Introducing Open Salaries at Buffer: Our Transparent Formula and All Individual Salaries

When we first established the 9 Buffer values that we wanted to have as the center of our company culture, we knew that sticking to these ideas will be an incredible challenge. Especially since we’ve seen before that these values can easily end up being little more than a set of words written on a piece of paper.

In our culture deck, the second value on our list at Buffer is “Default to Transparency”. With this point especially, we started to think about everything we do within the company and how we could change it to something more transparent.

Sticking to radical transparency was probably both one of the most frightening and exciting things to do over the past months. It meant to open up and make ourselves extremely vulnerable for ideas, since they were easily accessible to everyone on the team. Let me give a few examples of where we’ve started to put more transparent workflows in place:

  • 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)

From the examples above, I often reflect on the power of transparency. I believe that it has such a unique potential to empower and inspire a team that it has largely transformed how we run Buffer.

One key reason transparency is a such a powerful value for a company’s culture is trust: Transparency breeds trust, and trust is the foundation of great teamwork.

Another thing that happens when you default to transparency is that it breaks down barriers within the team drastically. This is simply because defaulting to transparency means that you share every idea or new direction very early, before it’s completely solid.

Recently, we also made the decision to apply our ideas around transparency to compensation. We hope this might help other companies think about how to decide salaries, and will open us up to feedback from the community. So here we go, for the first time, we are making our new, internal salary formula public and including all the individual salaries too:

What is “Open Salaries”?

At Buffer, we have the concept of “Open Salaries”. We have a simple formula to calculate salaries and we share this with the whole team.

Why?

One of the highest values we have at Buffer is Transparency. We do quite a number of things internally and externally in line with this value. Transparency breeds trust, and that’s one of the key reasons for us to place such a high importance on it. Open Salaries are a step towards the ultimate goal of Buffer being a completely “Open Company”.

The salary formula

Salary = job type X seniority X experience + location (+ $10K if salary choice)

  • job type = base
  • happiness hero = $45,000
  • content crafter = $50,000
  • engineer = $60,000
  • designer = $60,000
  • Operations officer base = $70,000
  • Executive officer base = $75,000
  • seniority = base multiplier
  • Senior + 5% base and 3k/$m revenue
  • Lead +7% base and 4k/$m revenue
  • VP + 10% and 6k/$m revenue
  • C-level +20% and 8k/$m revenue
  • COO +20% and 10k/$m revenue
  • CEO + 20% and 12k/$m revenue
  • experience = multiplier
  • Master: 1.3X
  • Advanced: 1.2X
  • Intermediate: 1.1X
  • Junior: 1X
  • location = additional
  • A: +$22K (e.g. San Francisco, Hong Kong, Sydney, London, Paris, New York)
  • B: +$12K (e.g. Nashville, Birmingham, Vienna, Austin, Vegas, Tel Aviv)
  • C: +$6K (e.g. Talinn, Warsaw, Bucharest, Santiago)
  • D: +$0K (e.g. Manila, Delhi, Hanoi)
  • equity / salary choice
  • you get a choice of more equity or more salary, if you choose salary, you get +$10K

Buffer Bootcamp: 45 day Freelance period

For the freelance 2 month period for new hires, we take the +10K (salary over equity) option and then translate that into a daily rate. At the end of 2 months, the person can choose to reduce salary for more equity.

Current Salaries

  • Joel (CEO)= $158,800 (75k Executive Officer base + 20%, + 12k/$m revenue, 1.2X, +22k,)
  • Leo (COO) = $146,800 (70k Operations Officer base + 20%, + 10k/$m revenue, 1.2X, +22k)
  • Sunil (CTO)= $137,600 (engineer + 20% + 8k/$m revenue, 1.2X, +22K, +10K)
  • Carolyn (CHO) = $106,000 (happiness +20% +8k/$m revenue, 1.2X, +22K)
  • Andy (Senior iOS Engineer) = $107,900 ($60,000 + 5% + 2*$3k, X 1.1 + 22K + 10K)
  • Michelle (Growth Engineer) = $98,000 (engineer, 1.1X, +22K, +10K)
  • Åsa (Senior Happiness Hero) = $85,900 ($45,000 + 5% + 2*$3k, X 1.2 + 22K)
  • Colin (Senior Backend Engineer) = $104,800 ($60,000 +5% + 2*$3k, X 1.2 + 12K + 10K)
  • Belle (Content Crafter) = $82,000 (content crafter, 1.2x, +12K, +10K) * 0.8 (Belle works 4 days a week)
  • Brian (Designer) = $94,000 (designer, 1.2x, +12k, +10k)
  • BMR (Happiness Hero) = $76,000 (happiness hero, 1.2x, +12k, +10k)
  • Niel (Frontend Engineer) = $88,000 (engineer, 1.2x, +6k, +10k)

Team members in the 45 day Buffer bootcamp period

  • Mary (Happiness Hero) = $70,000 (happiness hero, 1.2x, +6k, +10k)
  • Adam (Happiness Hero) = $76,000 (happiness hero, 1.2x, +12k, +10k)
  • Zach (Backend Engineer) = $94,000 (engineer, 1.2x, +12k, +10k)

Thoughts about the future of Buffer’s salary formula

One of the most important parts of the salary formula is that this is a living document. For example, we’ve iterated to this version of the formula from a previous version that you can find here. A key change we made here is to add career progression into the formula, which as Buffer has grown over the past, has become an important addition.

You can see the internal version of the formula here where we’ll continually make updates to it. We expect to make frequent changes to it and also blog about them as they happen.

It feels incredibly liberating to put this out into the open. I’d love your thoughts, ideas and feedback on our formula and how we can improve it further. Please ask me any questions in the comments below.

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  • Jax Blunt

    That is very open. Wow.

  • mhsutton

    So you know as Customer #10 I am immensely proud of what you guys are doing. The openness that you espouse and you demonstrate daily is just unprecedented anywhere.

    One thing I find curious is what is the purpose of sharing each person’s salaries publicly? What do you hope will happen by doing so?

    I totally get why you would do it internally and even why you might share the formula publicly, I am just curious why the need to share the figures publicly.

    Nonetheless, I am nothing if not blown away by your openness. Keep the walls glassy.

    • Heather YamadaHosley

      Hello! Wow, customer #10, awesome! Two reasons I can think of are: so it is public who does and does not have equity and so that people interested in working for Buffer can see what kind of pay they might expect if they did so (by being able to find a team member with skill level comparable to their own). And of course, just to be as transparent as possible. :)

      • mhsutton

        Being transparent for transparency sake works for. Though I think the formula would have sufficed for the first point (with a worked example).

        Really interesting conversations on #hrtrends to about Employee Branding – what a horrible term that is meant to mean, in part, attracting new ‘talent’. Salary transparency would just cut out so much BS. Once again you guys blaze your own trail.

        Thanks for taking the time to reply ;-)

        ps. I would have been customer #3 if I had pulled my finger out sooner ;-)

        • Heather YamadaHosley

          Some other places do salary transparency (jobs posted on Angelist), though not with as much detail as Buffer! I hope this kicks off a trend! :) I think Buffer’s transparency and approach to hiring really cuts through a lot of the BS so that they can clearly and quickly evaluate if someone is a good fit for the culture/position or not.

          Must have been quite interesting for you to go through all the iterations of Buffer and see it live as features were added! What an amazing experience, have you written about it anywhere (maybe a guest post for the Buffer blog)? It would be lovely if the community champion did a little something to recognize Buffer’s first X number of customers who really helped support it in its beginnings.

          • mhsutton

            I have that post on my todos.

            For months I didn’t really know what to do with buffer – though I still paid my subs to help in a small way.

            Then about a year down the line – it absolutely pinged. It helped me correct my twitter tourettes.

            But I feel so mushy inside about what all you guys are doing. All those days of Joel sitting in Starbucks by Victoria Square drinking endless cups of £1 coffee!

            ps. Ask Joel about the Irish investor from the pub. Wow!

          • Heather YamadaHosley

            Just followed you on Twitter so I can read that post when you get to it! :)

            Buffer has really transformed the way I consumer and share content. Before I was basically saving interesting links manually and then posting them later so as not to overwhelm Facebook friends/Twitter followers. Now I can Buffer it right away and not have to think about it again!

            I will ask Joel about that, if I ever meet him! (I hope to one day, he seems like a great guy).

    • http://tomgibson.eu/ Tom Gibson

      As an outsider, my suspicion is that there may not be so much a ‘purpose’ or specific aim behind sharing this kind of information, but that it’s simply a ‘symptom’ of the commitment to transparency.

      It’s a really interesting paradigm shift, where, instead of asking ‘why share that?’, the question becomes ‘is there a reason *not* to share that?’.

      If there’s no good reason not to be transparent, then it gets shared. If it doesn’t get shared (without any good reason to keep it secret), then the ‘default to transparency’ would just be lip-service.

      It’s really refreshing to watch this happen on the Buffer blog – there are so many things, like salary secrecy, that we take for granted, when we really should be questioning why we assume them to be the default.

      So much of business is based on the ‘cloaks and daggers’ model, which is often detrimental to customer experience, so it’s great to see a real desire to move towards an open and collaborative model of business, and it’s exciting to see the Buffer team take on the perceived risks of such action and create a strong product within that new paradigm.

      • http://joel.is/ Joel Gascoigne

        Right on Tom. Thanks for saying this better than I could myself.

        In terms of one actual benefit, it is that we are living as fully to this value as we can think, and this helps us filter candidates who also thrive in this environment and believe in the value of transparency. Most importantly, by taking this step we really filter for people who are comfortable with this amount transparency. That’s important because all the other benefits (especially trust and better teamwork) derive from that.

  • Heather YamadaHosley

    Thanks for being open and sharing the new formula! As someone who likes to figure out how things work, interesting to hear the thought process behind it all. :) Was explaining this week to my dad how a company can have such a spread out team and still function so well. Went over the types of tools you guys use to communicate (HipChat, Sqwiggle, etc.) and the guidelines (such as everyone being able to see emails, etc) to encourage trust. Also, how you work to make sure people interact with all the rest of the team through daily calls and retreats. Wouldn’t have been able to educate him without your openness, so thank you!

    • carokopp

      That sounds like a fun conversation, Heather! :)

      • Heather YamadaHosley

        It was, Carolyn! :) Great to have a dynamic conversation with my dad and discuss how the workplace has changed.

  • boazsender

    This is pretty great!

  • brent_noorda

    Greatest advancement in running a business since free coffee. Love it! How does effect the time it takes to recruit? Has this prevented you from hiring very experienced people you might want or, conversely, allowed you to hire people below their previous salaries without the “you’re too qualified” problems? Have you worked into the formula what to do during lean times?

  • Unbuffered

    This is absolutely fascinating to me. While I see the idealistic thinking behind this, I do question your judgement about revealing real names and their salaries. Most companies need a different philosophy/culture and most definitely get smarter about putting the right people key positions. Yet, this seems a bit extreme.

    Does the entire team feel okay with this idea?

    • bebraw

      What’s the worst thing that could happen?

      • jellymind

        Maybe people feel “less valuable” and psychologically it starts to eat away with them subconsciously (even if they deny this, cognitive dissonance can only stretch so far).

