Executive Compensation Management

My non-negotiable flags for merit cycles. (13 flags I picked up managing comp at Instacart, Google, and Cruise) First, steal 𝗺𝘆 𝗻𝗲𝘄𝗲𝘀𝘁 𝗺𝗲𝗿𝗶𝘁 𝗰𝘆𝗰𝗹𝗲 𝘁𝗲𝗺𝗽𝗹𝗮𝘁𝗲 (just released today) w/ these 13 built-in 🚩flags — free in Pequity 👉 https://lnkd.in/eKHh_MvG 1. 𝗡𝗲𝗲𝗱𝘀 𝗜𝗺𝗽𝗿𝗼𝘃𝗲𝗺𝗲𝗻𝘁 + 𝗥𝗲𝗰𝗲𝗶𝘃𝗲𝗱 𝗜𝗻𝗰𝗿𝗲𝗮𝘀𝗲: Rewarding poor performance can undermine your comp philosophy. Ensures increases for “needs improvement” employees are intentional. 2. 𝗢𝗳𝗳-𝗖𝘆𝗰𝗹𝗲 𝗜𝗻𝗰𝗿𝗲𝗮𝘀𝗲𝘀 (𝗹𝗮𝘀𝘁 6 𝗺𝗼𝗻𝘁𝗵𝘀): Is another increase is justified, or should this employee be skipped this cycle? 3. 𝗠𝘂𝗹𝘁𝗶𝗽𝗹𝗲 “𝗘𝘅𝗰𝗲𝗲𝗱𝘀” 𝗪𝗶𝘁𝗵𝗼𝘂𝘁 𝗣𝗿𝗼𝗺𝗼: Addresses career progression convos early instead of relying on pay. 4. 𝗡𝗼 𝗣𝗿𝗼𝗺𝗼 𝗶𝗻 2+ 𝗬𝗲𝗮𝗿𝘀 (𝗷𝘂𝗻𝗶𝗼𝗿 𝗹𝗲𝘃𝗲𝗹𝘀): High-potential junior levels expect quicker movement. Flags bottlenecks in promos and ensure talent pipelines are moving. 5. 𝗣𝗮𝘆 𝗟𝗲𝗮𝗽𝗳𝗿𝗼𝗴𝗴𝗶𝗻𝗴: When new hires or recent promos are paid more than tenured peers at the same level. Ensures leaders make adjustments to maintain internal equity. 6. 𝗙𝘂𝗹𝗹 𝗘𝗾𝘂𝗶𝘁𝘆 𝗩𝗲𝘀𝘁𝗶𝗻𝗴 𝗟𝗼𝗼𝗺𝗶𝗻𝗴: Prompts retention convos and refresh grants to keep key talent engaged. 7. 𝗛𝗶𝗴𝗵𝗲𝘀𝘁 𝗣𝗮𝗶𝗱 𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗲 𝗶𝗻 𝗮 𝗥𝗼𝗹𝗲/𝗟𝗲𝘃𝗲𝗹/𝗟𝗼𝗰𝗮𝘁𝗶𝗼𝗻: These may be justified (unique skills, performance), but they raise fairness questions. Helps teams review whether the pay is warranted or if disparities exist. 8. 𝗟𝗼𝘄𝗲𝘀𝘁 𝗣𝗮𝗶𝗱 𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗲 𝗶𝗻 𝗮 𝗥𝗼𝗹𝗲/𝗟𝗲𝘃𝗲𝗹/𝗟𝗼𝗰𝗮𝘁𝗶𝗼𝗻: If they’re underpaid relative to peers, you may be exposed to attrition or legal concerns. Supports pay equity reviews and corrective actions. 9. 𝗦𝘁𝗮𝗿𝘁 𝗼𝗿 𝗣𝗿𝗼𝗺𝗼𝘁𝗶𝗼𝗻 𝗗𝗮𝘁𝗲 𝗶𝗻 𝗣𝗮𝘀𝘁 3 𝗠𝗼𝗻𝘁𝗵𝘀 + 𝗜𝗻𝗰𝗿𝗲𝗮𝘀𝗲: Another increase may be premature. 10. 𝗡𝗼𝗻-𝗽𝗿𝗼𝗺𝗼𝘁𝗶𝗼𝗻 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲 >15%: Large increases are rare and usually tied to promos. Ensures decisions are well-documented and consistent. 11. 𝗔𝗻𝘆 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲 <2%: Tiny increases can feel like an insult rather than a reward. Prompts leaders to reconsider if a low adjustment is even worth granting. 12. 𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗲𝘀 𝘄𝗶𝘁𝗵 >18 𝗠𝗼𝗻𝘁𝗵𝘀 𝗪𝗶𝘁𝗵𝗼𝘂𝘁 𝗮 𝗥𝗮𝗶𝘀𝗲: Signal of disengagement or turnover risk. 13. 𝗣𝗿𝗼𝗺𝗼 + 0% 𝗜𝗻𝗰𝗿𝗲𝗮𝘀𝗲: Ensures that if an employee is advancing in scope, their comp reflects it.  Automating these flags in your comp cycle helps prevent attrition, lawsuits, inequities, and strained budgets. Also, I have a surprise for you. 👇  I've put together a comprehensive compa-ratio matrix and an alternative ratings-based increase matrix—covering how compa-ratio ties to ranges while giving business leaders the % increase view they prefer (built on best practices from top-performing teams). 💬 𝗝𝘂𝘀𝘁 𝗰𝗼𝗺𝗺𝗲𝗻𝘁 "𝗠𝗮𝘁𝗿𝗶𝘅" below, and I'll send you the link to the Google Sheet.  P.S. Any flags you’d add to this list?

