statistically, most employees will never realize significant gains from their options. Take a senior engineer at a startup with a $125,000/year salary. He has options that are fully vested after four years. Let's say his options represent a .5% equity interest in the startup after dilution and there are no liquidity preferences to deal with (a highly unlikely scenario). His company would need to have a $100 million exit for him to walk away with a pre-tax amount equivalent to his gross salary over those four years ($500,000). In 2012, according to CB Insights, over half of startup exits were less than $50 million, and more than 80% were less than $200 million.
  - carsongross 13y ago
    Are you OK with "In some companies"? And my point isn't about average engineers. My (corrected, I admit I was overstating things with the original phrasing) point is that, in some companies, the really huge comp differentials come from non-salary compensation. So just looking at salaries is not, in those cases, a complete or honest picture.
    - 7Figures2Commas 13y ago
      I'm not sure I understand the point you're trying to make. If you're not a founder or in executive management, there is rarely any value in looking at equity "compensation" at an early-stage startup. Again, as can be seen in my example, when you're dealing with sub-1% equity amounts post dilution and liquidity preferences, as most employees are, the numbers simply don't work in your favor. To walk away with a meaningful windfall that is substantially higher than the cash salary earned over your vesting period, you will need an exit that is statistically very unlikely. Any employee who expects his or her equity stake to be on par with founders and executive management is wet behind the ears, and any individual who has dreams of becoming fabulously wealthy is far more likely to realize those dreams by starting a company than going to work for one.
walshemj 13y ago
Not so sure I bet most (85-90%) UK medium to large companies have share save schemes which are v popular - share options in large companies can be quite lucrative.

walshemj 13y ago

And what equity do you get for giving up 10k - Whats the cap table look like I know that one FTSE 100 co's basic share option scheme is going to turn out >£60k tax free next year (its a 5 year scheme so say 10k pa) so it had better beat that.

gaadd33 13y ago
Aren't share save scheme's more like employee stock option programs? Most large companies offer them and they are usually pure profit for the employee since you buy the stock at a discount. If its like equity/option grants in tech companies, I assume it can vary significantly on how much you are given and is pretty customized to your compensation package? i.e. junior dev only gets $10K in shares (over 4 years) vs a senior dev that gets $50K.
- walshemj 13y ago
  You get options at a 20% discount - its fixed anyone can participate at the same level AC to PCGS its the same deal But yes it is a one way bet the BT 5 year one due next year is on course to pay out £60k tax free - the UK has also just doubled the max amount you can put in to an approved scheme to £500/month.