        • John Kabler

          At ANY company, people implicitly know that salaries aren’t the same across the jobs. The worst thing that can happen to company morale, however, is when a very productive and talented employee finds out they are being underpaid by accidentally discovering the salary of a less productive but overpaid employee.

          This is a GREAT and very brave idea from these people. I’m not even sure what the product Buffer sells is, but I will be looking at it shortly. I love the idea of salary transparency.

          • jellymind

            Hence my point about cognitive dissonance, implicitly knowing something is very different than having it posted in front of your face – which is completely overlooked IMO.

          • http://praetorlabs.com/ UltimApe

            I don’t think this is overlooked. I actually believe it is an attempt to get rid of this aspect.

            There is more than one way to measure your life’s high score – not just the net earnings you’ve gained over a lifetime.

            I believe a lot of company cultures (and american culture in general) are geared so that raises and the career ladder end up being a sort of masturbatory reward system. Kind of like how being given sweets as a reward when you are younger can instill a food complex, being given raises and constantly told to succeed (monetarily) ends up aligning your values toward money. I’d almost say it is a sickness.

            I realize that some people do this without thinking, so I would imagine the best advice to give is to think long and hard about your experiences before signing up for a company with such a drastic take on transparency. If you value yourself based on how much money you make, you are just setting yourself up for failure by working at a company like Buffer.

            Tactics like this transparency one are just one part of a larger aspect of a culture that wants to push against valuing money as the sole bearer of happiness. It is an attempt to subvert the cultural programming we have been slaving away under the guise of prestige and power.

            As for me, I think the issue isn’t so much comparing how much you earn, but the subconscious belief that you are being treated unfairly. Having hidden salaries tends to lead to that suspicion – which is what I think really pollutes an employees happiness.

            From my perspective, I would get much more happiness from sacrificing some of my pay to create a more fair work environment. When I made ~$12 at one of my jobs, I was more than willing to take a pay cut to stop the other guy from feeling like shit when he found out he was being paid way less than he was worth.

            That management didn’t like the idea made me doubt the whole message that was given to me when I started.

            It is really hard to stay motivated when you’ve lost trust in your company to treat you fair. It all boils down to trust. This radical openness – while a little odd at first, does more for trust than any amount artificial loyalty or community building would instill.

            I’d rather work for a company that I feel I can trust, even if it means I don’t get to gloat on some arbitrary promotion.

            Satisfaction is a very subjective thing. I know for me as a developer with customer service/IT background, I’d much rather gloat on a shipped feature, or enjoy feeling good when I make a customer really happy. Neither of these feelings are reflected in a salary.

          • icywolfy2

            When my previous employer switched to open salaries, it basically remedied this outright, and salaries quickly leveled; and those under/over-performing quickyl had their compensation adjusted at the behest of most of the team.

            Net effect, pay levelling, and more active praise/deridement of other employees. Everyone was less likely to slack, and those that went above and beyond, were heralded by other staff and others actually petitioned for the hard-workers.

        • Fabio Cecin

          Anyone who assigns a >0 weight to their “income” on their personal “value” equation will be in psychological trouble no matter how much they get to earn.

          Anyone who compares their work to other people’s work and wonders whether they should get paid more or less than them is also in trouble.

          There is no comparison possible between jobs and people, and there is no personal value whatsoever intrinsic in the “pay” you are offered, no matter what the ‘meritocracy’ and ‘measurement’ people want everyone to believe. The pay equations can be almost anything. Nobody really cares about the spread; any reasonable one will do.

          Money flow to certain people is a macro thing, almost random. Wait until computer programming is basic literacy (coming soon) and watch those “Software Engineer” salaries drop. Wait until ‘management’ as a discrete job that someone actually has is completely tossed out of the window and watch all the PHB salaries go to zero (i.e. simply disappear).

          So, just check whether your pay plus the thing you get to do work for you or not. If they do, great. If they don’t, quit. Ignore everything else; there’s no meaning in the amount. There’s so many concrete reasons to hate a job, such as a subordination-based chain of command, commutes, having to work on stupid things the ‘company’ decides is important, or getting paid so little that you can’t afford to live or support your family (the only valid excuses to care about money). The last thing you want to worry about is relative pay differences.

      • M G

        targeted attacks based on salary? ie, whom should I attempt to “hack” Mary or Joel ?

        • Chris De La Fuente

          I hate this mindset. Who actually lives in fear that someone is going to do that?

          • M G

            I didnt say dont do it, he asked “Whats the worst thing that could happen?”

        • icywolfy2

          Move to Norway then, where the government posts your tax-filings online for everyone to see, anonymously.

          In Sweden, you can write in and get a copy of the printed tax earnings; or sign up and check online (non anonymous since 2007, you pass identity verification first, but then you can access info on everyone you want)

          Police in norway have also said, it hasn’t affect crime rates or distribution in the past 5 years either.

          • M G

            Thats a very interesting point. So it hasn’t affected distribution, despite everyone knowing everyone elses salary.

          • icywolfy2

            Well, when you think about it, people will still target wealthy
            neighborhoods for the big hits; or shadier neighborhoods that are less
            likely to have security in place.

            Will still target tourists who look out of place, less likely to do full police reports/follow ups.
            Will still target people obviously in the wrong neighborhood.

            Criminals
            still have common sense, and risk-reward calculations to make. It’s
            easier to hit a random target in a place you are less likely to get
            caught, than a specific target with many more unknowns. If you’re
            following around someone to find out when it’s safest to make a move,
            more likely to be noticed/caught.

      • http://www.krisgosser.com/ Kris Gösser

        The impact on current employment is based on culture, thus I see minimal issue if the team agreed. Your point is valid there.

        But the danger with this publics _on the web_, though, is if any of those individuals move on, they lost leverage in future salary negotiation. It’s a known occurrence that one’s most flexible time to get a higher salary is when first joining a company. That’s a big reason people jump from one company to another. Not disclosing to your (future) employer your past salary gives you leverage to negotiate higher.

        • http://www.iamalecschmidt.com/ Alec Schmidt

          I should’ve read further. My exact sentiment!

        • anonymous

          In a future salary negotiation if asked what your last salary was, you need to disclose and you can’t lie. Most background check services will find this out.

          • http://redmonk.com/dberkholz Donnie Berkholz

            You don’t need to disclose during negotiation. They just want you to feel that way.

          • Alec Matias

            At least in the United States, this is not true at all.

        • http://www.iamalecschmidt.com/ Alec Schmidt

          This conversation happened on Twitter after visiting this Discussion. Again, similar sentiment :)

          https://twitter.com/alec_schmidt/status/413824835890839552

        • http://www.financialsamurai.com/ Sam Dogen

          I have to agree with you there. With the industry so competitive, it’s easy to cherry pick.

        • David Li

          It’s becoming standard practice in some organizations to require the salary information in the initial phone screen. This is so there isn’t a large discrepency when the offer is made and everyone felt like it was a waste of time.

          For applicants that apply the traditional way it’s hard to get around the salary question. If they believe they are worth the extra money then they should be able to defend the reason why.

      • No Name

        People are totes cray cray. Everyone believes they are at least as good as *that* guy who makes $5k more. People are petty, greedy, envious, jealous, and basically nuts. For example, you’ll have arguments about experience level. “Dan is a master, but I know Coffeescript and he doesn’t!” About titles: “Dan is a Lead, but I know Coffescript and he doesn’t!”. If people were rational this would be a good idea. They are not.

        • Sharique Abdullah

          Those who are running the company and those who came up with this idea too are “People”.

      • http://ekendraonline.com/ Ekendra

        Happiness is where it all comes from – the Work. With open Happiness there are open roles and responsibilities. So, Buffer must have thought on individual’s happiness while assigning and concreting their contribution and ideology.

    • carokopp

      Great question, @unbuffered:disqus! Indeed, we had many internal discussions about this before pushing it live. :) We have all given it our stamp of approval and excitement!

      • ryen2k

        Carolyn, Can you bring to light some of the details of your role there?

        • LeoWid

          Hi there, great question, yup, here’s more on Carolyn’s role: http://open.bufferapp.com/growing-the-c-suite-on-leadership-and-titles-in-startups/ and I’m sure Carolyn might have further comments too! :)

        • carokopp

          Hi @ryen2k:disqus, absolutely! (Thanks, @LeoWid:disqus, for jumping in! :)) My title is Chief Happiness Officer. The Happiness team is focused on setting the bar for great customer service for Buffer customers. At the moment, this is focused on inbound (that is, answering incoming tweets, emails, and such) and we hope to add some more outbound once we have a Community Champion on board. :) Does that help? :)

          • http://tomgibson.eu/ Tom Gibson

            Does the Happiness team involve itself with the wellbeing of the Buffer team, too? I’ve heard it said that ‘Your staff are your most important customers’…

            Is there an HR-like role within Buffer, or does the company’s relative ‘flatness’ and adherence to transparent communication (as well as its small size) reduce the need for such an entity?

            It definitely seems like everyone on the team is content, so I wonder if this happiness is actively managed, or if it’s left to emerge as an extension of positive work practices.

          • Anita Hodzic

            Just out of curiosity, there is no phone support/customer service, correct?

            It’s all email and tweet ? :)

            If so, do you plan on adding phone support in the future?

      • Unbuffered

        I think Joel Spolsky’s company does something similar in that everybody knows what others earn. I don’t know how long you have had this policy and if you will make adjustments. I also recognize that we are all conditioned to think that compensation is very sacrosanct and personal for everybody but the top brass.

        I was also surprised at the salary levels. I wish I could hire people at those rates :)

        Anyway, I admire you guys. It’s not easy to buck the trend. Good luck.

    • patrick allen

      I admire the concept and love the ingenuity, but your building a tech business …. Salaries are mouse nuts in the grand scheme if something goes big. Call it personal opinion, but speaking as a CEO myself, your C brass should be paid less than your engineering squad… they make the magic happen and build value in your company. Google’s acqui-hiring for $750k/$1.5m/eng.

      Not to be a downer because I really do love to creativity and transparency. Just be carful to not misappropriate your expenses, Executives guide, envision, plan and execute,,,but your creatives and developers truly make it come to life

      • Andrew

        Two things to consider what makes buffer different. They’re focused on the long term, won’t be raising money again or at least for a long while. They’re also distributed and hire from anywhere in the world.

        • patrick allen

          Let me start with this… buffer is an amazing company. I’d be lying if I said only 1 team member follows this blog through Feedly.

          That said, I’ll agree to disagree with both points above AND I think you missed my message entirely (or at least avoided responding to my point.) I’ll expand my thoughts and I’d love to hear yours.

          Everyone is focused on the long term. Who doesn’t want to visit the Elysian fields? I sure as hell do and so does my team. But what you can buy their varies GREATLY based on your stock ownership and IF you make it there, you best not forget those who helped get you there. Making ~50% more than your 2nd engineer just doesn’t fly with me. To your point, if they’re looking to the long haul, I’d let those balance out over time… Maybe incorporate a ratchet for C-levels that correlates with their vesting period?