"The single most destructive thing managers do is save up observations for the performance review." I said this to Daisy Auger-Domínguez (she/her/ella) for her latest Forbes piece on finishing the year strong, and I stand by it: if something in your review is news to the employee, you've already failed. The problem isn't that we give feedback wrong. It's that we collapse two fundamentally incompatible conversations into one sitting: - Growth feedback requires psychological safety. You need people to be vulnerable, reflective, open to experimenting with new approaches. - Compensation decisions require evaluative judgment. You're assessing value, making financial trade-offs, distributing limited resources. You cannot create the conditions for both simultaneously. When you combine them, employees stop listening and start calculating. They can't focus on development when they're doing mental math about their raise. This is amplified for neurodivergent employees – the cognitive load of processing "surprise" feedback while simultaneously calculating financial implications can be completely overwhelming, especially for those with rejection sensitive dysphoria or ADHD. And managers hedge their developmental feedback because they're worried about salary implications. Here's what actually works: separate them entirely. Document feedback continuously throughout the year. Make performance reviews a synthesis of conversations you've already had – not reveals. Then have compensation discussions later, in a different meeting, with clear criteria tied to business impact. The managers who do this well end up with teams that trust them more, develop faster, and – surprise, surprise – perform better when comp decisions do come around. Thank you to Daisy for creating space for this critical conversation. Her work on building teams and cultures that actually work continues to push all of us to think differently about leadership. Full article: https://lnkd.in/edzKGMFr How do you handle feedback and comp conversations on your team?

