
VC Confidential: What Compensation Should You Give Your Team? - jkopelman
http://www.vcconfidential.com/2008/10/what-compensation-should-you-give-your-team.html
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timr
_"Across-the-board pay cut."_

So, in this scenario you've got the suits making 2x-4x what the people who
build the product are making, yet _everyone_ is expected to take the same
percentage cut in salary. (Nevermind the fact that the lower-ranking employees
are probably just getting by!)

Remember how just a few weeks ago, everyone was complaining that CEO pay is
drastically out of touch with performance? This is how it starts.

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ConradHex
I'm not sure that "across-the-board" means the same percentage for everyone.
It could just mean everyone's pay gets cut.

But I'm going to go out on a limb here and guess that in a company where the
CEO is overpaid, he's not going to take a real big pay cut voluntarily.

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timr
Yeah, I thought about that, too. But even if the cut is graded, it doesn't
seem right to cut the pay of people who are just getting by and living on
their salary, when the executives are earning a comfortable premium over
living expenses, _plus_ equity.

Cut the pay of a $300k CEO, and maybe he waits a bit to buy his next $1,000
Eames chair. Cut the pay of the $60k graphic designer, and she takes roommates
and eats ramen (in the bay area; obviously, the numbers change in Podunk, IA).

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trevelyan
Please maintain these pay rates. It gives my competitors and potential
competitors higher burn rates, and makes acquisition much easier when the
alternative is actually building.

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petercooper
Agreed. These numbers are absolutely nuts. (That's not to say they're not
common, but they're crazy.)

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johnrob
Do startups normally have bonuses?

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dcurtis
Post Series-A, it is somewhat common though not universal. Once you start
adding employees who don't hold significant amounts of equity, you have to
create meaningful performance incentives. The best way to do that is with a
monetary bonus.

Also, remember, all of these numbers are for non-founding positions.

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fallentimes
Josh, how was half.com's compensation structured :) ?

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utnick
Are stock options the same thing as equity?

If not what are the pros and cons of each?

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dcurtis
Yes, any amount of stock ownership-- or _potential_ ownership, as with
options-- is considered "equity." Although these numbers in percentages are
skewed-- in fact, the actual equity compensation is obviously spread over four
years. So to put the percentage equity share owned after four years next to
the yearly salary is somewhat misleading.

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senihele
How universal do you find these salaries are? I imagine they would vary a
great deal by the size of the startup. Is that the case or not?

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fnazeeri
There is actually a pretty detailed annual survey of VC-backed startup
executive comp. The data covers the top 10-ish execs at hundreds of surveyed
companies and reports it by revenue, headcount, capital raised, geography and
more. If you want more info, check this out:
<http://www.altgate.com/blog/2008/01/2007-it-startup.html>

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ashishk
75k Bonus!?!?

How about a liquidation event bonus?

That seems more reasonable.

