Intentionally building stock options to take back what someone has earned through effort, time and investment is just a bad faith deal, in my humble opinion. Don’t use stock options if you are unwilling to commit to their commonly understood intent, and don’t buy your partner a gift because you really want to use it.
Read MoreMost human resources and compensation professionals are peaceful people, but we are all fighting for talent. It often surprises me how many startups fight that war using the same tools and techniques as their larger combatants. There are, of course, rules that generally are followed, but they are few and relatively unrestrictive. When you are battling for the existence and success of the company that aligns with your passions and puts food on the table, perhaps you should consider not following the leaders. While cash is limited at startups, annual incentives can still exist and are compelling.
Read MoreAs we move into the compensation planning season, I thought it was time for a quick reminder to focus on keeping things simple. Over-complicating the basics of pay, can make it impossible to successfully accomplish the most complex things. So many small and mid-sized companies work so hard to make base pay “perfect” that they have no time or energy to build effective short-term incentive plans or rational equity compensation plans.
Read MoreThe real best practices on equity are found at the edges, in the corners and behind the curtains of survey data, trend articles, and recent big winners.
I like to say a good program starts with knowing “who you want to be when you grow up.” The potential future value of the company and the time and number of employees it will take to get there should be a…
Read MoreWhen dealing with equity, especially at private companies, expect the data to be terrible. Get more than one set of data so you can have a reasonable range for the terribleness. Then do your process in reverse. Instead of looking at the market data and determining how to fit people in, look at your people and determine what you are trying to accomplish. Then determine what levels of equity and types of features will help you reach your goal. Finally, take a look at the market data and determine if you are, based on your needs, within the right range of accuracy.
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