Most boardrooms get this wrong: They obsess over compensation when the real driver of success is developing talent. Here’s why: A company is like a plane—it flies on two engines: talent development and compensation. Yet too many organizations rely too heavily on just one engine—compensation. They believe competitive salaries and perks will keep them in the air. But without investing in talent development, they are flying at half-power. And when turbulence hits—economic shifts, industry disruptions, evolving skill demands—compensation alone will not keep the business steady. The real force behind long-term success comes from developing people, not just paying them. Still, in boardrooms, 80% of the conversation revolves around paychecks and benefits. This is a mistake. Because here’s what most leaders fail to see: Compensation is important, just like fuel is essential to a plane. But fuel alone does not fly the aircraft. A company needs a strong engine for growth, a culture that nurtures talent, builds skills, and creates opportunities for people to rise. And when that doesn’t happen, something dangerous follows… Talent development is not just an HR initiative. It is the true power source that determines whether a company soars or stalls. Organizations that prioritize learning, mentorship, and career progression will always outperform those that do not. Employees who see a future in a company will invest in its success. Those who do not will eventually leave, no matter how competitive their paycheck is. And if companies wait too long to invest in talent, they may realize the real cost when it is too late. If you want your company to reach new heights, investing in talent is non-negotiable. Here is where to start: 👉🏻 Provide ongoing training and mentorship. Skills must evolve to meet the demands of a changing market. Companies that invest in continuous learning stay ahead. 👉🏻 Create clear career paths. Employees stay where they see a future. Without growth opportunities, they will seek them elsewhere. 👉🏻 Build a culture of learning. When teams are encouraged to develop new skills, innovation thrives. A stagnant workforce leads to a stagnant company. 👉🏻 Recognize and reward progress. People should be valued not just for their results but for their growth and ambition. When both engines—talent and compensation—are firing together, companies do more than survive. They thrive. Agree? #Leadership #TalentStrategy #FutureOfWork

A salary review impacts company culture more than any offsite. Yet, companies spend months planning offsites, and then speedrun their salary reviews. New data from Ravio shows most reviews happen without proper market data or clear frameworks. 40% European tech companies still use spreadsheets to manage compensation. 😳 What’s more, 60% of companies price new roles based on candidate salaries collected by their recruitment team. These techniques result in mistakes. And even small salary mistakes can create big retention problems. So, here’s some advice on how you can can improve your compensation reviews: 1️⃣ 𝗗𝗼𝗻’𝘁 𝗿𝗲𝗹𝘆 𝗼𝗻 𝗺𝗮𝗻𝘂𝗮𝗹, 𝘁𝗶𝗺𝗲-𝗰𝗼𝗻𝘀𝘂𝗺𝗶𝗻𝗴 𝗽𝗿𝗼𝗰𝗲𝘀𝘀𝗲𝘀 Spreadsheets, while functional, are prone to errors and can be incredibly time-consuming. There are plenty of tools out there (like Ravio) which can do the heavy-lifting now. Automating part of the process will make you 10x more efficient, freeing up HR and execs time to focus on managing compensation, not spreadsheet formulae. 2️⃣ 𝗖𝗿𝗲𝗮𝘁𝗲 𝗮 𝘃𝟭 𝗰𝗼𝗺𝗽𝗲𝗻𝘀𝗮𝘁𝗶𝗼𝗻 𝗽𝗵𝗶𝗹𝗼𝘀𝗼𝗽𝗵𝘆, 𝗶𝘁 𝗱𝗼𝗲𝘀𝗻’𝘁 𝗻𝗲𝗲𝗱 𝘁𝗼 𝗯𝗲 𝗺𝗮𝘀𝘀𝗶𝘃𝗲 I’m often asked by HR leaders when they should write a compensation philosophy. In my opinion, the sooner the better. Without it, it’ll become very hard to rationally explain compensation decisions to employees or management. It doesn’t need to be complicated, just 1-2 pages that aim to answer why you pay the way you do. 3️⃣ 𝗖𝗿𝗲𝗮𝘁𝗲 𝗮 𝗰𝗹𝗲𝗮𝗿 𝗷𝗼𝗯 𝗮𝗿𝗰𝗵𝗶𝘁𝗲𝗰𝘁𝘂𝗿𝗲 𝗮𝗻𝗱 𝘀𝗮𝗹𝗮𝗿𝘆 𝗯𝗮𝗻𝗱𝘀 Without a well-defined job architecture and corresponding salary bands, it’s hard to compensate employees fairly. The absence of clear structures leads to inconsistencies, particularly when hiring new employees or promoting from within, resulting in potential salary discrepancies for similar roles. A well-structured framework ensures transparency and equity in pay across the organisation. 4️⃣ 𝗕𝗲 𝗰𝗼𝗻𝘀𝗶𝘀𝘁𝗲𝗻𝘁 𝗮𝗻𝗱 𝗿𝗶𝗴𝗼𝗿𝗼𝘂𝘀 𝘄𝗶𝘁𝗵 𝘀𝗮𝗹𝗮𝗿𝘆 𝗿𝗲𝘃𝗶𝗲𝘄𝘀 Not conducting salary reviews with rigour, is another common mistake. Inconsistent reviews can lead to growing salary imbalances and missed opportunities to address issues proactively. This is especially common amongst smaller, faster growing companies with limited HR processes, where I sometimes see companies rushing pay reviews “for speed”. Reviews help demonstrate a commitment to employee development and retention. They’re worth the effort. What steps have you taken to improve compensation reviews? You can get the full report here https://bit.ly/4nFbjfP 