          As for the distributed team bit, I’m not sure I’m catching your drift. If you’re referring to a difference in cost of living, who cares? If cost of living is low where they are that shouldn’t mean you pay them less. Compensate based on quality, not location. I may have misinterpreted this one though so feel free to chime in,

          To my original point, I simply think my compensation along with the rest of our C suite’s (assuming they’re well endowed with stock) should be less. C-levels should put their money where it belongs… in the faith their company will succeed. If success for Buffer means a quick exit, then it’s C-level payday. If it’s long term as you suggest, its a payday for the early team while the C-level (founders) build family empires. So why earn more in the interim than the creatives and engineers that truly built the guts of what solve a big problem and printed cash?

          With the radical transparency they employ (which I love!) can you imagine how inspired the rest of the team would be if they knew the top brass was taking less because they believed so deeply in company’s future success?

          Just my thoughts.

          Sorry for the unedited ramble… our engineers are takin a quick break and shouting at me to come get my ass whooped in Call of Duty.

      • crueber

        I must say, I have a deep respect for what you just said.

        I’ve seen many C-levels that take themselves far too seriously, and have this strange tendency to believe that somehow they are the only people that matter (or ‘make it happen’). It’s true, they’re indispensable from an execution standpoint, but much like the creatives and engineers, one doesn’t have a purpose without the other.

        • patrick allen

          Thank you. I wish I was endowed with the creative wonders our tech team possesses… they inspire me daily.

  • http://www.mobileinc.co.uk/ Murat Mutlu

    Hey Joel,

    Once again, this is amazing, just wondering how the salaries are able to be paid with the funding received?

    I saw from the last post that incoming revenue from recurring and new is around $50k, and the remaining funding is around $310k.

    The monthly wage bill looks like you would run out of money quite quickly, I feel like i’m missing a key factor, could you help?

    • http://joel.is/ Joel Gascoigne

      Hey Murat! Great question. I think we could be clearer about this. So you maybe saw our Buffer for Business revenue, which is a portion of our overall revenue. November total revenue was $196k and so we are pretty much break even right now and our cash in the bank is not dropping much (if at all) month to month.

      • http://www.mobileinc.co.uk/ Murat Mutlu

        Ah that was it! Thanks for clearing that up!

      • http://www.financialsamurai.com/ Sam Dogen

        Thanks for clarifying Joel. Are you flexible in cutting wages so as to not take up all of revenue each month during downturns? It’s hard to change salaries in large corporations, but I’m wondering how it’s like at startups?

        What is your current cash on the balance sheet?

        Is there a sense that with relatively high salaries for a startup, there is less confidence from management about the future of equity appreciation?

  • http://theleanstartupmachine.com Trevor Owens

    Really impressed by this, Joel. Also interesting to see your own salary. On our team, all of the cofounders take a significant pay cut.

    • NoBillGates

      Yeah I was surprised to see their compensation over 120k.

    • carokopp

      Thanks for sharing this, Trevor! :)

    • LeoWid

      Thanks so much for stopping by Trevor!

      Great point, in fact, I think we might do another post on that topic.

      The short answer from my side: A lot of Silicon Valley startups are focused on an (eventual) exit, so they focus less on salary and more on equity, which makes sense.

      At Buffer, both Joel and I are committed to stick with it for a long time. In order to make this sustainable, we wanted to tag CEO/COO/CTO/CHO salaries in a way that a more traditional company would do it who is also focused very long-term (more focused on salary, than equity).

      Another point (which I think Joel will discuss in future posts) is that the founder salary has changed significantly over time, but doesn’t play a role anymore now. We’re now CEO/COO and being a founder is more a fact, it plays less into the salary decision.

      Let me know if that makes sense at all and I think Joel will also go into more detail on this!

      • http://www.financialsamurai.com/ Sam Dogen

        I think it’s GREAT you can get to earn a ~$150,000+ salary as a CEO and retain your options. The more cash you can bank, the better given we all know that monetizing equity is illusive. Did you disclose how much ownership of the company you have?

  • Anna Zocher

    Great article – really interesting to see a company that truly lives by transparency. Don’t think I’ve ever come across an admission like it.

    I would love to hear more about the Buffer Bootcamp phase. I assume this is standard protocol for all new hires? What does it entail? Any details about your hiring process in general would be great to hear about.

    • carokopp

      Hi Anna! Great question. Yes, standard, for all employees. :) A bit more info in this post: http://joel.is/post/61468652377/what-no-one-talks-about-when-building-a-team-letting

      • Anna Zocher

        Thanks! Exactly what I was looking for.

        • carokopp

          My pleasure, thanks for asking about this and thus furthering the conversation. :) It’s such a fun one for us! Let us know if we can answer any other questions at all for you!

  • Aleksey Korzun

    While this is pretty cool, how would you deal with a hiring new employees that might match your current senior staff experience wise but not pull their weight?

    Your current staff will know that they are compensated on the same level, why bother with A player productivity if you can earn the same as C level player.

    You also have engineers earning $94,000 and senior engineers earning $104,000?

    How does that make sense, after taxes pay is pretty much the same.

    • iwaffles

      I think that Buffer employees care a little less about the numbers and more about the quality of the company. It’s a good company to work for, and the people who work there really love what they do. They have some cool perks, too.

      • carokopp

        Thanks for jumping in, Matt. :)

      • Aleksey Korzun

        While that’s great, that’s not really an answer.

        Both A and C players get the same benefits and perks, that does not make A players want to work above C level performance.

        Let me guess, you going to tell me everybody at your company is an A player.

        • iwaffles

          Might be good to watch this: http://www.youtube.com/watch?v=u6XAPnuFjJc

          Basically, money isn’t a good motivator for quality of work in this industry.

          • Aleksey Korzun

            That was not my point and I’m pretty sure you will not retain top engineers for $100,000/year and < 1% equity.

            You seem to want to jump around my concerns while pushing 'quality' and how 'awesome' the company is, so I will no longer entertain this discussion.

            Take care!

          • iwaffles

            I think to some people, money isn’t everything.

          • screwyouregistration

            Ya, if you don’t live in San Francisco. However, to live semi comfortable you need to make more then this. I couldn’t imagine anyone with a family making this low.

          • Alec Matias

            I’m not sure what kind of answer you’re looking for. The goal is to have all A players, which I imagine they validate for through the 45-day probationary period.

            If after that point one person slides and becomes a B or C player, they probably ask him/her to improve or consider parting ways with that employee.

            Alternatively, if they’re okay retaining a C player, then the A player would likely be considered for promotion within the seniority levels, which they announced recently with a few employees.

          • Jeff

            Umm, you exit the C performers. Done.

          • schaep

            In my area, engineers with 10 years…..

          • http://www.financialsamurai.com/ Sam Dogen

            Could you let me know who they are and where they work? Could be good for all! thank

          • http://www.financialsamurai.com/ Sam Dogen

            I agree with you 100% for retention.

            I hired 29 year old MBA grads for $150,000 – $200,000 the first year in finance. The market is pretty efficient b/c even getting paid $10,000 less than someone will motivate someone to change if they are relatively young in their careers.

          • Julian

            MBA and other finance people are bred differently than engineers and others. MBA’s a educated in a system that puts your $ value above all else and the most important thing in the world, which when in Investment banking or stocks makes sense. They tend associate this value with themselves also making it a personal matter. From my experience others and engineers notably SE’s don’t associate their earnings with their value a greater emphasis is placed on the work environment – coworkers – management style ect.ect.

          • http://www.financialsamurai.com/ Sam Dogen

            Software engineers don’t care as much about income? I wonder why literally half my Haas Berkeley class were engineers then. Do you have your MBA or are you a software engineer?

            But that gives me a good idea of hiring software engineers if they want to get paid less for a better work environment. I’m all for a more loving work environment!

          • icywolfy2

            Depends where you are.
            Back home,
            Top Engineers barely hit 80k after 10, if they’re amazing.
            Senior Engineers in this area make 55k after 5-8 years.
            Junior Software devs make 30-35k.

            I was happy earning 40k, living quite comfortably, and travelling a lot.
            Moved to SF, started earning 100k.
            Moved to North Dakota, salary dropped to 60k, but living like a king.

        • http://redmonk.com/dberkholz Donnie Berkholz

          I think that’s why the 45-day probation period exists. C players are not invited to stay on.

        • icywolfy2

          And from previous experience; employees are more likely to actively voice people who are routinely slacking/not pulling their weight. Rather than just hold a grudge, try to slack off too, or just gossip.

          It’s surprisingly effective at leveling pay bands to a small margin. And people actively petition for others to get raises, as those over-performing/valued were now recognised as earning the same and deserved more.

    • Andy Matthews

      There’s an excellent parable regarding this very thing in the Bible (Matthew 20:1-16). Regardless of how you feel about the Bible, there is wisdom to be found in this stoary

      Essentially, each worker agrees to a certain salary when they’re hired regardless of what their fellow workers make.

      • stderr5150

        What’s so wise about that? All it does is enable employers to treat people unfairly.

        • commadelimited

          If you join a team at $90k a year and feel super happy with that salary, is it fair to be unhappy with a teammate who asks for more and gets $100k?

          • stderr5150

            That’s not relevant. I don’t want people using the bible as an excuse to pay people an unfair salary. The “fair salary” argument mainly applies when at least one party isn’t “super happy”. If you’re “super happy” working for free, that’s fine by me. Hopefully you’ll still be “super happy” when you can’t afford college for your kids and have to take out an expensive loan.

    • LeoWid

      Hi Aleksey,

      Great question, I think you’re right, it’s certainly a challenge and part of becoming a “senior” member isn’t just tied to experience, but productivity and output as well – if you look at the recent promotions we made: http://open.bufferapp.com/asa-andy-and-colin-are-now-senior-members-of-the-buffer-team/ you’ll see that actually a big driver for giving Andy, Åsa and Colin a promotion was because of how much they contribute to Buffer.

    • http://tomgibson.eu/ Tom Gibson

      It’s probably worth bearing in mind that one of the stated core values at Buffer is “be a ‘no ego’ doer”.

      In that context, it seems like open salaries have the effect of filtering out those who gear their working activities according to ‘what’s s/he getting?’ or ‘what I can get out of this?’ – it’s a method of helping to weed out the ‘no-ego doers’ from the ‘pro-ego doers’.

    • http://www.financialsamurai.com/ Sam Dogen

      The Senior Engineer earning $104,000 might be secretly looking to leave. Who knows?

      My senior engineering friends at Google make $200,000 – $275,000. Depends on stock upside.

      • p0zart

        It’s not like every Senior Engineers are with the same skill and experience. it’s just a title.

        • http://www.financialsamurai.com/ Sam Dogen

          That’s true.

    • http://www.financialsamurai.com/ Sam Dogen

      This really is one of the biggest risks. If A performer thinks they provide $100,000 MORE value but is only getting paid $25,000 more, A performer could slack way below and start hurting the company.

      It’s just human nature.

  • M G

    How do you tackle the discontent that may come from implications due to disparity? Do people ask “I work 40 hours a week as a happiness hero and bust my butt to keep people happy, why does the CEO make more than 2x what I do?”

    I know a 2x multiplier is ultra low compared to the averages, but in your case its also more open and in your face.

