Introducing Open Salaries at Buffer

http://open.bufferapp.com/introducing-open-salaries-at-buffer-including-our-transparent-formula-and-all-individual-salaries

by jliechti1 • 13 years ago

527 337 13 years ago

open.bufferapp.com

iampims• 13 years ago

It’s one thing to have a transparent salary policy, it’s a whole another world to publicly blog about people’s salary with a link to their Twitter account.

I hope all employees agreed to have their salary published on the buffer blog.

Kudos to them for trying something different.

mberning• 13 years ago

Yeah, I think it would have been more than enough to simply explain the formula and provide some anonymized examples.

On another note, I am quite surprised at how underpaid some of their positions seem. Senior iOS engineer barely cracking 100k in a very expensive market...

wmeredith2• 13 years ago

Yeah, that's pretty ballsy. Seems like they're exposing themselves to unnecessary poaching risk. And what do they do in that situation? What if someone has a competing offer and they want to keep them around? Offer a bonus?

TheCoelacanth2• 13 years ago

It seems like the bonuses for Senior and Lead are too small. The highest paid engineer is only making 20k more than the lowest paid, and 16k of that difference is because of location.

Raphmedia2• 13 years ago

I never understood the hypocrisy about hiding your salary.

collyw• 13 years ago

Seems to be more of an American thing than a European thing. Not everyone will hide their salary here. Some will some won't.

delluminatus• 13 years ago

In general, it's seen as bragging if your salary is high, and mortifying if your salary is low, so it's usually just better to keep your mouth shut about it.

I've told a number of people my salary and regretted it every time. They seem to take a vicarious pleasure in telling other people how much money I make. "Oh, you should listen to delluminatus, he makes $xx thousand a year." Ugh.

quinnchr• 13 years ago

If discussing salary in the workplace weren't taboo there'd be people unionizing left and right.

walshemj5• 13 years ago

Companies (especially large ones) don't like it as it limits their negotiation position it can also disclose indirect discrimination e.g. "oops all the females seem to be under paid by 10/20%" which can get expensive.

And it also limits employees when they want to move as the new employer knows how much they make now.

mbesto• 13 years ago

Asymmetrical information = leverage

almosnow• 13 years ago

What are 'happines hero'es ?

adambard• 13 years ago

Presumably some combination of sales and support.

carsongross3• 13 years ago

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.

7Figures2Commas4• 13 years 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.

carsongross3• 13 years ago

You are correct, I was being SV-centric. Edited.

walshemj5• 13 years 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.

walshemj5• 13 years 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.

gaadd332• 13 years 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.

rikacomet• 13 years ago

when I clicked on "try buffer" it takes me to the url: bufferapp.com, kaspersky blocked it saying "phishing URL".

You might wanna talk with Kaspersky?

ra33• 13 years ago

Can't say a lot of good things about a company that pays a "Chief Happiness Officer" more than most of its engineers. I know plenty of startups that seem to be doing alright in the customer service department without an overpaid exec heading it.

Does she really contribute more to the bottom line than any of the other 4 underpaid engineers?

untog2• 13 years ago

A Chief Anything Officer should probably be paid more than engineers, or they shouldn't have the words Chief and Officer in their title.

And that seems like a very developer-centric viewpoint. Yes, good customer service can add a lot to a company's bottom line. Some companies have huge engineering issues and need engineers to solve them. Some companies have huge sales issues and need sales people to solve them. Some companies have huge customer service issues and need customer service agents to solve them.

digz2• 13 years ago

Disagree. The founders of my company (including me) are paid less than almost everyone else that works with us.

I know few rigorous investors that would stand to pay their CEO/founders more than ~80k a year, at least until it's clear the company is maturing. Also, as a founder with significant equity, I'd much rather put as much of my salary that I can spare (My wife and I need to eat, pay rent, etc.) to go towards bringing in (and keeping) top sales or technical talent. If you believe in my company, the math works out very well.

I also do the occasional angel investment, and frankly, I'd be pissed to see a business I invested in run like this. Two annual international offsite trips? What?! You're building an app to schedule tweets. This is not rocket science. Get to work!

invalidOrTaken• 13 years ago

I upvoted you, but now I regret it. Not because this was a bad comment, but because I realize now that I disagree.

"Chief" and "highly compensated" are not necessarily joined at the hip. It should be possible to have a C-level exec with most of their compensation variable and dependent on company performance or certain metrics, rather than a whopping base salary.

tallanvor• 13 years ago

I'm not sure you really understand what is involved in support positions. I make more than their "Chief Happiness Officer" and I'm nowhere near the top end of the pay scale for support at my employer.

ra33• 13 years ago

Who is your employer?

silverlake• 13 years ago

I coincidentally signed up for Buffer today in part because the customer service has been excellent during my trial. So she earned my business.

bliti• 13 years ago

1. Does the buffer team work remotely?

2. What's your backend written in?

danso2• 13 years ago

Wow...the engineering salaries are significantly lower than I would've expected for a well known startup in the Bay Area...at least compared to the perceived range for such things.

Note: a less cynical take is this: GodDAMN buffer employees must be happy working there if they tolerated transparency to this level...which, really, is the best win-win for all kinds of transparency scenarios.

ricardobeat2• 13 years ago

They have engineers in the UK, Taiwan, Ireland and Colorado. If they all lived in SF the salaries would be above $100k.

tootie2• 13 years ago

I'm one of maybe 10-12 architects at some stupid company and I make more than everyone at Buffer including the CEO.

ra33• 13 years ago

the engineering salaries are significantly lower than I would've expected for a well known startup in the Bay Area.

While some of them do work overseas, Buffer employees should note they're drastically underpaid for Silicon Valley, NYC, or even LA salaries. If they didn't know this before, they should now. Any mid-level dev with decent skills would start around 110-120k before benefits in a highly competitive job market. I know because I hire and offer these salaries right now.

Anyone heading customer service would be in a tier within the rest of customer service, capped at around 90k. This is especially true for a small startup where their duties aren't managing a huge customer service team but rather playing the role of basically another customer service rep.

benaston2• 13 years ago

When the market shifts, or for tactical reasons you have to pay more to recruit someone, you instantly have a problem.

dsugarman• 13 years ago

I have a feeling you will regret this soon. There are certain benefits in having a firm salary structure sponsored by a transparent system, but the loss of flexibility will hurt in ways you haven't experienced. Also, letting everyone know what their peers make can cause disgruntled employees.

thatthatis2• 13 years ago

I've worked under open salary formulas and closed salary formulas. I'd rather work under an open salary formula any day.

wahnfrieden• 13 years ago

Why

pekk3• 13 years ago

You mean it can cause employees asking for comparable pay

swombat4• 13 years ago

My company, GrantTree, is also run with open salaries (internally, though I posted the salary scale in an HN comment before). There was some disgruntlement when everyone was underpaid, but there's been remarkably little disgruntlement from individuals asking for more money for just themselves. This had been so for over a year now, so not conclusive, but starting to accumulate some data.

xentronium• 13 years ago

So, for example, in case of competitor offering your valuable worker +10-15% to their salary, will you have any means to match that offer?

jasonwocky3• 13 years ago

I work at a firm with a similar salary structure. Like every other thing, it's a tradeoff. Sure, I concede there are ways it hurts, but they are offset in my case by the ways it helps.

mrkmcknz• 13 years ago

Very humbling that no one at Buffer would call themselves a "Master", indeed many would probably but Joel at that level but he sits there on a 1.2x multiplier.

I once had a conversation with an old hat who said "If you call yourself a python master you better be fucking Guido."

humanrebar5• 13 years ago

Hmmm... that's an unfortunately worded quote.

thesausageking3• 13 years ago

The truly great programmers are not going to work for Buffer. Their product has no hard technical challenges and they're paying very low salaries.

OhHeyItsE• 13 years ago

Interesting in many ways. In particular, only the executives make what would be considered a competitive senior engineer/architect salary in NYC or SF. Perhaps they 'compensate' with equity?

iblaine• 13 years ago

If I were in HR then I would be reaching out to any employee that I see is under paid. Likewise I would not reach out to any employee that I think is over paid. Perhaps consider keeping this data internal.

JonFish856• 13 years ago

Let's say I'm a competitor, and I find that Niel (randomly picked) is someone I want to hire. All else being equal, I offer him $100k (website says he's making $88k). He comes to his boss to say "I like it here, can you match it?"

What does his boss do? Especially, if he's valuable to the company...

What if I have a very specialized skill that doesn't fit nicely into your matrix? Let's say market pay for my skill is $200k. Do you create a new category for me? Do I get dirty looks from all of my co-workers because I have a valuable skillset that most people don't?

