Open salaries considered useful?

Buffer, the social sharing platform, released a blog post today detailing their employees’ pay scale and specific salaries. The approach of open salaries is very interesting to me, but I’m wondering about the public aspects of releasing it online.

Transparent vs. Public

In the article, Joel (Buffer’s CEO) refers to transparency as one of their core company values (which they’d previously released online as well). Transparency as a company value sounds noble, however reading their definition in the above link, I am feeling the real meaning is honesty instead.

I am of the opinion that not everything that goes on in the company needs to be shared as a default. I’m not talking about hiding or misleading information, rather not proactively sharing it. Mark Suster wrote a fantastic post on the topic of “How open should a startup CEO be with employees“, and it covers some instances where complete transparency might be a detriment.

Please remember that we’re all wired different to accept uncertainty, risk & stress. And remember the reason that most people aren’t startup CEOs is that deep down while they might want your job theoretically most of them don’t actually want the kind of life and pressures that come with your job.

Regarding salary numbers, I have always provided it in full whenever asked by an employee or a potential hire, since I don’t see potential problems there, yet. There is a difference, however, between providing information on demand, and publishing it publicly online for the whole world to see.

I think that how much a person makes is private information and that it should be up to them to decide whether to share it online or not. From the comments it seems that all of Buffer’s employees were onboard, however there is a difference between being onboard with something and being happy about it. In addition, equity decisions are provided in the data, which is another piece of information that some people might want to keep private.

Is this a big deal? probably not. You can tell from the comments on the post, as well as this HN thread that opinions are split on whether this is a good idea or not (this comment in specific summarizes this point of the post). I’m not clear on what purpose releasing the information online serves in this case, outside of good blog post material :)

Should founders be making more than employees?

Since the numbers are there, might as well take a look at it. The 2 founders, Joel and Leo, are making by far the most, even without the salary bonus for less stock options (obviously, they don’t need that). They also make different salaries (depending on their role defintion, as per their payscale).

Me and my co-founder, Adam, were always of the opinion that:

  1. We should make the same salary.
  2. That salary should be below market value until we’re very profitable and should never be the highest in the company.

The reason for #1, is that even though we have defined roles and responsibilities (I am the CTO, he is the CEO), we constantly wear different hats and even substitute for each other as needed. That comes with the territory of being a core founder of a company, and I doubt it will change until Binpress reaches a significant size, if at all.

The reason for #2  is that as founders we have a much bigger stake in the company. In the case of a liquidation event – even a small one – we will receive much more upside than any of our employees. I can totally see the case for position based pay for hired professionals (could even be a professional, non-founder CEO), however to me it doesn’t make sense to do the same for founders (who presumably, still have most of their shares).

I do not mean this as criticism of Joel and Leo’s salaries – Buffer is reportedly generating significant revenue, and as founders they are obviously entitled to determine their salary in a way that makes sense to them. It does however conflict a bit with my opinions on founder salary, so I’m wondering about the thought process behind it.

The revenue number in the TC article above is $1.5M annually. Summing up all the salary figures in the buffer post, their entire payroll comes to $1.71M currently. Considering office costs, servers and other non payroll expenses, Buffer are still slightly in the red, so does it make sense for the founders to be making that much more than everybody else?

Obviously, I do not have their financials, so the actual situation could be different. You might expect this kind of feedback, however, when you release your salary information in public.

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