    • carokopp

      Great question, MG! The short answer is, if people have concerns, we explore them as a company. :)

      • M G

        I see you guys as kind of halfway between traditional capitalism and more cooperatives like mondragon or SemCo (from the book Maverick)

  • causeby

    Golly it’s amazing how a little transparency results in a CEO making double his underlings, instead of 10,000x.

    • http://www.hypedsound.com/ jonathanjaeger

      While I appreciate the transparency and like what Buffer is doing, keep in mind they’re a startup with a couple million run rate and Series A/angel investment. It’s not Microsoft/Exxon/Google/Apple/Cisco, so they couldn’t pay 10,000x even if they wanted to.

    • elliminopee

      If their revenue is in the $1M-10M range, I actually would be pretty surprised if he was making any more than that.

      Also, the 10,000x figures usually come from comparing the total value of all stock options of Tim Cook which will vest over his tenure as CEO with the pay of a janitor.

      • causeby

        Yep that’s the comparison.

        • elliminopee

          Well, comparing the CEO’s salary here to that of a well-qualified and skilled software developer on the same team is really not the same comparison at all.

      • Jeff

        The 10000X figures usually come from that year’s compensation package (not all options vested over his tenure) compared against someone a few steps above janitor. The janitors are usually outsourced.

        For example, Tim might have 100M in options that have already been granted to him over his time as CFO and in the first few years. This year he might get a compensation package that includes a Black Scholes valued $20M woth of options. Those options might end up being worth $0 or $50M once he exercises them and cashes them out, but for now we can assume they’re “worth” $20M. The 10000X calculations are not going to take the 100M he already has, they are only talking about this year’s compensation.

        In the case of Apple however, it’s probably compared to someone working in their retail stores for $9/hour.

    • carokopp

      Agree :)

  • ryen2k

    I would absolutely not want the outside world to know how much I make (outside of immediate family members). Did all employees at buffer agree to this? What if someone told you they didn’t want it to be public?

    • John Kabler

      This is a cultural quirk, based on the lie that people don’t have a pretty good handle on what you make anyway based on your lifestyle, dress, education, job, apartment locaton, etc.

      It also just happens to completely play into business owners hands. Business owners who want to pay as little as possible LOVE people being hung up on their salaries being public knowledge. It prevents people from easily knowing whether they are being paid at a fair market value or are being exploited.

      Managers love underpaid employees because they easily get fatter margins, and therefore HATE when people tell each other their salaries.

      • http://www.dragonblogger.com/ Justin Germino

        It in’t just a cultural quirk unfortunately people get judged based on their earnings by peers, family members and others. So it is a valid point about sharing that publicly, though you tend to see that more at the under 50k tier than over 50k tier.

        • Jeff

          You’re both right :-)

      • julianmcnally

        Good points John.
        And by the way, those managers are kinda dumb. I know I would want my employees wondering how to improve their work rather than looking over their shoulder or stewing on what the guy/girl in the next cubicle is getting.

    • Angela K VandenBroek

      Do you know that all American public employees have public salaries (schools, universities, agencies, police, etc.)? Mine gets posted in the news paper every year. So, really, I don’t see this being particularly scary or innovative.

    • LeoWid

      Hi Ryen, great point, I think you’re right, there’re a lot of people who wouldn’t feel comfortable at all with this.

      We try our best to both attract people and communicate with people how transparent and open Buffer is, so that both sides will enjoy the way we go about things here at Buffer and know beforehand what will happen! :)

  • Brian Cody

    I noticed there weren’t numbers for sales people – any reason for that? Are there no sales people at Buffer?

    • carokopp

      Great question, Brian! No sales people at Buffer.

      • Brian Cody

        Wow! Are there any posts about why/how Buffer doesn’t have sales people?

        • carokopp

          Ah, maybe we should write a post on that! That’s a good one. At the moment, we haven’t had a need yet. We will probably explore this again soon now that Buffer for Business is launched. Before this point, we have gotten all revenue from upgrades (from our freemium model). :) Let me know if we can answer any other questions at all for you on that!

  • http://pixelmonkey.org/ Andrew Montalenti

    What do these “$XXk/$m revenue” values mean? e.g. does “$12k/m revenue” mean a $12k bonus per million in annual revenue for the company? So if you guys made $2M annually, your CEO would get a $24K annual bonus?

    • carokopp

      Exactly, though it’s not quite a bonus, it’s part of the salary each paycheck. :)

      • http://www.financialsamurai.com/ Sam Dogen

        Thanks for clarifying! Was wondering the same thing.

        Good incentive.

  • ksoltysiak

    Maybe it’s just me, but I don’t like the fact that the location comes into play.

    While it’s true that the cost of living vary greatly from city to city, I think paying someone living in Delhi 22k less than somebody living in SF/Paris/whatever sends the wrong message.

    That being said, It’s really great from your company to be this much “transparent”.

    • Joe Anzalone

      Do you know of any companies in Delhi that pay as much as a comprable company is San Francisco or Paris?

      • Visy

        You pay for talent, experience, capabilities. What does the location matter?

        • Merne Asplund

          Cost of living. Rent in NYC is $3k/month, rent in Minneapolis is $600/month. Very simple.

          • elliminopee

            The employee’s rent has nothing to do with the value they bring to the company. Visy/ksoltysiak are saying that, if an employee is compensated based on their contributed value to the team, it follows that location is irrelevant in determining compensation.

            I think they’re technically correct, if compensation were always fair and employees were actually paid according to their value. But it’s not fair and they often are often paid according to the whims of the market rather than their value as an employee. Because other jobs in Delhi pay so much less, someone from Delhi who wants to stay in Delhi lacks negotiating leverage and will thus be paid less.

          • Merne Asplund

            …except then the person in Delhi has a take-home pay now that is much more than the person having to pay rent in NYC.

            I hear what you’re saying, and in general I think I agree. I don’t think, however, that cost of living is a “whim of the market.”

            Compensation has to take into account cost of living, or its not fair.

          • elliminopee

            The person in NYC also gets the privilege of living in Manhattan. That’s a luxury that few people have.

            To offer a more extreme example, let’s say you have a choice of taking a job in either Manhattan or in a small rural town of 10,000 people. You’re offered different salaries in the two locations to adjust for COL. In Manhattan, the salary would only be enough for a decent studio apartment. Therefore, to be fair, the salary in the small rural town would be reduced to around $25k so that you could also only afford a small studio apartment there as well.

            Is that really fair? I’ll leave that up to you, but I know which job I’d take personally.

          • Merne Asplund

            I don’t think you’re understanding what taking cost of living into account for salaries is all about. You don’t ever reduce your salaries. A companies baseline for salary is dependent on the market in which they work. If you hire from a market elsewhere, you’re expected to pay them extra if they live in a city in which the cost of living is more. Sorry, but this is really how it works.

          • elliminopee

            Er… that’s just semantics. Whether you want to say the base salary is the lower one and it’s increased for the higher-COL area or the base salary is the higher one and it’s decreased for the lower-COL area is pretty irrelevant. Sorry, but your post is not really a response at all and is just an evasion of the example I gave.

          • Jeff

            It really has nothing to do with cost of living. You can tell yourself that morally it does have something to do with that to make yourself feel all warm and mushy, but it actually has everything to do with that the talent market demands for salary. As I said above, it’s wasteful to pay talent $100K for a job that you can get done for $30K. In a market where top talent is demanding $30K, you can pay $40K and get the cream of the crop. Paying $100K for that same talent is stupid. There’s no other way to put it, just stupid.

          • http://modeista.com/ Martin Wawrusch

            Location by itself is a value. An employee who sits next to me is much more valuable than one who is in a different timezone.

        • http://www.dragonblogger.com/ Justin Germino

          Nearly all mid to large companies have to take location in as a factor and assign area differentials, the bottom line is it costs more to live in certain cities and the cost of living has to factor into the salary for employees in those cities. This is why the hourly rates for even McDonalds are much higher in CA than in AZ for example, geographic region is always a factor and not just Federal or state wage minimum standards.

        • Jeff

          You pay what the talent market demands to fill a role that gives your company value.

    • NoBillGates

      Yeah really disagree here – it makes perfect sense. Cost of living and supply in demand.

    • ZoubIWah

      with their formula (which again seems close the to “market” formulas they use internally) 22K in say, SF, and an average 2.5k 1 bedroom ,will leave you with less money than +0K in Delhi (any any nice town in goonies if you want a decent way of life). Not even taking into account additional expenses, just the apartment rent.(2.5k*12= 30k/year) (delhi is about 1200/year for 1bdr…)

      So it seems pretty fair to me.

    • Bob Foster

      Paying someone in San Francisco _only_ $22K more than someone in Hanoi sends the message, you’re not going to be able to afford to live in San Francisco! The CEO would have trouble finding a decent apartment in San Francisco at his salary.

      • elliminopee

        “The CEO would have trouble finding a decent apartment in San Francisco at his salary.”

        That seems like a pretty huge exaggeration. With no dependents, you could live a fairly luxurious life in San Francisco on a base salary of $158k. There are tons of decent and far more than decent apartments in the $2.5k-$3k/month range, which is trivially affordable on that income. You could pay $3k/month in rent, max out a 401(k), max out an IRA, and save $2k/month in pure cash on top of all the retirement savings, and still have nearly $2k/month for other expenses.

        • anonymous

          “with no dependents” – haha

          • elliminopee

            Right, because it’s absurd to imagine a person who doesn’t have kids. I’ve never even heard of such a thing.

            Also, obviously your spouse would make $0/year and you would have to bear the full cost of both your spouse and your kids. It certainly wouldn’t be the case that your spouse might also make $100-150k, thereby making the cost of a 2-3 bedroom condo also trivial.

          • Jeff

            So what you’re saying is, as long as you are a c-level exec or have 2 incomes you can do OK in Frisco; meanwhile, offshore workers can get a haircut for $2 US, a 3 course meal for $7, and have their apartment professionally cleaned 4 times, including laundry service, for $12 a month–and they only make 20% less?

          • anonymous

            I live in a high cost of living city with my wife and child. 1% vacancy rate on rentals means landlords name their price and increase every year. 1 year matt leave dropped us to 1 income. After that year, daycare – $1,300-$2,000 a month (20% vacancy rate on pre-schools means they can name their price too). Have to live away from the city to find affordable housing – but commute & parking is $300-$500 per month – yes, I could take transit, but I want to get home in time to see my kid before she goes to bed. Oh, and my spouse will never make $100K/year teaching. So, yes, your general statement applies with no dependents, but with a spouse and a kid (or worse several kids), forget it!

          • Jeff

            It really has nothing to do with cost of living; like always, it’s about supply/demand. And Buffer is being EXTREMELY generous to their offshore resources.

        • Bob Foster

          You must not live in San Francisco. Your numbers don’t add up. The effective tax rate on 158K/year is roughly 42%. He’s taking home ~7300/mo. Forget about that $2/K/mo. in cash savings, he doesn’t have the money. Yeah, a person with no dependents might be able to find a place near work for $3K/mo. but a real person with a wife and maybe a kid is paying at least $4K/mo. for anything big enough to hold them anywhere near the city center, and they’re spending way more than $2K/mo on living expenses.