I'd hate it, as an employee, as a boss or as an investor. But that could just be me.

ricardobeat2• 13 years ago

"All else being equal" is a huge assumption. Will your company offer the same environment, flexibility, openness, remote work? You should first assume that Buffer keeps their employees very happy to be able to openly publish their salaries.

JonFish856• 13 years ago

That's great, but what if Niel has a kid? Suddenly priorities are shuffled in a big way. Maybe he needs a 5% raise to afford <whatever it is that the kid needs>? Is it worth it to the company to lose the employee over 5% of salary?

kapilkale4• 13 years ago

Equity is still off the table.

btbuildem• 13 years ago

Yes because that works out profitably for more than 0.001% of participants.

JonFish856• 13 years ago

To add on top of that, who says that this kind of transparency breeds trust? Transparency is great in some areas, terrible in others. Take away bathroom stalls to find an area where this isn't as true (extreme example).

I trust co-workers when they do what they say they will, when they are respectful & smart, when they show up on time, when they tell me when I screwed up in a nice way, etc. I could care less what they make--to me it would be a distraction.

owenmarshall• 13 years ago

I could care less what they make--to me it would be a distraction.

Are you 100% sure that you've valued yourself accurately?

I played "show me yours and I'll show you mine" with a coworker once and he discovered that we were both working the same position but he was paid $8K less than me. The difference was that I negotiated my salary like crazy and he didn't.

Information asymmetry is the best way for companies to ensure their employees are underpaid. While it could cause a bit of awkwardness between peers, at the end of the day I think it's better to know what others are making & let them know what I make, because it strengthens everyone's position.

pekk3• 13 years ago

I would assume your real reason for objecting is that you employ people and like the information asymmetry that lets you pay someone less than they could get

JonFish856• 13 years ago

Another way would be to look at it from the perspective that I don't want to be backed into a corner. One of the things that I hated about working at a big company was the "compensation matrix"--you plug your factors into a matrix and the formula told you what you were worth. To a company, some people are worth more than others: "work ethic" is a tough one to plug into a matrix.

I don't find that there's a lot of information asymmetry, at least as an engineer. Beyond a first job, is there really that much? I know what I made at my last job, I know approximately what I'm worth, and I argue from there. If a company won't pay me what I think I'm worth, I look elsewhere.

Every situation is unique: how desperate is the company, how desperate is the employee, how many roles will a person fill, how many intangibles does the person come with (i.e. work ethic, contacts, what-have-you)...

blah3142• 13 years ago

You know, you're making a good case for techies publishing their current salary/day rate. In a sellers' market disclosure should drive prices up.

minimaxir2• 13 years ago

That would only work if everyone discloses. Prisoner's dilemma.

rcoder• 13 years ago

Three things:

First, most recruiters/hiring managers ask for current comp (or at least a salary range) early in the discussion, so it should be easy for them to offer well over someone's current pay. This simply removes one bargaining tools (lying about current comp) for an employee considering a move elsewhere.

Second, matching outside offers very quickly becomes a slippery slope. Anyone who figures out that such a policy exists will quickly come to the realization that the easiest way to get a raise is to put themselves onto the market. That's toxic, not to mention unsustainable.

Finally, equity. The one-year cliff exists for a reason, and if you're playing for keeps with an early-stage startup, you're probably expecting (or at least hoping) for your ownership stake to be worth a lot more in the long run than your salary.

JonFish856• 13 years ago

First, most recruiters/hiring managers ask for current comp (or at least a salary range) early in the discussion, so it should be easy for them to offer well over someone's current pay. This simply removes one bargaining tools (lying about current comp) for an employee considering a move elsewhere.

Currently this screws "Niel" (to stick with the example). He wants to move someplace else and is convinced that he is worth $140k. He's convinced he's underpaid right now. He interviews at, say, Google (random example), who does a bit of research and hey, he's only making $88k. Suddenly they don't have to offer him market rate, they only have to offer him a raise on what he makes now.

Obviously this only works if one company (Google in this example) isn't as open about their salaries.

angrybits2• 13 years ago

I don't disclose current comp unless/until it benefits me in the negotiations.

CodeMage2• 13 years ago

First, most recruiters/hiring managers ask for current comp (or at least a salary range) early in the discussion, so it should be easy for them to offer well over someone's current pay. This simply removes one bargaining tools (lying about current comp) for an employee considering a move elsewhere.

"Lying about current comp" is not the only tool for an employee considering a move elsewhere. Nor is it, in my opinion, the best tool for that.

You can get pretty good results by refusing to disclose your current comp and it has an added benefit of keeping you honest. Open salaries would ruin that negotiation tool.

Also, matching outside offers is not necessarily a slippery slope. Not everyone who gets an outside offer and considers it is motivated by pure greed. Sometimes people's situation changes and they would prefer to stay at the same company, but the company needs an additional incentive to meet their new requirements.

For example, if you really like working at company Foo, but you just had a kid and you're noticing that your budget is too tight for your peace of mind, you might need a raise. Now, you might be an asset to your company and your boss genuinely understands your situation, but he or she simply doesn't have enough leverage to give you a raise outside the regular process. If you have an outside offer, that gives your boss the leverage and you might be able to negotiate a raise that would allow you to stay. And if they truly can't afford it, you have the choice of accepting the outside offer.

DominikR2• 13 years ago

Let's say I'm a competitor, and I find that Niel (randomly picked) is someone I want to hire. All else being equal, I offer him $100k (website says he's making $88k). He comes to his boss to say "I like it here, can you match it?

This happens all the time anyways, hiding the salary of the employee isn't going to make any difference in most cases.

And is it so hard to guess what some (say iOS engineer) earns? The salaries that Buffer pays are in the range of what I expected them to be anyways.

What if I have a very specialized skill that doesn't fit nicely into your matrix? Let's say market pay for my skill is $200k. Do you create a new category for me? Do I get dirty looks from all of my co-workers because I have a valuable skillset that most people don't?

I'd expect the founder of the company should be able to justify paying someone $200k to his employees when he can justify this to himself and his investors.

I mean it's not like anyone will be blown away by the fact that there are people (VPs, managers) that earn 3x to 100x of what they earn themselves.

What is your fear? That the employees will seize the property of the company and turn it into a communist collective?

JonFish856• 13 years ago

No, the fear would be that employees look at someone with a 3x salary differently than they would if they didn't know what his salary was. It's just a distraction. I don't know how much my boss makes. It could be half what I make, it could be triple. I don't really care. If I found out suddenly that it's triple what I make, then maybe I'd look at him differently. Does he bring in 3x value to the company compared to me? Maybe in my opinion he doesn't--do I talk to the CEO to say "hey, we can replace this guy cheaply"? It just seems like pandora's box at that point.

thenmar• 13 years ago

I think the fear is that it will create animosity by making the information so accessible. On some level, the junior-level dev knows he's not making as much as the guy with the PhD in an esoteric mission critical topic, but he has a kind of plausible deniability that lets him avoid thinking about it. If everyone's making 80k and everyone knows that Jane The Expert is making 300k, there's going to be friction. "Hey Jane, why don't you pay for the dinner."

kenrikm• 13 years ago

Why is a Senior iOS engineer (Andy) on a "Intermediate: 1.1X" multiplier? - you can't be Senior and be intermediate in my book. Seems he needs his multiplier upped to the proper level. $107k is low for a iOS Dev in the Bay Area.

angrybits2• 13 years ago

With closed salaries, you don't have to justify anything to your employees. They are called employees for a reason.

sliverstorm7• 13 years ago

Of course on the other hand it could mean your salary haunts you during future interviews and at future jobs. Salary Negotiation 101 is, don't tell them what your old salary was, right? But now the cards are all on the table, and they'll try to say "Well, I see you made $X, we'll beat that by 4%"

pdovy• 13 years ago

I think a big part of the problem is that people generally aren't good at judging the value of other's contributions unless they are working directly with them or managing them (and even then, hit or miss).

Having salaries be completely open invites comparison even when there is a lack of information. Bob the Developer in XYZ team makes 20k more than me, is that fair? Maybe, but I don't really know, and I can see that creating friction with the right (wrong?) personalities.

mdesq• 13 years ago

In negotiation, typically the party with the most information has a better negotiating position. Posting salaries is a significant piece of information that will almost certainly help a competitor since it greatly reduces the cost of them acquiring the knowledge.

vladimirralev• 13 years ago

This matrix makes sense if you hire your team to be of roughly equal performers (within the seniority range) who value honesty. I doubt they will ever hire a 200K person, because they made a business decision that they don't need one. Even if they need one, they can always review the matrix and add flexibility. It takes a specific approach to hiring when using this structure.

