

Ask HN: Are any of you salaried under pay-for-performance? - _______________

A potential employer just sent me an offer with a 20k reduction in base salary, but 20k added on in bonuses if I meet expectations. Anyone in CTO/programming/IT capacity work this way?
======
ig1
I'm not sure why anyone would take such a deal, it's not uncommon for
developers to have bonuses tied to performance but I would expect that to be
on-top of a competitive base salary and not in-lieu of it.

~~~
_______________
That's exactly what I was thinking as well.

In context of CTO-level work, pay-for-performance would also seem to encourage
meeting reward goals at the expense of a thousand other unmeasured tasks.

~~~
ig1
Most CTOs (and generally all senior staff) have incentivized bonuses.

------
mcotton
I've never heard of that and unless you are happy with the worst-case base
salary I would renegotiate. Having been a part of many bonus systems, I never
plan on the bonus money to actually hit my bank account.

~~~
_______________
Good advice, thank you. I told the employer that since this is a reduction
rather than addition, it's more like a punitive system.

~~~
caw
I believe if I were to take this offer, the risk/reward would have to be
higher, in addition to knowing about partial bonuses and how pass/fail/partial
allocation is figured(discretionary vs calculated). So in this example to take
a 20K salary hit, the bonus would have to be at least 40K. If you hit it only
ever other year, it evens out.

------
codegeek
All else being equal, I would say No deal. reduction in base salary is a huge
thing. Let me tell you why. Lets say you do take that new job with the salary
reduction, best case you get that 20K bonus. Now, if you want to switch jobs,
most employers will consider your base salary first and bonus second because
bonus is not guaranteed. Your leverage or power to negotiate goes down with a
lesser base salary. Worst case, you don't even get the bonus (oh we had a bad
year u know) and there u r. 20K reduced base with 0 bonus. Your next potential
employer wont care less why u took a reduction. They see reduction, period.

I know i m sounding harsh here but thats the reality of salaries these days. I
understand that startups might have a little more flexibility but as a
professional with 10 years of work experience, I would _never_ _ever_ suggest
to take a salary reduction. You just don't know where you will end up next.

------
Mankhool
What about benefits? My current employer values benefits at 22% of one's gross
salary. I'm a contractor so they figure if I am going to be an employee that I
should work for X - 22% + a non-guaranteed performance bonus of 7-15%.

~~~
_______________
Benefits are all buy in at group rates, no equity options, so that may be moot
in this case. Good point though.

------
ablerman
It depends upon the company. If it's a young company that's growing then they
might like to give you the salary but can't afford it. By giving you part of
the salary as a bonus, it allows them backload the cost.

------
codeonfire
You won't get it unless it's up front. Common sense should prevail here, why
structure it like this except they don't want to pay you?

~~~
_______________
I think it's a bit of systemic mistrust rather than any underhanded plan. The
owner is worried about what he sees as a high salary and wants to bake in some
accountability.