    • Jeff

      Supply/Demand. There is ample supply of employees who are able to work for $30K in India, and who can live like kings on that salary, doing a similar but not entirely equivalent job of someone in Frisco for $100K. It’s a no-brainer to utilize offshore resources to stay competitive, but it’s silly to pay them the wages demanded by employees in the US who have to pay 3X, 4X, or 5X as much for the services that they consume. Any company that pays 100K to offshore resources that otherwise go or $30K is paying $70K too much and is putting themselves at a disadvantage to other companies who can get the same talent for much, much less. I’d love to see it be the case that offshore developers demand 100K. For one thing, I’d make a lot more money. But, that’s just not the case right now and it’s foolish to pay offshore developers 2X the market rate.

  • http://redmonk.com/dberkholz Donnie Berkholz

    I am curious about the apparent conflict between your “live smarter, not harder” value and paying someone for a certain number of days per week vs getting the job done.

    • carokopp

      Great point, Donnie! Interesting question for us to ponder. :)

      • Jeff

        You’re think that she could work 4 days a week and that would be fine as long as she was performing at 125% on the days she was there. Hell, theoretically why not work 1 extremely productive day a week. :-)

  • Nicholas Nash

    I absolutely love this and cant wait to see the outcome… I will surely be copying this in some way in the future. I think too often this secrecy is used against the individual, and by opening it up it keeps everyone accountable.

  • http://dentedreality.com.au/ Beau Lebens

    This is really fascinating. I’m curious if you have (or will) adjust salary if someone moves? E.g. If someone stars with Buffer in San Francisco (+22k) and relocates (their choice, since you’re distributed) to Hanoi (+0k), does that mean they would also take a 22k pay cut as part of that move?

    Keep up the openness.

    • Jeff

      Given their formula, I’d think you would have to adjust. My company keeps your existing salary, but there are measure in place that will bring you back to the median for your new location over time. So, in the expensive location you might have gotten a 5% raise, where you’ll only get a 2.5% raise in the cheaper location. Do that for a couple years, plus not giving you as much of a bump when you get promoted, and you will adjust back to the norms for your role.

      • http://dentedreality.com.au/ Beau Lebens

        Yeah my guess is that they’d adjust as well, but that’s a pretty rough sell as an employee. Adjusting to a pay cut is significantly more difficult than adjusting to a pay raise :)

        That’s an interesting approach that your company takes.

        • Jeff

          Yea, that asymmetry has always amused me, especially as it pertains to economics and inflation/deflation.

  • jim

    What purpose does this serve on the company’s bottom line?

    • anonymous

      they listed transparency as a value, not bottom line. This serves the transparency value.

  • Brad Ruderman

    I would be interesting to understand how you give out equity? Would you share current outstanding shares? As well as what each employee’s options are?

  • http://www.jimsc.com jim rubenstein

    I like this idea, an open internal formula for salaries. Maybe not so much with publishing everyone’s final salary, but to each their own.

    I’m curious about the experience multiplier. The scale is very subjective, who makes the decisions as to which team member receives which multiplier? People generally won’t give themselves a “Master” title because it’s like saying “I’m done, can’t learn anymore” which is usually not the case. It’s evidenced by everyone in your list having less than a Master rating as their experience multiplier.

    So who decides? And what criteria are used to make the decision?

  • http://www.iamalecschmidt.com/ Alec Schmidt

    Obviously, not all companies can be this transparent without having employee morale drops or other issues. That being said, I applaud Buffer for taking this leap. I’d assume Buffer asked it’s employees permission, or informed them when joining, that this could (or would) happen.

    One question — Do you feel like Buffer is potentially hurting the salaries of their employees future positions? Sure, most companies are going to offer you more than your previous salary. However, publicly displaying this number gives future employers leverage in negotiating a salary with the employee.

  • ZoubIWah

    caculated my salary with this, had nearly exactly as much as at my current company. So i’d say it seems you did the math properly (as in it matches reality, obviously, I never thought non-engineers necessarily should get twice the salary of engineers ;-)

  • Thomas Klokosch

    Thanks for sharing this. Very inspiring.

  • Dan Portillo

    I’m all for publishing salary bands, I think individual comp is a different matter. After 15 years of startups you learn that not all contributors are equal. There are always a couple of people on each team that carry most of the water. By publishing salaries, you limit your ability to compensate outliers.
    It may work now, but will likely breakdown at scale. You don’t want to limit your flexibility in the future or have to do calculus every time you make an offer.

    • LeoWid

      Hi Dan, thanks for stopping by and awesome comment! I think you’re absolutely right, there’re likely going to be a lot of issues as we scale this out further!

      We’re going to try our best to stay as open-minded as possible and adjust the formula as needed over time! Will be a fun challenge to see how that goes! :)

      • Jeff

        Don’t waiver, it can scale, you just need discipline and enough levels of indirection in your formula. Not all contributors are equal? Great, give the people contributing more a higher multiplier. If they are doing that good of a job, then it shouldn’t be hard to give them public recognition. Lack of transparency leads to perverted compensation schemes that reward the wrong skills. Do you really want to be paying the most money to engineers who are best at negotiating?

        • Matthew_Reilly

          Public salaries lead to jealousy, in my experience. A person’s salary should be the knowledge of only that person and the company. I don’t see the value of publicizing that information. Salary negotiation is a very valuable skill that should be rewarding.

          • Jeff

            How do the salary negotiation skills of an engineer benefit the company? You should be paid according to your benefit to the company and given 2 engineers with equal talent/skill in all areas except 1 of them is “better” at negotiating salary, the one who is “worse” will probably perform better as an engineer. No need to impose your personal moral feeling about who should and shouldn’t be rewarded. If it helps the company then you should benefit, if it doesn’t then you shouldn’t.

            Public salaries only lead to jealousy if they are not methodical and formulaic and are instead arbitrary and based on things other than the categories outlined above + performance. When you have a formula that says we pay Y for X, then all you need to do to justify salary disparities is compare yourself to other people in these categories. There is no jealousy if pay is justifiable.

          • Matthew_Reilly

            The best engineers simply won’t work for that company, then. Any company that publicly lists a salary that isn’t negotiable won’t get the best engineers. The best know what they are worth and will fight for it.

            Negotiations don’t benefit the company. You are correct. And there is no reason they should. Workers have rights, too. This publicity reeks of commodification in the name of “openess”. Workers have power. One of those powers is salary negotiation. Taking that away really gives nothing to workers trying to get an honest wage.

            Also, no wage “calculator” like the one described here is perfect. How do you gauge expertise level? Living expense? Seniority? Things like this turn off the most competent people. Salary isn’t a game for the CEOs to play with.

          • Jeff

            Your views are quite cynical.

            If the company finds it difficult to attract and maintain top performers they need only modify their formula. For example, suppose they added a 2X “jedi” multiplier in addition to master, advanced, etc. I know a few people I work with who should be earning 2X other people who are in their same role because they are that helpful to the company.

            Workers rights have nothing to do with this. Workers who want an “honest wage” that they think is higher than what they can get at this company should steer clear; it’s up to the company to make sure the compensation scheme is attractive enough to bring in the talent they need. As for things that don’t benefit the company being valuable here, that’s absurd. You should be paid commensurate with contribution. Anything more is not fair to the other employees who are being paid from the same pool of money. The market will pay what the market will pay for your product/service. For you to get paid more based on your “negotiation skillz” necessarily subtracts from what someone else can be paid for their ACTUAL skills. This leads to either lower pay or missing out on solid prospective coworkers for those already employed by the company. What this reeks of is “a fair compensation system need not be administered via secret negotiations”.

            It’s probably wrong to pay X for Y number of years of “experience”, and, unless you’re hiring some celebrity rock-star coder who’se done something crazy like rewritten the entire unix kernel, it’s obviously difficult to gauge what a new employee’s contribution is going to be. The 45 day probationary period is good for that, and their periodic review cycle will also help calibrate. That being said, these same problems exist for any compensation strategy. Paid is typically tied to these exact same criteria in most companies, just via a secret formula or via a public formula, but with secret salary targets. I for example know the formulas, but only know the salary data for the roles that report to me and I don’t know the target salary for my position. If you deserve more compensation then you will be promoted to a position that justifies that compensation rather than just giving you an extra $10K and then giving you a role where your expectations are the same as someone making $10K less than you. This has also helped lead to a gender-based salary disparity that is under 1% when analyzing across cohorts in my company. When you allow “negotiating skill” into the picture you increase this disparity because men typically negotiate harder, whether their confidence is justified or not. This necessarily leads to women being paid less. Companies “can get women cheaper”, so they do. If you eliminate the fluff that is “negotiating skills” then you bring us closer to a more equitable world. (that’s not to say the problem will be solved, we do still have a problem promoting extremely capable women)

          • Matthew_Reilly

            Being paid commensurate with contribution is all well and good. Certainly that would be fantastic if it always worked out that way. The problem lies with determining how valuable an employee is. I think it is odd to say that a senior engineer with X years experience living in city Y is worth Z dollars a year. No formula, no matter how complicated, could accurately determine that worth.

            Working at any job, especially a startup, can be a very personal process. To replace a discussion with higher-ups with a mathematical formula seems wrong to me. We’re not robots.

            And I don’t think it’s “secrete negotiations”. Any prospective employee has to trust the leaders to make good decisions about hires. That includes salary negotiations.

            I would hesitate to work for a company that already determined my worth to them without even meeting me. How could they possibly know?

          • Jeff

            It’s not that you have a value, it’s that the role you will be filling has a value. If you think you are more valuable than that role then you need to prove that you are capable of fulfilling that more valuable role. Maybe you’re an engineer, but you also have a ton of marketing knowledge and your ability to contribute as a growth hacker can help justify a higher paying role as “VP of Growth Engineering” (to make up some BS hypothetical role). It’s not your personal worth that matters, you might be a great fly fisherman… I don’t care. Your ability to contribute and help benefit everyone from the lowers level employee and the single-share stock-holder up to the CEOs and founders is what actually matters. We agree on one thing, how you can contribute is hard to gauge. But, open vs. closed salary doesn’t help or hurt that. The company values the role, and you are the one telling them “I think I can fulfill that role”. If you are applying for a job as a janitor, I don’t care if you have a Ph.D in Physics, you’re going to get a janitor’s salary. If you are applying for a job as a “senior backend engineer” and you tell them “but I am actually worth $250K” what do you expect to happen?

          • Matthew_Reilly

            Well I think an already-decided-upon salary does affect that. The company is effectively saying that any person is worth $X to the company based on this formula. Your example reveals this. What if I see a position, but I also have experience that can’t be gauged with a formula? In startups, the ability to wear many different hats is very valuable. I was hired for that exact reason just a few weeks ago.

            I think the big question is this: Do open salaries attract more/better qualified applicants? Does it attract people who aren’t good at negotiating? Does it attract people who simply want to “fill the mold” and not break any rules?

          • Jeff

            No company hires for a role they don’t need. At least not a good one. The company is saying “We need a role filled, this role is worth X in the market, we need to pay someone X to get this job done or we will not be competitive since we’ll have to pass more cost on to our clients that other companies don’t.”