There are some significant advantages in building an open team like this. People know what's their pay-grade and what part of the company they actually represent. If they don't think their cut is fair they can signal it. Many companies have confidential salaries so even when you know you are underpaid you can't argue it without throwing peers under the bus for revealing their salary to you.

pbreit• 13 years ago

I don't really care for it myself but I think one thing is that they are creating a culture that is disinclined to acting as you describe (ie, salary pumping).

scythe• 13 years ago

What if I have a very specialized skill that doesn't fit nicely into your matrix?

Oooh, or what if there's a dragon[1], and I need to be paid extra money so I can spend it on dragon-slaying gear? If you really deserve extra money, the conversation goes like this:

"Why do you make more than me?" "Because my job is harder."

Fun fact: you're not that special. Wage secrecy is good for skilled negotiators and bad for everyone else; being a skilled negotiator does not, however, ethically or morally entitle you to make more than other people. It just allows you to get away with it, and it's trivially unfair.

[1] http://www.imdb.com/title/tt2207833/

kazagistar2• 13 years ago

Dunno, if person A goes to gets a PHD in distributed systems and spends 40 hours a week furthering their knowledge of computing topics, while person B spends 6 years after university uninstalling viruses from windows computers, and spends their time after work watching cartoons, it seems very plausible there would be a significant difference in their worth to a company due to a significant difference in skills, even if they are both hired on as "developers".

mathattack3• 13 years ago

This sets a terrible precedent. I've been in places where people knew they had to get a better offer to get a raise, so the entire office was job-hunting. Much better to figure out some benchmark ("To get the best folks we pay in the top quintile and insist on no OT" or "We pay modest base salaries, but give double the usual equity to share upside and incent people to act like owners") and then stick to it. Top people will rarely leave for a small raise, though they will leave over disrespect or boredom.

wpietri5• 13 years ago

As a boss I'd love this.

It's my job making sure everybody is paid fairly. If Niel came to me and told me about a competitive offer, I'd say, "well, let's look at the market; maybe we've fallen behind." And then we'd sit down and refresh the data that drove our current pay levels. If things had changed significantly, then it would be time for raises. If not, then we'd talk about why a company might be paying well above market, and whether it's the right choice for Niel to go there.

For specialized skills, yeah, a new matrix category's the obvious fix. If co-workers are the kind of people that freak out at market economics, then it means we're not educating them well, so that's something worth fixing.

I think it's important to remember that secret salaries rarely stay secret, so the choice isn't between full knowledge and zero knowledge; it's between full knowledge and half knowledge plus substantial speculation.

umsm3• 13 years ago

I don't think that many bosses think like that.

What if the company is not that profitable, can you still stay competitive? Are you willing to risk the future of the company?

dllthomas• 13 years ago

A possible approach by the boss would be to 1) see if there is flexibility to provide more within the current system (maybe Niel is more "senior" than we had recognized?), and 2) see about tweaking the formulae so everyone (or at least everyone with overlap with Niel) gets more. You may not be able to make up the whole difference, but you might not have to, and I expect very different social results than "we're paying him more to stay".

I've no particular confidence this would work well, but it seems a consistent approach that has some potential.

manicbovine3• 13 years ago

When you run a company, you just assume that your competitors know the pay structure. It's trivially easy information to discover (through interviews).

zmitri5• 13 years ago

I have a question: Why would the founders take such high salaries?

Seems to go against everything I would think was important for a company that is venture-backed.

sgk2842• 13 years ago

Their salaries are actually still fairly low. An engineer in SF can easily make more than $150k base per year.

Venture backed companies should pay their employees well though. If you're worried about food / shelter or constantly wondering if a shift in jobs would give you a disproportionate gain in quality of life then you're not focused on the startup. The biggest advantage of raising a lot of money is so that you can pay a lot of money and not have your team worrying about "I'd have loved to do that trip to Paris, but can't afford it. If I quit for Google, then I'd be good to go.

That said, I'm a believer that founders shouldn't be the highest paid employees.

BadassFractal2• 13 years ago

Frequently, and I'm not saying it's Buffer's case, it's to offset the fact that founders have gone, possibly heavily, into debt over years of not paying themselves a salary.

ronaldx• 13 years ago

Why wouldn't founders take such salaries, which are not outrageous?

Saying that founders shouldn't take a fair salary - comparable to what they might get elsewhere - puts them in a untenably risky position that would limit the pool of founders to the independently wealthy and the foolish.

That limitation would not be to the benefit of the backers.

dinkumthinkum7• 13 years ago

Compare what $158K is in terms of adjustment in other cities. It is not very much money for a skilled worker.

thesausageking3• 13 years ago

Because they can. They've only raised a small angel round, so have no investors telling them what their salaries need to be.

benihana• 13 years ago

This sounds like absolute hell

Every internal email sent between any 2 people on the team has a certain list cc’ed that is accessible for everyone: For example if 2 engineers email with each other, they cc the engineers list, if it’s people on our customer support team they have a support email list cc’ed. Stripe was a great inspiration for this. (More about this)

Openness and transparency and honesty are great. But this seems like it's removing privacy, which sounds very tiring.

danso2• 13 years ago

At one level, you are right...anyone with experience in covering gov't knows that employees have long since stopped using their official email for dicey business, e.g. Sarah Palin http://en.wikipedia.org/wiki/Sarah_Palin_email_hack

But an effect of this "you're being watched" is that you will modify your behavior to at least meet the spirit of the law, and this modificAtion can be I itself beneficial. Trivial example: I used to cuss a LOT...but volunteering in family friendly jobs forced me to not do that, or at least start using "gosh" and "shucks". I found out (as Orwell might attest to) that my mood overall improved without reverting to the negativity so reflexively.

In the case of Buffer...OK, some kinds of very important communication may be stifled. But a whole lot of non productive behavior (idle chatting via email) may be stifled. And then there are benefits of transparency, in which everyone realizes they have to start out in a consensus building mood.

And for the cases where you need to take someone to the woodshed, so to speak? Do it in person. That alone mitigates some problems that come from misinterpretation through the written word

ryanSrich• 13 years ago

And that's completely ignoring the shitstorm of emails one would recieve on any given day. Email is a drain on productivity and this seems like it would make it even more so. Having access to conversations between parties is nice but please don't send me meaningless emails all day long.

wmeredith2• 13 years ago

A list everyone had access to was CC'd. I don't think everyone in the company is CC'd on every email.

rch• 13 years ago

It's not so bad. As a one time academic employee, my salary was published openly by law.

joeframbach• 13 years ago

I would last 5 minutes with that policy. First order of business would be writing an email rule to delete anything that's not specifically sent directly to me.

untog2• 13 years ago

It also seems like a bad use of technology. If any engineer e-mail also has to be CCed to the list then you should use a discussion board, or a chat room, or... anything that doesn't mean spamming everyone's inbox.

taybin• 13 years ago

Wouldn't this just lead to people emailing less and having private discussions face to face? We're humans and we have drama and we need to vent from time to time.

dinkumthinkum7• 13 years ago

Shhh ... don't bring up the real world on HN. :)

kapilkale4• 13 years ago

Seems unwise to have a CEO co-founder be the highest salaried employee at a startup.

That person's equity position is probably at least an order of magnitude higher than the other employees. As an investor or employee, I'd find this alarming.

http://techcrunch.com/2008/09/08/peter-thiel-best-predictor-...

Call me old fashioned, but I think co-founders should be paid living expenses + 25%, even in a series-A funded startup.

runako• 13 years ago

> co-founders should be paid living expenses + 25%, even in a series-A funded startup

It's risky to comment without knowing the specifics of Joel's situation. But it seems that his $158k salary isn't outside those bounds if he lives in e.g. San Francisco or NYC. Hard to know someone's living expenses without drilling way into their personal financials, and again this is not unreasonably high.

Thiel, from the link you posted:

> What’s the average salary for CEOs from funded startups? Thiel was hesitant to answer, but eventually said “$100-125k.”

That was in 2008. Adjust for rent inflation, and that should square the numbers for you.

kapilkale4• 13 years ago

Sure, that's a generalization. There are tons of exceptions where my generalization doesn't apply. But that isn't the core of my argument- its a postscript.

The math the company has laid out says that CEOs should be paid more than any employee in a company, even if they are founders and have a controlling equity stake. I'm simply saying that if I were an investor or employee, I would find that concerning.

zmitri5• 13 years ago

I worked in finance and made less than that in salary.

