Compensation as a reflection of values

Compensation: the word alone is enough to trigger a fight-or-flight reaction in many. But we in technology have the good fortune of being in a well-compensated domain, so why does this issue induce such anxiety when our basic needs are clearly covered? If it needs to be said, it’s because compensation isn’t merely about the currency we redeem in exchange for our labors, but rather it is a proxy for how we are valued in a larger organization. This, in turn, brings us to our largest possible questions for ourselves, around things like meaning and self-worth.

So when we started Oxide — as in any new endeavor — compensation was an issue we had to deal with directly. First, there was the thorny issue of how we founders would compensate ourselves. Then, of course, came the team we wished to hire: hybrid local and remote, largely experienced to start (on account of Oxide’s outrageously ambitious mission), and coming from a diverse set of backgrounds and experiences. How would we pay people in different geographies? How could we responsibly recruit experienced folks, many of whom have families and other financial obligations that can’t be addressed with stock options? How could we avoid bringing people’s compensation history — often a reflection of race, gender, class, and other factors rather than capability — with them?

We decided to do something outlandishly simple: take the salary that Steve, Jess, and I were going to pay ourselves, and pay that to everyone. The three of us live in the San Francisco Bay Area, and Steve and I each have three kids; we knew that the dollar figure that would allow us to live without financial distress — which we put at $175,000 a year — would be at least universally adequate for the team we wanted to build. And we mean everyone literally: as of this writing we have 23 employees, and that’s what we all make.

Now, because compensation is the hottest of all hot buttons, it can be fairly expected that many people will have a reaction to this. Assuming you’ve made it to this sentence it means you are not already lighting us up in your local comments section (thank you!), and I want to promise in return that we know some likely objections, and we’ll address those. But before we do, we want to talk about the benefits of transparent uniform compensation, because they are, in a word, profound.

Broadly, our compensation model embodies our mission, principles, and values. First and foremost, we believe that our compensation model reflects our principles of honesty, integrity, and decency. To flip it around: sadly, we have seen extant comp structures in the industry become breeding grounds for dishonesty, deceit, and indecency. Beyond our principles, our comp model is a tangible expression of several of our values in particular:

These are (some of!) the overwhelming positives; what about those objections?

Of these objections, several are of the ilk that this cannot endure at arbitrary scale. This may be true — our compensation may well not be uniform in perpetuity — but we believe wholeheartedly that our values will endure. So if and when the uniformity of our compensation needs to change, we fully expect that it will remain transparent — and that we as a team will discuss it candidly and empathetically. In this regard, we take inspiration from companies that have pioneered transparent compensation. It is very interesting to, for example, look at how Buffer’s compensation has changed over the years. Their approach is different from ours in the specifics, but they are a kindred spirit with respect to underlying values — and their success with transparent compensation gives us confidence that, whatever changes must come with time, we will be able to accommodate them without sacrificing what is important to us!

Finally, a modest correction. The $175,000 isn’t quite true — or at least not anymore. I had forgotten that when we did our initial planning, we had budgeted modest comp increases after the first year, so it turns out, we all got a raise to $180,250 in December! I didn’t know it was coming (and nor did anyone else); Steve just announced it in the All Hands: no three-hundred-and-sixty degree reviews, no stack ranking, no OKRs, no skip-levels, no numerical grades — just a few more organic raspberries in everyone’s shopping basket. Never has a change in compensation felt so universally positive!

Posted on March 4, 2021 at 10:00 pm by bmc · Permalink
In: Uncategorized