            If you can wear many hats then great, perhaps that justified the “lead” monkier rather than “senior”. I’ve had months as a developer where I wrote no code because I was filling gaps where the company needed them filled. If my role drastically changed from developer to something else I might argue for being given a different title and pay that aligned with that new role. But “I’m performing the same role, but should be paid more than market rate” is just an inefficiency that companies don’t need.

          • Jeff

            I think open salaries attracts open people who prefer the free flow of information for the good of themselves, for the good of the company, and the good of mankind.

            (perhaps that’s a bit over the top)

          • Jeff

            As for discussions with higher-ups, we’re not replacing these, they are still necessary. You just have to work within the framework. In this discussion you could find out that you are over qualified for the role for which you are applying, and that you shouldn’t take the job because they can’t pay a quarter million for a lead developer and they aren’t currently hiring the VP of Engineering position for which you are qualified. I have had interviews before where my and the company’s definitions of “Senior Developer” or “Lead Developer” were markedly different. I’ve even come across one company that switched these 2 roles. None of this is made better by hiding the salary data. If anything public salary data would have helped expose this. For example, I know I can’t work for this company because, depending on the equity, they’d have to hire me as their CTO for it to begin to make sense financially. They already have one of those so…

          • http://modeista.com/ Martin Wawrusch

            Great comment

          • Jeff

            “The problem lies with determining how valuable an employee is. I think it is odd to say that a senior engineer with X years experience living in city Y is worth Z dollars a year. No formula, no matter how complicated, could accurately determine that worth.”

            Sure, it’s not easy. But how does private salary information help that? How is a company supposed to negotiate with you without having any formulation to fall back on? Why is your “great dinner” with a founder enough information for them to know how much you are going to help the company? The company needs role X, you said you can do role X, the market pays Y or role X, why should you get more than Y without at least first proving your value? If Y is way off then don’t work there. If it’s close then work there for a year at what they consider market rate, and then they should be able to better calibrate your contribute and give you a bump to help pay what you are actually worth.

            Again, none of this depends on private negotiations.

          • Jeff

            Also, location-based pay is extremely common. I cheer every time a developer decides to work remote from some podunk town where they can live like a king for $100K. We don’t need to pay them as much going forward, and we get similar value from them. This helps everyone in the company and makes us more competitive which can eventually help our customers and their customers as we can pass on that lower cost to the consumer of our products and also increase our subscriber base due to the lower price. It’s a win, win, win, win… win.

      • Shuba Bhaskaran

        Buffer team, I love the “default to transparency” value, and am sure you’re pretty serious about it. But don’t you think that salary – when understood quite literally as the $ value of an employee – is hard to put into a formula? It’s a great place to start, but I would be disappointed if it ended there. Some employees take that extra step, walk that extra mile. Then what? Do they deserve the same as the rest of the gang that just did what they were supposed to do? Am not an HR or salary expert, but where’s the “magic” in it? When someone does that WOW feature build, or brings in 2X more revenue for the company, does she do it knowing she’s going to be paid “exactly” x% extra? Am sure you must be working on it :)

    • http://www.financialsamurai.com/ Sam Dogen

      Dan, the salary band idea is a good one. I think you’re spot on there. Numbers are perfect. People and contribution are not.

  • Jeff Vyduna

    Really interesting. Is Buffer’s cap table transparent as well? There’s an interesting discussion to be had about how employees value equity. For example, the CTO didn’t take equity?

  • brandonparsons

    Hi there! At Buffer, what is the difference in roles & responsibilities between the CEO & COO? Has it been the same since you guys started?

  • Laura Hamilton

    Wow, $1.4 million in salaries on only $250,000 in revenue? Is that right?

    • Alec Matias

      Sounds like in their previous blog post, they’re doing roughly $2.5m in annual revenue.

      • Laura Hamilton

        Oh, oops, I was looking at the business revenue instead of overall revenue.

        Makes more sense now. Thanks!

        Interesting what they’re doing with transparency.

    • LeoWid

      Hi Laura, great question, indeed, we’re doing revenues already, here’s a breakdown: http://open.bufferapp.com/how-much-revenue-did-buffer-for-business-generate-in-november/

  • http://haeckdesign.com/ HaeckDesign

    As a Designer w/ an Econ education… I must say I’m impressed. It may not be the perfect step to bettering a work environment, but it is a step… and a step many larger antiquated companies may never get around to making.

    • LeoWid

      That’s really great to hear! :)

  • Alec Matias

    Is the experience multiplier set in stone when they join the company? Or can it rise and has it happened before? What were the criteria?

  • jenslauterbach

    I’d be interested in how “seniority” and “experience” is determined? Is there also some formula? Like say the number x of years in the company makes you a “senior” or will give you “master” status?

    Will it be determined by your boss or your peers?

  • anonymous

    lay-offs day is gonna be fun

  • noone

    Officers not only have two job types (operations and executive), but also four levels of experience unavailable to all the other job types (VP, C-level, COO, CEO). It doesn’t seem to me that transparency is all that useful in such a lopsided and unfair system. I also don’t understand the location bias. Essentially, you’re saying people that live in certain places are just worth less. In other words, the cost of living excuse.

    • LeoWid

      Hey there,

      Thanks so much for contributing here, this is super valuable for us as we learn more and think about improving the formula further.

      To be honest, we’ve struggled about this part for the longest time and think through what makes sense here. We had a lot of trouble deducing a base salary for CEO/COO and tag it to any of the other base roles.

      Instead, these two roles feel quite different to all the other roles we have, overlooking the entire company. So we tried to come up with a reasonable base salary and growth rate with $m revenue that reflects the responsibility and seniority of the roles.

      I’m not sure we made the right call here, so we’ll definitely revisit, just wanted to lay out our thoughts.

      The Senior, VP, C-level, COO, CEO could be seen more as a ladder of progression inside Buffer, so this should be available as an opportunity for everyone. Here’re 3 people who climbed one up recently: http://open.bufferapp.com/asa-andy-and-colin-are-now-senior-members-of-the-buffer-team/

      • noone

        Yes, but is an engineer or content creator able to go up to VP and higher levels? Certainly it’s possible, but beyond lead, it would seem the opportunity is scant and available only to one person. On the other hand, an executive can climb all levels. Perhaps parallel levels for non-executive, non-managerial “professional” roles might be something to look into.

  • Justin Warkentin

    I’m a bit intrigued. It seems to me that the idea of a salary formula is fundamental to the ability to be transparent about salaries without employees feeling like they’re being paid unfairly. I get that. At the same time though it seems like it creates another problem because it limits the flexibility you have to negotiate on salary to hire the talent that you want.

    For example, I currently work for an awesome company and make about the same as what I’d make at buffer, it appears. Consequently, if you wanted to poach me from my company you’d have to make me a more enticing offer. No matter how much you liked me or I liked you, I wouldn’t even consider moving for probably less than at least another 10-15K. And if it required me to move to a more expensive place to live like SF then it would require a lot more.

    How do you deal with that? Just don’t hire the talent you want because they don’t fit the salary model?

    • DaBeast

      They probably don’t want people whose sole motivation is the salary in the first place.

      • Justin Warkentin

        Fair enough. But continuing with my example, I should mention that despite what I said, salary isn’t my sole motivation. Far more important to me is the project, the company culture, management and environment, and even perks and benefits play a role.

        But in the end, why do we all get up and go to work in the morning? It’s for the paycheck. No matter how much I love what I do, the company I work for, and the perks and benefits, I would not go to work if I wasn’t getting paid. Salary is still important, though it’s not the only factor. Unless somehow they had better perks and benefits, a better culture and work environment, and a more exciting project to work on (all of which would be hard to do), the only they they would have to entice me is a better salary.

        While I consider myself lucky, because I haven’t always had such a great place and may devs don’t, the fact is that there are many talented engineers who do in fact care about more than salary, but who they still could not hire without flexibility in the salary model. I understand if they don’t want to because it just wouldn’t work with the model, I just don’t feel that it’s the best decision for the business to be strict on the salary formula. While at the same time I realize that not being strict on the formula + having transparency creates an environment where people are concerned about salary fairness.

        I don’t have an opinion either way yet and I’m very curious as to how this could be resolved. It’s just something I think is worth considering. I don’t think it’s good for a company to limit their hiring options like that. There may be a solution though that still allows flexibility and transparency.

        • carokopp

          Really cool discussion here, Justin! Thanks so much for sharing your thoughts here. I’d say generally you’re exactly right; we haven’t had the situation yet of needing to convince people to come on board and thus haven’t had to deal with this situation. So far we’ve been lucky to have interviews and conversations with folks who want to work at Buffer and the salary conversation is more about making sure that they are taken care of and happy and less about convincing them to leave. I think you’re right, it’ll be interesting to see how this develops as we grow! :)

          • Justin Warkentin

            When you guys do run into the situation I think it’d be really interesting to see another blog post talking about how you handle it. Right now there is a huge amount of demand for good programmers and a relatively limited supply, which is why there is so much poaching going on in the industry now.

            Essentially you limit your hires to people that are: 1) Unemployed, 2) Under paid, or 3) Frustrated with their current employment. From that group you then still have to find people who have the necessary qualifications. You could easily pick up people fresh out of college, but not likely well experienced and talented individuals who have been in the industry a while (unless somehow they meet one of the above three conditions).

          • Jeff

            As long as they’re willing to hire someone as a “master lead engineer” they may be OK. Thought I feel like multipliers higher than 1.3X, 1.07X and $4K/$m rev. might be necessary…

  • Electra

    Brilliant on salary transparency. Everyone always more or less knows the numbers anyway – what they don’t know is the formula, and why some people get more, etc. This may be a reach, but it reminds me of a nascent trend in restaurants not to allow tipping – which improves the quality of the food and service, and increases profitability. The connection is no secret special treatment.

  • http://www.xrks.com/ intangible

    As someone said on Hacker News, the military makes each person’s salary information public and it seems to work just fine there :-D

    The thing I like most about transparency in pay is that you won’t get people getting paid much less than they’re worth just because they weren’t arrogant or pushy enough in their interviews. I know plenty of great engineers who get underpaid because they are introverts and unfortunately don’t know any better while their co-workers who are measurably worse, but better at the interview process get paid 30% more sometimes.
    The salary disparity eventually comes out anyway, and then the person who is getting screwed gets demotivated and usually leaves.

    • LeoWid

      Great comment, completely agree!

    • Jeff

      A thousand times yes intangible

  • Timo Reitnauer

    Thanks so much for posting this! 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.

    • LeoWid

      Hi Timo, great stuff, this sounds like an awesome idea too! Keep me posted on how it goes! :)

    • carokopp

      Wow! That’s incredible, I would love to hear more about that! Would you be open to writing a blog post about it and sharing? :)

  • http://www.philliphaydon.com Phillip Haydon

    I still don’t understand why CEOs get paid so much when its the people on the floor who do all the work. Location thing seems unfair.

    • http://lukemcg.com/ Luke McGrath

      It’s Joel’s work that secures the salaries for everyone else (a simplification of course, but someone needed to create Buffer to create the jobs). He also has the headache of providing a livelihood for those people and the worry that they rely on him to support their families.