It's enough for a luxurious existence in NYC provided you don't have children. I'm not sure whether or not they have children, but that's a lot.

BadassFractal2• 13 years ago

In SF, close to 50% in taxes, cost of living in SOMA, assuming you want to live right by your office (what is it, 3k for a studio?) and those 160k will not get you very far.

oijaf8882• 13 years ago

What if the company is profitable? Should CEO co-founders still be paid the bare minimum to live? (living expenses + 25% works out to living expenses after taxes) If they are burning investor money and will require 2-3 more rounds to become profitable, then it would be a pretty big negative.

beachstartup• 13 years ago

$100-150k for chief officers at a startup is a completely reasonable salary.

similar salaries at established, larger companies run into the 250-500k range.

csmajorfive• 13 years ago

I came here to say this. A founding CEO should never have the highest salary in the company. Value your own equity more!

joelgascoigne3• 13 years ago

Joel here. This is a really interesting point, I've thought about it a lot.

From the linked article:

"In Startupland, everybody should be working towards the same goal: that big juicy exit. That’s the only payday any CEO should be worried about (even though more than half of them will never get it)."

I can't agree with that, and this is a key reason I spoke with others in the team and we decided that my salary as well as other c-level salaries should be quite high at this point. We're not planning an exit anytime soon.

Until a day ago, my salary was $118,000. In the first year, my salary was zero and in the second year it ranged from $55,000 to $75,000.

We're at a point with Buffer where there's a massive opportunity, and I'm going into my 4th year now. At $2.3M ARR and being cashflow positive (revenues cover the salaries) we're in growth mode and this isn't investor money we're using to fund these salary levels.

I completely agree that in the early years this would be a big red flag. I think the further you go, the more that notion reverses. I've heard that it can be a red flag if the CEO is not paid enough.

Would love to hear any other thoughts here, it definitely was a tough decision to make and I'm glad that by putting this out there we get all this valuable feedback.

kapilkale4• 13 years ago

Hi Joel- thanks for being open to the feedback.

Like you said, you are in growth mode. To me, growth mode means reinvesting as much of the profits as possible back into the company. Paying yourself a large salary during this time is the same as taking money off the table.

There are some good reasons to take money off the table, like paying back personal debt or supporting family members. But paying yourself more because you're the CEO doesn't seem like a good one, because your equity position is so significant.

If you don't have a good reason to take money off the table, it signals to employees and investors that "Joel thinks the money is better spent going into his personal bank account vs. making the company's equity grow in value." That sort of logic doesn't work in a startup that is targeting high growth, where employees are hoping to receive some sort of payoff from their equity. Moreover, it casts doubt on your judgment in capital allocation, which is one of the most important responsibilities of a founder / CEO. *

Obviously, all of this logic falls apart if you're not working on a startup. Low growth businesses that have achieved much of their potential are a totally different story. But you aren't starting a restaurant. Even Uber, at its $4B valuation, is giving compensation packages that are weighted towards options vs. salary.

* http://www.amazon.com/The-Outsiders-Unconventional-Radically...

madaxe_again• 13 years ago

We're not planning an exit any time soon, and are in growth mode, and we, the founders, take salaries slightly below the company average.

Why? Fairness. Our employees produce value, and we pay them justly for it. Excess value is retained in the company, and used for growth. The company, whether or not we choose to exit, is an asset owned by us, the founders. It's not a liquid asset, no, but it can be used for secured debt (i.e. borrowing against the value in the company), should we choose (we haven't).

We've been cashflow positive since day one and have revenues somewhat higher than yours. We've never taken investment.

For the first three years, my salary was £6k. Just enough to afford to eat and live in a squat. For the next three years, it was £22k. For the last two, it's been £30k. Our highest paid engineer is at about £60k basic - and we're not in London or a big city.

I guess at the end of the day it's a cultural call, and a personal one, but from my corner, I wouldn't be comfortable earning more than the folks who're doing the on-the-ground production, as we're not here to earn salaries, we're here to grow value.

jackgavigan• 13 years ago

I would agree that founders of a startup should be taking a relatively low salary. However, Buffer is no longer a startup (using Steve Blank's definition: http://steveblank.com/2010/01/25/whats-a-startup-first-princ...). It's generating significant revenue and is break-even from a cash-flow perspective.

Investors don't necessarily want founders to pay themselves the absolute minimum because they want the founders to be happy and focused on building the company, instead of being distracted by money worries.

rmason• 13 years ago

I wonder in five years looking back whether Buffer getting hacked or their 'transparency' will have hurt them more. I am betting the latter.

Do they really think they can ban private emails between engineers? it would have been much easier to simply load eavesdropping software on their computer if management doesn't trust them.

I really like Buffer but I'm a little worried about them.

jcampbell1• 13 years ago

Also introducing open revenues and semi open profits.

Implied Revenue: $2.0M [1]

Total Salary: $1.7M

[1] ((158.8 - 22)/1.2 - 75×1.2)/12

fantastical• 13 years ago

Close: http://open.bufferapp.com/buffer-november-update-2347000-run...

Euro_IT_drone2• 13 years ago

Just trying to compare here with my European salary.. How much of this do you get to take home, ie. what part of it can you spend on food, clothing, housing etc. after takes? What about health insurance, is it provided for?

svachalek• 13 years ago

Social security tax is 7.5%, with an annual cap of $113k (taxed) Medicare tax is 2.9%. Federal tax is very complicated but probably in the range of 20-25% for most people. State taxes vary by state. In California it can end up being a third of your federal tax. You really need to save about 10% for retirement. Health insurance may or may not cost you money. Typically it will cost at least a few $thousand/year.

Having talked to a few Europeans about it, my impression is that both the raw salary and the % you keep are quite a bit better in the US, for professional workers, and that most goods cost less. But you are expected to work more hours with less time off and if you get sick or hurt or something really bad happens to your company/town/industry, good luck to you. There are "safety nets" for most of these things but they have a lot of holes in them.

TheCoelacanth2• 13 years ago

It depends on a lot of factors, but most people making that level will probably pay a total of about 30-40% in taxes. Health insurance will almost always be provided at this type of job.

mikegreen• 13 years ago

Roughly - Expect someone making $100k in the SFO area (high state and taxes compared to many parts of the country) to pay about 20-25% in a few federal taxes, and 8-10% in state taxes. So the take home pay would be around $65k-$72k, before any retirement contributions etc.

In the US, healthcare is provided in a professional/fulltime position like these (maybe not the bootcampers). Figure $150-300 a month for healthcare if contractor or not-provided.

Euro_IT_drone2• 13 years ago

Okay, thanks for the info. I have health insurance (great nationwide social security, and additional health coverage for me and my partner provided by my employer), a company car (audi a6) with fuel card and make about the same as the CEO, but pay close to 50% in taxes. Still, not that bad at all apparently... (Even though it's hard to compare. Cost of living, vacation days, all make a difference.)

suprgeek• 13 years ago

Excellent concept - but one major Caveat. Why in the world would you publish it for all the world to see?

Keep it internal to the company - you have an expectation of privacy from your employer and this post just ruined it completely.

I hope they got written signed releases from every one of those folks whose private info they broadcast to the world.

bjpless• 13 years ago

Seconded. Hard to imagine all employees signing off on this release for the sake of a HN article. But I hope that they did. I would be very upset if my salary were published unbeknownst to me.

swombat4• 13 years ago

You would only be upset because you currently work in a company with a culture that doesn't value transparency as a core value.

If you worked in a company like Buffer or GrantTree, you'd be wondering why others are so secretive about their salaries, and find yourself more and more disliking the idea of working for a company which is not transparent.

Habit is a powerful thing. Change your surroundings and you'll change your habits.

cmwelsh• 13 years ago

It's not hard to guess what a software developer is making these days (hint: a lot).

sokoloff• 13 years ago

Yes, but $120K, $240K, and $360K are all "a lot" to different people, are all plausible software dev total compensation numbers, and yet people would still perhaps think differently if they knew their friend made 1x, 2x or 3x $120K.

haversine• 13 years ago

Agreed. I think this should have been anonymized outside of Buffer.

There are so many possibly repercussions with family, friends, and outsiders, in addition to the things brought up by other posters re: poaching, etc.

I personally wouldn't want my salary revealed publicly because my family would treat me differently as a result (I know this from experience).

If this idea spreads, it wouldn't be long before someone comes up with a way to API this data into something like LinkedIN or Monster. "Joe makes $100k at CompanyX - is it time for a change?"