Here are five best practices RIAs should implement when offering equity-based compensation to employees that will help retain employees, protect the firm, and save the adviser money: 1.     Tie Equity Awards to Performance or Tenure that align company and employee incentives Instead of granting equity outright, RIAs can structure awards based on performance metrics or long-term tenure. Examples include: - Attaining Revenue growth or AUM targets - Achieving client retention rates - Hitting firm-wide profitability thresholds - Achieving tenure with the firm (e.g., equity granted in stages over 4 years) 2.     Clearly Define Equity Rights and Limitations RIAs should specify whether the equity grants provide voting rights, distributions, or profit-sharing rights. Many firms issue profits interests or phantom equity instead of actual ownership stakes to reward employees without giving them undue influence over the management of the business. It’s crucial to outline exit rights, transfer restrictions, and any buyback provisions in the equity agreements. 3.     Include forfeiture or repurchase terms.   To protect the firm, RIAs should include a buyback clause allowing the company to repurchase equity if an employee leaves. The repurchase price should be clearly defined—whether it’s fair market value, book value, or a predetermined formula. This prevents departing employees from retaining ownership in the firm indefinitely. 4.     Include provisions requiring employees to stay on for a period of time after a liquidity event (such as the sale of the RIA) to minimize the likelihood of any employee attrition immediately after the sale of the RIA to allow the firm to continue operations uninterrupted. 5.     Consider Tax Implications for Both the Firm and Employees Equity-based incentives can trigger unintended tax consequences. For example: - Profits interests (if structured correctly) can avoid upfront tax liability. - Restricted stock grants may require an 83(b) election to avoid higher tax rates later. - Phantom equity may result in taxable compensation upon payout. It’s important to consult tax and legal advisors to ensure the structure satisfies the firm’s intended goals. Please reach out if you need assistance with structuring equity compensation for your employees.

I used to manage global compensation for 500+ employees across 20+ countries...all on spreadsheets 😅 Let’s just say...I have the scars to prove how manual and stressful this was 🤯 Fast forward to today and the world of compensation looks completely different. Modern tools and real-time market data have revolutionized how startups plan and manage pay. In Part 1 of the Scaling Startup Compensation guide, created in partnership with Paula Judge and Peter Clarke, from the Accel Talent Team, we built the foundation (link in comments!). Now in Part 2, we’re getting tactical. How do you operationalize your compensation strategy with the right tools, data, and expert support? You’ll learn how to: 🛠️ Utilize compensation planning tools to give HR, Finance, and Leaders real-time insights, ditch spreadsheets, while automating manual work 🛠️ Choose the right tools and market data sources, like ChartHop, Pave, Complete, Kamsa, CandorIQ, and others, balancing accuracy of data and stage-appropriate features 🛠️ Engage specialized consultants to help you navigate the complexities of compensation with confidence Features insights from Lola Han, Armina Behrouzi, Matt McFarlane, Ashish Raina, Tudor Havriliuc, and Brett Ungashick - trusted experts guiding early-stage startups through key compensation decisions. Next up in Part 3 → Designing equity programs that attract and retain top talent. But first — read Part 2: Planning with Precision👇 https://lnkd.in/eK9xQGJx