      I think location ranges are often used in salaries, but not split down like this. For example, you’d expect a much higher wage in London than Newcastle for the same job because it costs so much more to live their. It’s just not split from the salary in this way.

    • Jessica Darko

      It’s just wrong to claim that CEOs don’t do any work. CEOs generally should be taking home more money over the long run, but due to their superior ownership of the company stock, especially if they are founders, not due to higher salary. Buffer’s probably relatively good in this regard, but still the disparity they have is pretty evident, and I bet the disparity in equity is even more dramatic.

    • Jeff

      Woah, in a 17 person company that was a 9 person company earlier this year, it’s kind of a slap in the face to claim the C-level founders don’t to any work. Not cool man, not cool.

      • http://www.philliphaydon.com Phillip Haydon

        I did not say at all, that CEOs do not do any work at all. I said the people on the floor do all the work. By that I mean I don’t understand why the people who create the product, work with the customers/clients, and are the people who are building the experience, etc, get paid LESS than the person (people) who owns the company, on a month to month basis, when they get a big fat bonus from their percentage at the end of the year.

        CEOs do a lot of work, I don’t believe their value is more than the people on the floor.

        That is my point. And its my Opinion. Right or wrong, I’m entitled to an opinion.

        • http://modeista.com/ Martin Wawrusch

          First of all, most startups don’t pay any dividends, so no fat bonuses from equity at the end of the year. Secondly, running a startup is incredibly hard and strains you in so many different ways, much more than performing job functions within it.

          The chances for an equity pay off are slim, and even if you are good you are very much dependent on timing. Even a miss by a single week can make the difference being wealthy or being poor, for something that you probably worked for years.

          And to address your point regarding value: Please just take a look at John Sculley’s Apple vs Steve Jobs, or more recently at RIM. If CEOs are able to destroy value to the point where all their employees might lose their jobs they surely can benefit a company the other way round? That’s something that needs to be compensated.

        • Jeff

          “when the people on the floor do all the work” — That seems to suggest you think the people on the floor do ALL of the work, and therefore the C-levels do NONE. Perhaps you were just being hyperbolic.

          I agree that many CEOs are paid far more than the value they generate. In a 9 – 17 person company, however, that is typically not the case. They typically are actually responsible for generating more value than most of the other people in the company. Also, in aggregate, the people “doing all the work” are making more than the C-levels. For example, here the C-levels total 450K, and everyone else totals more than 2X that.

  • nXqd

    Good post again, Buffer :)
    Do you have any employees from HaNoi ?

    • LeoWid

      Hi there! We currently don’t actually. But very open to getting people on board from there! :) ( http://jobs.bufferapp.com )

  • http://www.startupmanagement.org/ William Mougayar

    Joel & Team- You are showing an incredible amount of maturity to reveal the salaries and performance formulas behind them. Kudos many times over. You are setting a great example for a really well managed startup.

    • Barce

      Yes, I agree with William here. This a very evolved way of dealing with business. You are not your salary, and making salaries at a start up like Buffer public prevents any corruption common at other start ups from happening. I am a happy BufferApp customer. :)

  • http://ThatGuyKC.com/ ThatGuyKC

    Wow! That is awesome. Love the simplicity and transparency. Many companies would do well to follow your example. Keep it real, drive culture on purpose, enjoy your work, love your team.

    You’d think it’d be common sense, no? :)

    • carokopp

      Thank you so much, KC! :D

  • Tom Yu

    This is cool! I’m a believer of transparency but I never thought of a good way to apply that to salaries. I definitely think this is a step from how it currently is, not knowing what anyone is paid.

    There’s also the game of politics that is played at some companies, when a person threatens to leave and the company raises their salary 20k. That can then damage the company by creating a culture of people who feel entitled and still don’t have their hearts in doing what’s best for the company.

    Under this system, if someone is unsatisfied, they can have discussions as to where the unfairness is. Maybe someone believes they are intermediate instead of junior. Maybe they believe that the base salary of designers should be larger.

    • http://www.philliphaydon.com Phillip Haydon

      How does one really evaluate ‘Junior’ or ‘Intermediate’ and ‘Senior’ in terms of programming? You cannot base it on experience, tests, or anything really. I’ve met people who had 10-15 years experience more than me who are TERRIBLE programmers, but get paid more and are ‘senior’ and I’ve met people who have less experience than me who run circles around me…

      Not to mention someone can be really good at one aspect of programming while not so good at others, and vice versa..

      • carokopp

        Great point, Phillip! This is definitely subjective, you are right. This will be a good challenge as we scale. At the moment, it’s quite easy to see that everyone is doing really good work (and a lot of it, at that). If we ran into the situation where that person with 10-15 years of experience wasn’t actually doing good work, it would be hard to hide that for long. Definitely a fun one to explore!

      • Jessica Darko

        A lot of people who are younger do not know how to value experience, so your assertion that this person with 10+years more experience was “terrible” is a clue that you might not actually be good, or be capable of valuing the value of their experience.

        For some people, especially younger ones, writing 100 lines of really crappy, code in a day is “great” while doing nothing for a week and writing zero lines of code in that week is “terrible”– even though in the latter case, over the course of several months, far more features will be produced and the amount of time spend debugging them will be 1/100th, and the result will be higher quality.

        I’m actually agreeing with you- the problem is that so many people don’t know how to evaluate other people. kids don’t know to value experience, crappy programmers don’t realize they are crpapy and think they are good because they spew a lot of lines of code, etc.

        • http://www.philliphaydon.com Phillip Haydon

          I will give an example. Back when I lived in Australia, I was a ‘junior’ with 4 years experience, I had a Senior Lead Developer with 15 years experience, ask me. “How do I create an instance of an interface”. He had “5 years experience” in .NET, I had 4… He had been a programmer for 15 years. Knowing he got paid 60k more than me was demoralizing for me…. He was also really slow to do anything… He wrote a parser that took 15 minutes to parse a 7mb file and bought our system to its knees. I got it down to 1 minute after he complained no one would make it faster. Another dev who had 20 years experience got it down to almost instant.

          Most of the people I’ve met with more experience than me have been great mentors who I have learnt a lot from. I just think its hard to really gauge who is experienced and who is… lying…

      • Tom Yu

        I’m not disputing that there are flaws. But I do think it’s a step up from our current black box approach to salaries which has the exact same issues that you raise.

        Having a transparent salary system allows for discussions like this to occur. Do you believe under the current black box approach, that everyone is paid more fairly?

  • iseekthee

    Well i am glad this din’t happen! http://youtu.be/meiU6TxysCg?t=1m18s

  • chx

    This is plain nuts. People are not cut from the same cloth. Take the release manager I have the insane luck to work with: 25 years of software developer experience. Started in military so his discipline is deeply ingrained. Compared to a junior developer, if I get the maths right he is earning 40% more? And you’d pay the same to someone with 5-7 years of experience who is pretty OK at being a release manager?

    • Jessica Darko

      The problem is, all these startups are mostly run by kids in their 20s. They don’t know how to value experience because they themselves are not experienced. It’s hard to interview people and know if they are good or not (Well, it’s easy for me, but I’m exceptional. I am not being arrogant, it’s something it’s taken me a long time to admit.)

      So they use title as a proxy for value, because they cannot objectively evaluate actual merit.

  • http://kivikakk.ee/ Amelia Cuss

    I know it’s just Estonia, but it’s spelled “Tallinn”, by the way.

  • Tony Wayne

    Wow, brave move!

    Do you offer performance bonus or equity?

    What happens when you have to hire a junior resource that will be paid more than senior resources because base salary levels sometimes grow faster than increments?

    • carokopp

      Hi Tony! Great to hear from you. We don’t have performance bonuses at this time but some of the roles have incentive built in, with the $x per million in revenue.

      Do you mind clarifying a bit on the second question? If the base salary grows, it grows for all people in that role, even if they were brought on in a lower number. Am I answering the right question there? :)

  • AzzamS

    I think your overpaid :P

  • betonel

    There is a reason for hidden compensation. Google capuchin monkeys compensation and see how such openness can affect the group. Did you consider that maybe not all the team was 100% for public salaries, but they felt constrained to follow the majority just to avoid being “that guy” /outlier. How did you gather your team’s feedback, did you do a secret poll, or it was a plain old all hands on deck meeting ? I am not against it, but it’s hard to be impartial and and have a balanced growth of the company. Regards

  • Michele Forbicioni

    I think it is a good exercise but it does not save you (CEO, COO ….) to assume your responsibility. Further i think the transparency, or the empowering of it, could end in a “promoveatur ut amoveatur”. The big quantity of data transferred within the peer groups or outside, could become a “no data” at all.
    But this is a nice way to promote your brand! :-)

  • http://www.wanderandtrade.com/ Brandon Burns

    I want to do this.

  • Joe Burti

    just wonder why so few employees choose equity… even some from exec team. Aren’t you folks believing in what you’re doing?

    • Alec Matias

      It takes a LinkedIn-like IPO or Instagram-like acquisition to make the 0.2 to 0.5% of equity to be truly valuable. Let’s say Twitter buys Buffer for $50m. That’s phenomenal, right? Well, my 0.3% share as an early engineer would only net me $150k. Sure, it’s nice a chunk of change, but it isn’t never-work-a-day-in-my-life-again money.

      I’m positive Buffer’s employees believe in what they’re doing as company, but they’re not disillusioned into believing this will be the last job they’ll ever work. It will be around for a long time and be stable enough to operate, but it’s unlikely to have that Facebook-type exit so it’s far smarter and safer to take the cash.

  • eagspoo

    This is mad genius badassery at it’s crazy best.

  • http://artisanalbytes.com/ Jeff Kolesky

    Joel, I think this is truly awesome. I remember reading about open salaries in one of the Jim Collins’ or Paul Hawkins’ books years ago, but I haven’t been able to find the reference each time I’ve tried. I’m really glad you are bold enough to attempt this publicly, and I look forward to the lessons that come from it. Do you think you will try something similar with equity?

  • http://www.webmagazin.co/ Rıza Selçuk Saydam

    i love this company.

  • SQDB

    I think Stalin would have loved this.

  • David Lilienfeld

    Perhaps it’s just me, but in an enterprise in which value is being created by your “heros”, why is the CEO the one earning the most money?

    • http://www.financialsamurai.com/ Sam Dogen

      Pride is very important if we are to be open.

      In finance, we paid our producers (sales people) who generated the most business the most. More than the managers. But finance is a different world.

  • http://workado.com/ Justin McGill @ Workado

    What a fascinating read. Lots of engaging discussion in the comments as well. I found the formula the most interesting aspect and am curious how the experience (junior to master) is determined? Especially considering no one in the company is yet at “Master” status.

  • Jessica Darko

    Your location deal is kinda messed up. Santiago should be somewhere between A and B categories, as it is expensive to live there (especially food.)

    Also, it seems interesting that you incentivize people to live in urban hell holes to such an extent.

    Your executive staffing seems a bit out of line, given that they presumably have so much stock you also compensate them for revenue? It seems if you give a bonus of 12k per $1M in revenue, then it would be a good idea to give that to every person in the company…. thus everyone is incentivized to increase revenue.