Internally to the business though, this seems to have a lot of positives. I'll be interested to see how this evolves at Buffer.

philip1209• 13 years ago

I think it's bad that they are essentially publishing whether an employee opted for additional stock or additional cash. Should it be a red flag that the CTO turned down stock in favor of more cash?

umsm3• 13 years ago

Why should it be a red flag?

Statistically speaking, you're more likely to make more money by getting a bigger salary now instead of a big payday that may never happen. Statistically, very very few companies will be large enough for employees to cash out.

elwell• 13 years ago

http://open.bufferapp.com/introducing-open-salaries-at-buffe...

(wait for it to load and take you to the specifically linked comment)

dinkumthinkum7• 13 years ago

They might as well force the employees to disclose what they spend the money on.

ckeck• 13 years ago

Federal Government employees have their pay publicly visible, at least many of them. Some Universities do the same. I'm not sure why this is so mind-blowing for some.

Also, keep in mind that they clearly set the opposite expectation about privacy with their employees and (from what they say), cleared it with everyone first.

yogo• 13 years ago

Given the fact that federal employees are paid by tax payers (the employer) then the tax payers should know how much they are paying them.

dangero• 13 years ago

Wow, an Android engineer making less than 100K that's crazy to me, but I'm not that familiar with UK salaries I guess.

agilebyte• 13 years ago

London is special, from http://www.itjobswatch.co.uk/:

  45k for Android UK average
  55k for Android London average

  10k GBP is 16k USD

benaston2• 13 years ago

Suspect the weak mean salaries in London are due to the fact that many (most?) senior developers move out of the permanent jobs market into consulting/contracting (which, I hear is not par for the course in other nations).

esja• 13 years ago

As they grow they will need to hire more people. I wonder whether this policy will prevent some otherwise excellent hires from joining them.

zhuzhuor• 13 years ago

I found one thing interesting is that only 4 out of 17 people choose equity over $10k salary. Even CTO chooses salary.

I am curious if this is common in startup companies, since I have never worked in startups.

jacobquick• 13 years ago

Paying those salaries in San Francisco, there better be a giant pile of equity either way.

tootie2• 13 years ago

I used to work in government (US municipality) and every single employee's salary (10s of thousands of people) was public record.

caseydurfee• 13 years ago

Likewise. For example, salaries for all City of Seattle employees are here: http://lbloom.net/xsea11.html

icambron2• 13 years ago

I actually love the radical transparency here, even after reading all the warnings in the HN comments.

What I like less is the salary formula. What's going to happen is that all of the negotiation is going to get packed into the experience and seniority multipliers. It creates the illusion of rigor and possibly does more harm than good.

joelgascoigne3• 13 years ago

This is a really great point. We don't see as much negotiation as might be expected, however what you say is definitely true to an extent.

How do you think we could improve that aspect?

icambron2• 13 years ago

I'd just drop the formula altogether, I think. If at the end of the day, the numbers are just worked out so that you and the employee agrees the salary is about right ("I want $x, so I guess I'd better get a 1.3x experience multiplier"), then just make "work out the salary such that you and the employee agree it's about right" the policy. The transparency keeps these negotiations simple and fair; for example, pushier people won't get more raises than their shyer colleagues because everyone will notice and act accordingly (including you, who will find it easier not to give pushy people those raises when they're posted on the company website).

freyr• 13 years ago

Many people here are picking on the senior developers salaries, hovering right around $100K. Maybe this isn't a particularly competitive startup salary, but note that salaries are tied to revenue.

If the company's revenue grows significantly, their salaries could become much more attractive. If, for example, revenues grow from $2M revenue to $20M revenue, senior developers would see their salaries increase by $54k or ~50% over this time.

It could be argued that 10X growth or an $18M increase in revenue is unrealistic for a tweet scheduler, but that's for the employees to determine.

vladgur• 13 years ago

Wow, these salaries seem to be pretty low. I mean a senior IOS engineer making $107K in SF? Id expect them to easily increase their salary by 30% by jumping ship.

riffraff• 13 years ago

I was thinking that they seem disproportionately high for some of the other locations (45k$/year in hanoi is a _lot_ of money)

fideloper• 13 years ago

I'm really happy to see companies offer equity vs higher salary. As someone is almost 30 (read: less willing to take the chance that equity will result in future money), I feel that's a great choice to offer employees.

jaboutboul• 13 years ago

Not the smartest thing in the world to do, publish people's salaries and twitter accounts, especially in this day and age where privacy is virtually non-existent. I hope everyone agreed to publicly disclose the salary information.

overpaidprobly• 13 years ago

Does anyone have an opinion on how these numbers square with market rates?

I make $113k/year as a juniorish engineer at a VC backed startup in SV. Am I hilariously overcompensated?

rpedela2• 13 years ago

$113k/year for a junior engineer is definitely overcompensated even for SV. Congrats. :)

software engineer 1: http://www1.salary.com/CA/San-Francisco/Software-Engineer-I-...

software engineer 2: http://www1.salary.com/CA/San-Francisco/Software-Engineer-II...

simoncion3• 13 years ago

It seems that market rate for a junior (0->2 years experience) web developer is ~$110k + benefits. You are not hilariously overcompensated.

Ignore the various salary estimate sites. There's no way that they have an accurate view of the world.

krisgee• 13 years ago

Are you serious? I'd feel like a fucking idiot walking out of university with a brand new degree and demanding 100k off the bat. I guess the market is different outside SV though right?

sgk2842• 13 years ago

Nah, that's pretty standard if not a little low. Without any change in experience, you could probably get up to $120-$130k with a little shopping around.

smm20002• 13 years ago

You make what you should make in SV - I think 100-120 base is about average for new hires. Guys at Buffer are underpaid though.

rpedela2• 13 years ago

What is a happiness hero?

tikhonj• 13 years ago

I've always felt the culture of hiding salaries was doing a significant disservice to employees. It creates a significant and largely artificial information disparity, giving a major market advantage to the employer. In turn, this makes the entire labor market less efficient for the employee.

This also makes the employer less accountable to the employees. The employer can easily pay somebody significantly more or less than they contribute, and the rest of the team cannot really say anything about this.

Now, there are some cultural reasons to do this--preventing jealousy, hiding inequality. But it really feels like a social band-aid, a temporary solution hiding the symptoms but not the underlying problem. Besides, everyone ends up having a reasonable guess as to who makes more and who makes less anyhow! The same dynamics develop, just with more uncertainty.

On the other hand, making salaries public takes these problems head-on. Inequality isn't bad in and of itself; some is basically necessary. But hiding that fact doesn't really help anyone. Instead, forcing people to see it head-on, deal with it and talk about it is probably a better solution.

I really applaud Buffer and the general movement towards transparency. I think it's a very healthy cultural progression and hope it catches on more widely, so that people stop having knee-jerk reactions to salary information.

EDIT: As an interesting additional note, all salaries (beyond a token minimum) at Berkeley (and the whole UC system) are publicly available at http://ucpay.globl.org/.

I've looked up various professors at the ParLab (where I did some undergraduate research). The fact that their salaries range from ~120k to ~350k did not change my perspective of anyone and did not seem to affect the lab's culture at all.

Essentially, I'd be perfectly happy to see this outside of public universities.

mrjatx3• 13 years ago

I disagree completely. You should, as the potential employee, be well aware of the market pay and what you are willing to be paid to perform the job that you're applying for. Not to mention their job postings actually list a salary window ($88-110k for Backend/Frontend). What the person sitting next to you is paid should bear absolutely no impact on your life or your work ethic. If you're happy to make $88k and the guy doing the same job next to you is making $110k, I don't see any problem. Maybe he has a few more years of experience than you, maybe he's a better negotiator, maybe his suit looked nicer. The point is that you accepted it and were willing to take that salary for that position.

I can't fathom what being aware of your coworkers salaries could possibly do for positive team building. Somebody is going to be upset, egos will be triggered. Yes, in day to day business we're typically aware of the fact that an engineer or programmer makes more than a customer support or cashier. But here it's thrown in the employees face. "John sits next to me, he takes 3 hour lunches and he's paid $110k! I can't believe it. Screw John!"

Show up to work in a new Porsche sometime and while some people will think it's the coolest thing ever and give you a pat on the back, jealously may rear its ugly head with others.

I just don't see how this is a positive thing in the least.

steveklabnik3• 13 years ago

How can you determine market pay when salaries are private?

You end up with what we have now: looking at what companies post publicly for salary offers. Some companies don't publish those numbers publicly, and that's only 'new hire' salaries. So it's inaccurate.

lancewiggs• 13 years ago

If you're happy to make $88k and the guy doing the same job next to you is making $110k, I don't see any problem

One problem is that the first person is often female, not white or foreign.