Ignoring Pay Compression Will Cost You I’ve witnessed firsthand how pay compression can erode employee morale and lead to regrettable turnover. Examples of pay compression: #1 - The pay of an employee is very close to or above the pay of more experienced and higher performing employees in the same job title. #2 – The pay of an employee is very close to or above their first level supervisor. Why does this happen? Rapid hiring, external labor market changes, or failing to regularly adjust compensation structures. Addressing pay compression is not just a matter of fairness. It is essential for retaining top talent. When long-term employees see new hires earning similar or even higher salaries, it can foster resentment and a sense of undervaluation. By solving these pay inequities swiftly, you can maintain a motivated workforce and minimize turnover costs. Conducting a pay compression audit annually is crucial. However, if you’ve increased hiring significantly then more frequent reviews may be needed. Pay Compression Considerations: 1.        External Market Comparisons: Review the current external market pay rates for similar jobs within your industry, location, and organization size. 2.        Internal Equity: Review the salaries of employees to ensure that those doing substantially similar work are considered when developing a new hire’s job offer. Don’t forget to include in your review consideration for those employees that have similar experience, skills, performance, and/or tenure. 3.        Performance Metrics: Ensure that pay reflects performance. Are high performers being rewarded more than those that are average or low performers? Are your high performers feeling underappreciated? 4.        Pay Transparency: Deliver consistent communications to employees about what their pay is based on and why.  Write compensation guidelines and processes and follow them consistently. Transparency can mitigate frustration and enhance trust. 5.        Legal Compliance: Ensure that your compensation practices comply with labor laws and regulations. This is more complex now than it was a few years ago so prioritize resources to understand and meet your obligations. 6.        Budget Considerations: Evaluate the financial implications of proposed pay adjustments. Can you sustain these changes in the long term? Include a pay equity budget along with your annual salary increase budget.  Investing in equitable compensation practices is not just a financial decision. It is a strategic decision that supports the long-term success of an organization and its employees. Each payday is a reminder to employees about why they go to work. Be sure that reminder a positive one and not one that reminds them that they aren’t appreciated or valued. #compensation #paycomression #payequity #paytransparency #fairpay #hr #humanresources #rewards #totalrewards #compensationconsultant

The most expensive mistake I see startups make? Waiting until 50+ employees to build their compensation strategy. By then you've already: - Created random job titles - Set arbitrary pay bands - Built comp inequity into your culture - Lost key talent who couldn't see their career path Here's what happens: You're growing fast. Hiring like crazy. Someone asks "what's our career ladder?" or "how do we level engineers?" *crickets* You scramble to implement performance reviews and engagement surveys. But those are bandaids if people don't know their career trajectory. The fix? Build your pay & career framework by employee #25. Not employee #50. Your comp strategy IS your career strategy. Quick framework to start: 1. Define clear job architectures 2. Set market-aligned pay bands 3. Create transparent growth paths 4. Build flexibility (cash vs equity trade-offs) 5. Document it all The companies that nail this early avoid the painful reorgs and retention issues later. Curious - at what stage did your company implement a formal comp strategy? Drop a comment below. Want more comp planning tips? Follow my page or shoot me a DM. #startup #compensation #careers #hiring

Compensation is the investment in people. In my experience, when Talent Development (L&D/ Training) teams collaborate closely with Compensation & Benefits, they have the power to build holistic talent strategies that attract, engage, and retain top talent. But how do we ensure we work in sync? - Link Learning to Career Growth: Employees need to see how their learning directly translates to promotions and pay increases. It's all about showing them a clear path forward. - Integrate Upskilling into Total Rewards: Upskilling should be woven into the very fabric of benefits. From tuition assistance to certifications and internal mobility programs, growth should be a rewarding experience. - Leverage Data for Fairness & Impact: The insights we gather through data can highlight skill gaps, empowering Compensation teams to create pay structures aligned with the workforce's evolving needs. - Make Learning a Retention Strategy: Top talent stays where there is opportunity for growth. Compensation should reflect the investment in continuous learning and development. When Talent Development and Compensation align, we foster a culture of growth, opportunity, and purpose. How is your organization integrating Talent Development into its total rewards strategy? #CompensationStrategy #L&D #TalentRetention #HRLeadership #CareerGrowth #TalentEnablement #TalentDevelopment #EmployeeTraining