Another is the demotivational effect when the first person eventually does find out they are underpaid versus colleagues or the market - and they generally do. And then they will leave.

It gets worse when the lower paid person is clearly outperforming the higher paid person, or where the higher paid person is clearly under performing.

And finally it's just not the right thing to treat people unfairly versus their peers. If the lower paid person is being underpaid then quietly fix the issue.

maaaats• 13 years ago

> You should, as the potential employee, be well aware of the market pay and what you are willing to be paid to perform the job that you're applying for.

Yeah, well, not easy when everyone is hiding it. All info I can get is too generalized.

Volscio• 13 years ago

"I can't fathom what being aware of your coworkers salaries could possibly do for positive team building."

Everyone knows what each other makes in the Army. When I was in, we never talked about relative pay at all. We didn't need to.

Oh, and we had tons of positive team building. :)

dinkumthinkum7• 13 years ago

I have you ever thought that maybe human beings are not computer programs that you have written and so therefore there may be a reason someone may be unhappy someone sitting next them makes 20% more for the same work? You act as if it is some logical fallacy because you were naive enough to accept the smaller amount or something. I'm not surprised. This kind of reasoning is very common on here.

Dartanion7• 13 years ago

Exactly. I know precisely what I'm worth because I poll the market frequently. I don't need my employer to push mandatory transparency to know what I'm worth; in fact, I feel the informational asymmetry actually benefits me, because my employer doesn't know how much it'd cost to replace me (unless they're interviewing potential replacements as often as I'm speaking with recruiters / getting inbound interest from other companies, which they're probably not, because it's expensive and time consuming) yet I know exactly how much I can fetch elsewhere. So when I negotiate for a salary increase, the employer assumes all the risk in the transaction.

conanbatt2• 13 years ago

If you dont have a problem with someone making more or less money than you in the same company as you, why would you ever mind to make it public.

Is it because you fear people will resent you if they know your salary? Are you getting bullied by your HR department because of it? I doubt so. If someone makes a decision because of he has more accurate information, i have to believe its going to be a better decision.

This is a very basic case of information asymmetry and it always benefits the one with more information.

Do I agree with showing salary by name? I dont, so directly. But the mindset on the policy is healthy and can only sin from being naive.

aestra3• 13 years ago

There are plenty of people already aware of their coworker's salaries; government employees, including military. It isn't like you don't know some salary info, you know your boss gets paid more for example.

You should, as the potential employee, be well aware of the market pay and what you are willing to be paid to perform the job that you're applying for.

And when you know what everyone makes you have a much better grasp of the market pay, and if what you were offered was fair. If they tell you "we only pay x" you can only take their word on it if they are keeping their salary data private. If not you have more room for negotiations.

And your example of unfair pay doesn't jive well with me. It is still wrong to take advantage of someone just because they let you take advantage of them. I think a lot of cases of grossly unfair pay fall into that category.

We are dealing with adults here.

http://www.cbsnews.com/news/my-boss-revealed-everyones-salar...

http://www.cbsnews.com/news/what-if-you-knew-everyones-salar...

http://www.cbsnews.com/news/why-are-salary-ranges-secret/

davemel373• 13 years ago

I had a boss bully his employees with fellow employee salary information. (i.e. bill took a pay cut because of the recessions, so should you...)

As far as I'm concerned, salary is a completely private matter that is no one elses business, and no good could possibly come from sharing it.

I see this openness at buffer essentially being a tool for management to deny raise requests, etc... with... If we do it for you, we have to do it for everybody... which is a just a BS excuse to not face the reality that every persons value and work situation is different, and should be treated differently.

Arnor3• 13 years ago

Edit (add quote for clarity) > I see this openness at buffer essentially being a tool for management to deny raise requests, etc... with... If we do it for you, we have to do it for everybody...

More likely, the response would be along the lines of: "You'll get a raise when you qualify based on the criteria that have been clearly explained to you and the rest of the world."

mathattack3• 13 years ago

I had a boss bully his employees with fellow employee salary information. (i.e. bill took a pay cut because of the recessions, so should you...)

If you see this, it is time to run. Fast. Very fast. Unless salaries are completely open, they should be confidential.

city412• 13 years ago

Private salaries are a benefit for those who know how to take advantage of them and push the boundary on their pay. They are a disadvantage to those who don't or don't want to. So it really depends on which type you are. Buffer will likely attract those who don't like to play this game, and just want fair pay for good work. It could even have the effect of attracting people who truly like and want to be at the company.

Neither approach (public or private salaries) is perfect.

rguzman• 13 years ago

I see this openness at buffer essentially being a tool for management to deny raise requests, etc... with... If we do it for you, we have to do it for everybody... which is a just a BS excuse to not face the reality that every persons value and work situation is different, and should be treated differently.

Their salary formula accounts for experience, company performance, and role. Having the openness and formula makes it easy to say no to arbitrary salary-increase requests and also makes it easy to have a fair raise in place "automatically". Sure, the formula is not perfect, but as the zen of python goes, explicit is better than implicit. Changing the formula or the parameters to it may be a wise thing for the company to do at some point, but it will likely be clear what the change is and why is it beneficial to the company. That sounds a lot better than the way that salaries are typically negotiated.

grecy5• 13 years ago

It creates a significant and largely artificial information disparity, giving a major market advantage to the employer.

Absolutely.

Having employees not discuss salary is all about the employer having more power/control, and the employees having less.

I've always thought it's a little like an adult giving candy to a child and then say "Now, don't tell anyone I gave you this!".

Why doesn't the adult want anyone to know about the candy exchange? Because they benefit from keeping in concealed.

EDIT: I also think this is a generational thing. Everyone I know over 40 wouldn't dare talk about their salary, or how much they paid for their house, etc. Everyone I know under 30 will happily talk about it to anyone and everyone. Give it a few more decades, and this will be the norm.

laureny2• 13 years ago

Having employees not discuss salary is all about the employer having more power/control, and the employees having less.

You seem to imply that just because the employees know all the salaries, they have more control. This is not accurate.

They have more knowledge but certainly not more control.

If anything, the fact that the salaries are the result of a simple equation means that the employees have close to no control over the money they make. Also, a lot of factors contribute to the productivity of an employee, most of which cannot be accounted for in a simplistic equation, things such as working long hours, working on weekends, good attitude, willing to take on unpopular tasks, etc...

jakejake2• 13 years ago

I suppose it is true that when we turn 40 our brains rot. All we care about is keeping kids off of our lawn and catching the early-bird special.

Many people don't like to share their salary - not because they wouldn't "dare" as if they are cowardly or not as enlightened as you. Some people find talking about personal salary or wealth to be distasteful - like a braggart yammering on about his expensive possessions. If you have no economic diversity in your group of friends then it's probably no big deal, but otherwise you likely are making people feel ashamed and unsuccessful. Some people might feel it's rude and unnecessary to discuss your salary unless there is some reason to do so.

I don't personally have a problem with a fair and consistent formula for salaries within a company, and people within my company may be able to deduce what I make. It's not a power trip thing. But I don't really want my salary mandatorily posted on the web for every random friend or stranger to investigate. Unless I'm working in the public sector it's my own choice and my own business.

hnriot• 13 years ago

"Everyone I know over 40 wouldn't dare talk about their salary, or how much they paid for their house, etc. Everyone I know under 30 will happily talk about it to anyone and everyone"

That's because they (the <30's) grew up with FB and are used to sharing everything with the world.

sliverstorm7• 13 years ago

I usually hide my pay these days. Last time I shared with someone I worked with, who it turned out made a fair bit less than I did, the guy got mad at me. I stopped sharing.

manicbovine3• 13 years ago

It also breeds malcontent and unethical behavior. My last employer gave me a very hefty raise while (unethically) telling everyone else that there was a pay freeze.

Unfortunately, the payroll person was a gossip - the incident undermined my leadership and put me in an extremely awkward position. I'm happy to have left that shady startup.

VexXtreme• 13 years ago

At my company discussing salary is grounds for instant termination. It's specified in our contracts. People still talk though.

steveklabnik3• 13 years ago

This is probably not enforceable: http://www.lexisnexis.com/legalnewsroom/labor-employment/b/l...

abalone• 13 years ago

A slight problem with that thesis is that employees are generally not forbidden from discussing their salary.

Rather they choose not to. Some consider it personal info. Maybe they shouldn't, but they do.

From that perspective, this could feel like the company forcing a decision on their employees that they would rather make for themselves. I would be a little concerned about injecting a culture with that.. it's a bit paternalistic.

aestra3• 13 years ago

Employees are generally forbidden from discussing their salary. Most places I've worked, it has been told to me at promotion and raise time not to disclose my salary to other employees. It probably isn't enforceable however, just the goons trying to keep that info private that they want private.

KumarAseem• 13 years ago

The places where I have worked (all in India), the offer/joining letter specifically mentions that "You will not disclose your salary to any inside or outside person. If you do so then you could be/will be asked to leave the organisation."

wamatt• 13 years ago

EDIT: As an interesting additional note, all salaries (beyond a token minimum) at Berkeley (and the whole UC system) are publicly available at http://ucpay.globl.org/.

Fascinating, I had no idea this was public. Looking briefly at the results, it reveals a curious data point:

UC's highest paid employee is not, as one might expect, the chancellor or dean, but in fact the sports coach ($2,884,880 gross)

GFK_of_xmaspast• 13 years ago

The highest paid public employee in something like 49/50 states is a sports coach.

rwallace• 13 years ago

Now, there are some cultural reasons to do this--preventing jealousy, hiding inequality. But it really feels like a social band-aid, a temporary solution hiding the symptoms but not the underlying problem.

The underlying problem is that our brains evolved in the Stone Age, and many of our instincts - particularly those to do with status-seeking, envy, thinking of life as a zero-sum game - are destructive and maladaptive in the present day.

This is a problem beyond our power to fix. We don't get to debug our DNA. All we can hope for is social band-aids, temporary solutions hiding the symptoms but not the underlying problem, so the fact that hiding salaries falls into this category is not a valid criticism thereof.

codingdave• 13 years ago

This is only halfway to true transparency. And also halfway to the bureaucracy of most large companies.

The other half to get to full transparency is having clear, measurable definitions of experience, and clear milestones of how to advance in seniority.

And that relates to how this starts to resemble corporate salary structures -- the key difference being that these guys have a defined number instead of a "salary grade". but the idea of plugging positions and experience levels and seniority into a salary structure is key to almost every large company. And as a result, most of the corporate angst over salaries starts to boil down to questions like: "Why is he a programmer IV, while she is a programmer III.", "How do I advance from being a Staff Software Engineer to an Advisory Software Engineer?"

This structure doesn't necessarily remove questions (and sometimes conflict) over career advancement, it just moves the discussion away from money, and towards labels and definitions.

And as some comments mentioned, there are cases where you really want to hire someone whose salary requirements do not match your structure. You may get into sticky situations like having a great coder, but you would have to make him a Lead, or a VP to actually make him fit your structure. And maybe you don't want them to have that level of leadership, because that is not their skill set. So you end up having to decide -- Is this salary structure more important than making those hires, or are you willing to let potentially great hires get away because this structure is more important to the company than those people?

That decision is not one that I will second-guess - I would think that these types of issues and scenarios, as well as other issues raised in the comments, have probably already been debated internally before this decision was reached.

But that would be an interesting follow-up post -- to hear about what discussions and debates went on before making this decision, what the expected impacts will be, why decisions were made, and what levels of growth are expected to invoke changes in this structure.

yeukhon3• 13 years ago

This doesn't scale well when your company grows to hundreds of employees or even thousands.

redguava• 13 years ago

Setting up a pay scheme now to handle thousands of employees would be very premature optimization.

yeukhon3• 13 years ago

But how do you deal with the newcomers? As you grow you keep getting more and more and that system they have will be harder to implement and eventually may end up just like other companies. It isn't something they shouldn't be thinking right now. It does make the current employee happy, but will this work when 10 more people are joining, 20, 30?

symfrog• 13 years ago

This post reminds me of Miley Cyrus at the MTV VMA earlier in the year. Pop singers are incentivized to be the first to break cultural norms for no practical reason in order to ride the wave of subsequent teen followers.

In the same way, posts like these are created to be the first to break a specific norm (i.e. do not post employee salaries publicly) in order to ride the wave of traffic (and hopefully a few additional users).

ereckers• 13 years ago

As long as they never have enterprise sales people I thin everything will be A OK.

YZF• 13 years ago

One result from behavioral economics is that people care more about their relative standing to others than the absolute value of the salary. This is why transparency can be a double edged sword. If I think I deserve to be paid more than Joe, as long as I don't actually know how much he's paid I can believe that I'm being paid more. However, once you have transparency and I can see Joe is getting paid more than myself this will probably have a negative impact on my morale and performance.

One example I've heard discussed (I think by Dan Arieli) is how transparency in CEO pay has failed to bring CEO salaries down. One problem is now CEOs can see what other CEOs are getting paid and naturally every CEO will want to be paid higher than his peers.

I used to think open salaries would be a good thing but lately I'm not so sure. You definitely want to tread very carefully there as there are many implications and unexpected consequences.

andyidsinga• 13 years ago

i was thinking the same thing - i read about that in Dan Arieli's book Predictably Irrational. I suspect open salaries probably increases them on average.

kreek• 13 years ago

How long until the Buffer employees form a union? :)

Kiro• 13 years ago

The support staff makes twice as much as me and I'm an engineer. Are those normal salary levels?

dj-wonk• 13 years ago

I've read dozens of the comments on this page so far. The thing that jumps out to me is the interplay between these factors: (1) internal transparency (2) external transparency (3) internal privacy (4) external privacy (5) human motivation and (6) company culture. There are many combinations here, and I can't help but think Buffer didn't do an effective "search" across the possible "parameter space", even according to their own goals and interests.

For example, Buffer could have easily added a policy saying that each employee's compensation may be adjusted by, say, +/- 20% based on individual factors. That would give some uncertainty, and thus a bit of individual privacy. Peers would still have some confidence that they were, more or less, in a similar range as others with their public performance characteristics.

Let's put ideology aside (i.e. do we want this to work, according to our theories of human nature) and focus on the actual effects. How do you know if you've succeeded? How do you measure this? How do you design the experiment?

Call me skeptical, but I can't help but think that Buffer is doing this, largely, to say "look at us!" and "this makes an interesting blog post!".

newobj• 13 years ago

Well, Sunil and Colin, seeing that you are criminally underpaid, are you interested in opportunities elsewhere?

I will figuratively eat my underwear if you don't come to regret this strategy (public, non-anonymous open vs. internally open) at some point.

mathattack3• 13 years ago

I'm very much on the fence with this. If you follow a simple formula, it can work. If you need to use judgment (how to pay a superstar?) then it becomes very tricky. My general observation is that any time two people compare salaries, one is disappointed. And here you shared your salaries with the whole world. Bravo for doing this, and engaging the discussion.

Diamons• 13 years ago

It's honestly stuff like this that makes me feel like the only sane person around. Why would you do this? If the CEO is pushing for it, the employees will all smile and nod and go along with the crowd, but all this does is breed resentment. The idea of open salaries sounds good on paper, but it's simply idealistic.

You can sing the happiness song and do all the lets-be-friends dances but at the end of the day we're people competing for resources. This will have lasting effects to all current employees for sure.

jasonwocky3• 13 years ago

It's honestly stuff like this that makes me feel like the only sane person around.

You're not.

If the CEO is pushing for it, the employees will all smile and nod and go along with the crowd,

I don't know what to say. There are more kinds of working relationships than are dreamt of in your philosophy. Not everybody lives in fear of their CEO.

You can sing the happiness song and do all the lets-be-friends dances but at the end of the day we're people competing for resources

Sure, but some of us cooperate with others in order to compete with everyone else, and that's good enough.

jballanc• 13 years ago

Imagine if you went to the store to buy bread, but you didn't know how much all the other people in line were paying for their bread. When you get to the counter, the baker charges you some arbitrary amount. Today you have enough money to buy bread, but the baker warns you that he may charge more tomorrow. Since you don't know what anyone else is paying for their bread, you can't have any idea if what the baker charged you is fair or not. All you know is that you need to work as hard as you can so that you can be sure you will be able to afford tomorrow's bread.

Of course, this doesn't work. Nobody is preventing you from asking your neighbors what they paid for their bread. Once you know what a "fair" price for bread is, then you know exactly how hard you need to work to afford bread, and you have little incentive to work any harder than that.

If you own a company, ideally you don't want your employees competing with each other. You want each of them to compete with themselves, pushing their abilities, growing, learning, improving. You don't want them to know exactly how much they need to do to earn that next promotion, because then they will have little motivation to do more than the bare minimum.

If you own a company, unlike the baker, you can have some amount of control over the flow of information. This control allows you to manipulate your employees motivations. Like any amount of control over anything, this control can be abused...but in capable hands it can also be wielded to great effect.

An open salary policy gives away that control entirely...

programminggeek• 13 years ago

One area where open salaries are not such a big deal - education. Many teachers are paid on an open scale of years of service X education level. It does create a culture of possibly too much higher education beyond what is useful or necessary for certain levels of teaching. That also creates teachers who don't want to switch jobs because they'll lose the years of experience pay.

Lesson - all people game the system for their own benefit.

sytelus• 13 years ago

Things I learned today:

* Buffer is not somebody's weekend project

* It needs 16 (yes, SIXTEEN) people to run that thing

* They actually have revenue. In millions. $2.3 Millions!

* Their company values are based on How to win friends and influence people.

Aside from that, open salaries are pretty naive idea, if not completely dumb and dangerous. The lives you live everyday is in effect a game (as in "game theory" game). When you are talking to person, selling goods or buying one you are in the game. Like in any game, information is your advantage and your opponents weakness. This is exactly why privacy matters. If insurance company knows you eat too much pizza, they would want to get a higher premium from you. Similarly if a car dealer can look you up and figure out your salary, he can adjust his negotiation tactics. A plumber making half the money you do would want to charge you more than others. And so on. When all these people would look for their next jobs, their next employer would know how much salary to offer them.

scotty792• 13 years ago

Aside from that, open salaries are pretty naive idea, if not completely dumb and dangerous.

In Sweden all salaries are public, look how awful they are doing.

DominikR2• 13 years ago

In Norway too!

gaadd332• 13 years ago

How does that work if you are a consultant for example? Or, not sure how common they are in Sweden, a salesperson paid only on commission?

I guess I'm curious how it deals with extremely variable salaries or is it just last year's that's public?

nsxwolf2• 13 years ago

Seeing these pathetic salaries (and in the Bay Area!), I don't feel so bad about my boring enterprise development position at no-name established corporation anymore.

dmourati2• 13 years ago

Wow, those salaries are low. If I was making that much and someone posted my salary to the internet, I would immediately quit.

dmourati2• 13 years ago

(job type + location + 10k) X seniority X experience x 1.5

dxbydt• 13 years ago

Back when I was a really dumb undergrad, I did some work for a company & they asked me where to mail the cheque. I gave them the University address. So I was chatting with my professor & we walk by the mailboxes, and by pure reflex, I reach out into my mailbox & grab my mail & he does the same & we say our goodbyes & go home.

Now, I open the mail at home & am staring at my professor's salary! You see, the secretary had switched our mails by mistake because our last names began with the same letter. I was quite stunned by the number - it was a measly sum, and I did the math & worked out that the Professor's salary was about 60K. Now, I knew my Professor was an important CS scholar & had tons of papers to his name, but that low number irked me. After the PhD and all these papers, just 60K...why..?

At the same time, my Professor had also gone home & opened his mail & was staring at my salary! So much money for some dumb undergrad who was basically an average student & had no major publications or research! He was quite bothered.

The next day, we had a very awkward exchange of mails. But from then on, the student-teacher dynamic completely changed. I suddenly began getting B's instead of C's & even occasional A-. He probably felt, hey if this guy can get so much money in the market, he probably knows his shit. otoh, I began to respect him & the CS program less & less. So I still have to spend 3 more years & take 45 more credits & do the qualifiers to get the PhD & then write all these papers & for what..60K ? That was my attitude at the time.

Needless to say, I dropped out of the PhD pgm with a Masters & went to work full-time. That was the stupidest thing I ever did, but I just didn't know it then. Now, I look back & think...hey if I hadn't known about his salary, I'd have slogged it through & actually gotten my PhD instead of half-assing it out here :(

nilved• 13 years ago

Yeah, that's a pretty shameful and classist thing you did. Glad you seem to have learnt your lesson.

SrslyJosh• 13 years ago

Props for admitting your mistake.

Our reaction to academic salaries should really be the opposite. It's sad that we undervalue education so much in the US.

corry• 13 years ago

Serious question: Why aren't equity positions posted too?

To me, that's part of the trade-off that the startup founder / leaderships takes (for good or ill), and seeing salary in the absence of actual equity positions is only half the picture.

Hopefully they all know each other's equity positions internally and just chose not to share publicly... otherwise it would seem like a betrayal of the open culture if the actual ownership structure of the company wasn't openly known and discussed.

dinkumthinkum7• 13 years ago

I don't mean anything but these salaries are pretty weak. Honestly, they are sort of really weak for this kind of company it seems to me. Hardly gives the impression of high paid software developers, particularly in the Bay Area, wow. I dunno.

juliebug• 13 years ago

As someone who uses Buffer (free version) on a regular basis, I have to say that I'm fairly amused that it appears as though none of the commenters here have actually read much, if anything, about Buffer. They have quite a lot of information about corporate culture that would have answered some of the questions and concerns posted here. Further, they're a distributed workforce (which I don't think anyone picked up on -- this explains emails vs. face to face conversations).

Some extra reading for you folks:

http://bufferapp.com/about/#our-philosophy (scroll down to the 9 Buffer Values)

http://www.slideshare.net/joelg2/buffer-culture-01-16707113

thesausageking3• 13 years ago

I'm really surprised the founders are the best paid people on the team. $158k is a big salary for a founder/CEO of a company at that stage.

treitnauer• 13 years ago

It's great to see other companies experimenting with openness in salaries. We've taken a different approach and pay all employees (including founders) the same salary which increases as the company grows. Our team is now 8-people strong and it's working great so far. As long as you contribute to the bottom line everyone's salary goes up automatically. It's totally transparent, no negotiations required, reviews, etc.

icedchai2• 13 years ago

It's interesting the number of employees that chose the "+$10K more salary instead of more options" option. What does this tell you?

tomasien• 13 years ago

There are a lot of people bringing up edge cases and contingencies on this thread. The success of Buffer's culture is what happens when you stop being afraid of the edge cases and start deciding what kind of people you want to be. People will follow you if you stay true to that, as corny as that sounds.

overgard• 13 years ago

What the hell is a happiness hero? It sounds like some sort of horrible orwellian euphemism.

n1ghtmare_• 13 years ago

"Happiness hero"! I can't think of anything more cheesy. Seriously.

joshuaellinger• 13 years ago

I always thought the best system would be to tell people what their boss makes, including options and other non-salary compensation.

This eliminates the problem of people comparing themselves to their nominal peers on incomplete information. It really tells you everything you need to know about compensation.

But the most valuable part of the buffer system is the formula. You have a framework for calculating what is fair.

One of the dangers at small busy startups with well-intentioned leaders is that you basically forget to give people raises and your employees don't get you to correct it until they are pissed enough to quit. That's part of why I left my original company and it cost me a good employee recently.

sifarat• 13 years ago

I am the CEO, and my salary is lesser than all the key staff in my company. Reason, self-funded. And everyone in the office knows it. I am just astonished how a CEO of company like Buffer, can afford such an expensive package for himself. Are you making enough or just billing it to your investors?

Uchikoma• 13 years ago

As a "boss" I'd love this.

The only downside I see is that some people will be disappointed because the salary reflects their skills and the value the company puts in them. For some this is hard to take if they are in the bottom 20% of people in their peer group.

Said that, it's probably a good idea to start with this compared to introducing this later.

snambi• 13 years ago

Fantastic

asgard1024• 13 years ago

I think if you don't like the idea of closed salary (I don't), you should just go ahead and publish yours publicly (on FB or something), if you have the guts to do it and face potential conflict with your employer (I don't have the guts, I wish I had).

Because, quite frankly, it's your money. No one should tell you what to do with it, much less to count these, publicly. And if, as the result of this, you get smaller salary, it will be there for the others in the company to see. How motivational.

I think even with this unilateral action, you will get most of the benefits - good people around you are likely to respond back and tell you if you're underpaid or overpaid.

the_watcher• 13 years ago

The CEO of Buffer was asked by someone if he worried about this making it easier for his employees to be poached. His response: "if they do, they would be saving me time. Good to speed up that process. I don’t believe salary is the reason people would leave."[1]

[1] https://twitter.com/joelgascoigne/status/413713018455740416

bdg• 13 years ago

I'm still baffled by salaries. In Toronto and surrounding areas (cost of living is not as high as San Francisco) I'm a programmer for web apps (php, js, and a bit of this-and-that). I see sallary ranges all over the map. Some make 40k, I've seen a 55k who wanted 60k, I've an 80k, and a few 90-120k.

One job I asked for 2x what I made at my old job.

I'm convinced you're paid what you ask for, so long as you can get shit done.

Introducing Open Salaries at Buffer

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