  • Jeff

    First off, thanks for this. It’s really unfortunate how Salary is such a taboo topic in our society and efforts like these help make progress in the right direction. Salary should be a function of performance and contribution to the company, with a slight nod toward seniority. With the exception of maybe salespeople, negotiation shouldn’t be necessary to be compensated appropriately. It should just be formulaic.

    You really only pay 22K more in San Francisco than in Delhi? This Delhi: http://en.wikipedia.org/wiki/Delhi ? I know a few stud engineers in India who make $35K US and live like kings because of it. Meanwhile, to live in the valley and own a decent starter house you need $150K in salary. The location based adjustment doesn’t seem appropriate to me.

    I love that you’re love tying salary to revenue. I hope you keep publishing this because it will be interesting to watch the dance you need to do to keep this incentive program in place as you grow. I would caution tying things to revenue too much though. Otherwise, like wallstreet, you are incentivising short-term revenue over long-term success of the company.

    I’d love to see the equity numbers, but perhaps your investors are frowning on that idea? It’s hard to judge this compensation scheme without understanding equity.

    No bonuses?

    • Jeff

      Also, keep up the good work in general. I am not currently a user, just don’t need this service right now, but every time I hear your company mentioned I think to myself: “Wow, Buffer is really doing everything right.” Bravo!

  • rahuldewan

    At Srijan (www.srijan.net) we’ve been an “open salaries” workplace for several years. We maintain a Google spreadsheet sharing salaries of our largest office in Delhi. All our project revenues, earnings, are all known to employees — made public periodically. We got covered in the Economist for this: http://www.srijan.net/blog/srijan-covered-economist/

    You guys have ofcourse taken this to the next level of transparency. #awesomeness. But not something we’ll follow at Srijan — atleast for a couple of years ahead.

  • kanishka azimi

    worker coops are a much more direct way of solving the trust problems you are indirectly trying to address

  • rohitmanohar

    What is the role of a “happiness hero” ?

  • Michael Allen Sivill

    The experience titles Master, Advanced, Intermediate, and Junior seem subjective to me. Are these experience levels defined by the company? If so, do the levels describe a person’s experience when they came into the company, or do they describe the experience gained from working for Buffer?

  • Slash

    hey! why Niel earn less than Matt?

  • Alex Meyer

    do y’all have offices? who cleans them? are they also paid equitable wages if they are not listed here?

  • Anonymous

    You are awesome.

  • http://www.financialsamurai.com/ Sam Dogen

    Fascinating! No wonder why startups raise so much money. They need to pay their people!

    I’ve wondered for the longest time why startups just don’t continue going since it costs nothing once the tech is built and the domain is registered. But with server and salary costs this high, it’s impossible!

    Guess we have to convince more people to work for equity.

    Financial Samurai

  • http://www.financialsamurai.com/ Sam Dogen

    Hi Guys,

    One follow up, can you do another post listing equity transparency per employee too? It would seem in startup land, the equity component would be a big portion of total compensation.

    Thanks!

    Sam

    • LeoWid

      Hey Sam, great point, we definitely plan on making equity transparent too!

      • http://www.financialsamurai.com/ Sam Dogen

        Thanks Leo! Perhaps I should wait for this component before writing a blog post on FinancialSamurai.com on this most fascinating topic!

        If you can spend all your revenue by paying yourself the max every month and hold off long enough to get bought, then it’s a huge win! Goes counter to my article I wrote called, “The Startup Riches Myth: Sell Your Company For Millions And Still Not Be A Millionaire!” Check it out if you have time. I love stories that debunk my views.

      • Jeff

        +1 on equity… it’s hard to get a clear picture without that information

  • Steven

    How does the experience multiplier work? Does it equate to years at the company, or something else?

  • Christopher Pernishek

    Will your multipliers change as your tenure in your role (seniority), your experience and if your geographic locations change? Will you release updates as your team receives increases with explanation?

  • Ryan Johnson

    Brilliant!

  • http://WWW.FAKEGRIMLOCK.COM FAKE GRIMLOCK

    OPEN SALARIES? ME, GRIMLOCK, APPROVE.

    • LeoWid

      the ultimate approval, really glad to hear it! :)

      • http://WWW.FAKEGRIMLOCK.COM FAKE GRIMLOCK

        YOU WELCOME. OR ELSE!

  • Dino

    Buffer is a small company with a small revenue and a small staff. Think of a company with 1,000 or 10,000 employees. Buffer’s idea of publishing its employees’ salaries is clever. They have nothing to lose. It has never been done before. It is a publicity gimmick! The consequences of such action are too counterproductive for companies like Microsoft, Apple, GE, Ford and Boeing are too many to list.

  • http://SportsGeek.com.au Sean Callanan

    That is a terrific initiative, we discussed salaries on Beers, Blokes & Business podcast on staff motivation. I think this post will form a deeper discussion on how to set salaries, thanks. Episode available here – http://beersblokesbusiness.com/13

  • Matthew_Reilly

    What is the value in open salaries? I don’t immediately see the point. Publishing salary bands would prove more helpful. In my experience, public info like this breeds jealously. Also, what happens to negotiations? Do you just lose interest in a candidate who asks for more?

  • Lisa Russell

    Very cool, also I love the term Happiness Hero, that’s awesome.

  • Abdullah Saqib

    The concept is appreciable but there is a thing called privacy that must always be upheld. Revealing salary structure is a good move towards transparency and open-ness by Buffer but employee credentials should not have been exposed.

    • Jeff

      They discussed it internally.

  • LarrySiegel

    This is crazy. Now I know the names and employer of a bunch of apparently talented people who are being seriously underpaid. If I were a headhunter you would have made my day…. or maybe you would have given me two years’ income without much effort. Fortunately for Buffer, but unfortunately for the employees, I am not a headhunter and am not hiring.

    • Alec Matias

      How underpaid do you think they are? Why are you so confident that offering them a 20% increase in salary would make them leave Buffer? Salary is not the only measure people use to determine where to spend the majority of their waking lives.

      • http://modeista.com/ Martin Wawrusch

        It’s not the only one, but it is one of those things that start nagging on people, especially if there are girlfriends/boyfriends or parents involved who constantly rub it in. People (and apes actually) have a subconscious sense of fairness, and if they feel to be treated unfairly they will take action.

        Anyway, this whole discussion is moot anyways without knowing the equity structure behind it.

      • LarrySiegel

        I think the top 10 or 15 people could be making $150,000-$200,000 in SF. That’s more than a 20% increase. It makes the difference between being able to start a family and buy a house, and not being able to. Money isn’t everything if you have it; if you’re running out of money before every paycheck, and living off of credit cards, it is. Maybe you think only under-$50K earners do that, but it’s different in San Francisco.

        • http://joel.is/ Joel Gascoigne

          I think you make a great point, perhaps our “location” aspect of the formula is not quite right at the moment and should be much higher for SF and other similarly expensive or high demand areas.

          It’s probably worth noting that only 5 of the 15 listed are located in SF and 4 of those are c-suite team members. Perhaps I’m not being rational but I don’t have any worries about these people leaving. The other key part of this is equity, which we will share in the coming months.

  • Patrick BERNARD

    Bravo! Hiring in France by any chance?

  • Tony Milano

    My question is how do I get started on one of those career paths? I know nothing about coding.

  • Özmen

    I think there is no better way to feel as “paid fairly” than this transparency method. For most of companies, salary information is transferred as gossip between people. Employers must decide “salary fairness” upon this fuzzy environment.
    This decision made me think that the employers have self confidence about what they are doing and how much they make for this effort.

    I hope the company can continue this method.

  • Kenan Kenny Wang

    Great push of a best practice (transparent compensation policy). And the formula seems reasonable to me (as some have pointed out here, maybe lower than the silicon valley competition, but reasonable for people who are driven to work on something they enjoy). I’ve never seen a company publish with the names so I look forward to seeing how that plays out.

  • mareensawyer

    This is just awesome state of mind…I’ll try to do something like that in my buisness. Thx for your everyday inspiration Buffer !

  • DoubleHelix

    Isn’t that a fresh idea. At my fortune 30 company, salary scale information is a highly guarded secret, like Area 51 secret. Then again income inequality among peers is rampant and unjustified also. I like this, a simple formula, peers make equal pay short some minor calculations. Pay equality is a big deal for me. I work in the private corporate sector, but I come from a long line of blue collar union employees where equality tended to be more common.

  • Chris Raastad

    Very interesting post! FYI “Talinn” should be spelled “Tallinn”. The lovely capital of Estonia.

  • JoshoMosh

    Headhunters are coming!

  • K_Balaji

    Do you mean candidates with experience and grade similar to any employee would be offered the same pay? If yes, would like to how to handle such negotiations?

  • Emerald

    how did you came up with zero ? on location, isn’t it unfair for engineers from manila like me? we do love to eat pizza too…

    • Jeff

      What is market salary in Manila? Is it $70K for a first year new-hire developer out of school? My Googling suggests it’s less than $10K. Market rate is what matters.

  • Warsaw’s Secret Fitness Studio

    Wow! I love this idea! It’s always been my contention that hiding salaries is a way to allow politics to rule and outshine a person’s contribution and work ethic. I also admire your company for largely factoring seniority into the salary calculation. Many companies today factor seniority as an expense that should be eliminated because senior employees have built up salaries, benefits and vacation. Kudos to you! Salary transparency will be my model whenever my company is big enough to have employees!

  • http://www.financialsamurai.com/ Sam Dogen

    Hi Joe & Team,

    I couldn’t help myself and wrote this post entitled, “Startups Can And Will Make You Rich: Meet Buffer.” Well done and perhaps we can grab some grub one day as I’m in SF as well.

    http://untemplater.com/business/startups-can-will-make-rich-meet-buffer/

    Cheers,

    Sam

  • http://michaelpeters.org/ Michael Peters

    Joel,

    I noticed that you do not have a Chief Security & Privacy Officer. That is an increasingly risky proposition and I have a solution for you. More to follow!

    • Jeff

      17 person non-HIPPA, non-PCI complaint companies don’t need a person whose fundamental role is to just be paranoid all day. That can be crowd sourced to all employees for now.

      • Michael Peters

        Crowdsourcing security to all employees is the equivalent of
        delegating police work to George Zimmerman.

        While I agree that the risk is lower given the business model
        and data types at risk, I completely disagree with trivializing security. A company’s reputation is important and that is where investors and customers will make or break you in the court of public opinion. The reason the world has a job function for security is that it recognized ages ago security is a niche profession and cannot intelligently be delegated to every employee or every citizen effectively.

        My suggestion would be to put on retainer (or hire) a
        security professional who would guide the burgeoning company in security, privacy and cyberspace law setting them up for success. I’ve been that “paranoid” security professional for more than 20 years and funny thing is, I’ve never felt paranoid watching your back or any others before.

        Best regards,

        Michael D. Peters
        eJD, MBA, C|CISO, CISSP, CRISC, CMBA, CISM, CCE, ISSA Hall of Fame
        CEO-Chief Security & Privacy Officer
        Lazarus Alliance

        • Jeff

          As amusing as it is, the Zimmerman analogy is inaccurate and ridiculous. For one thing, it’s far easier for a neighborhood watchperson (which, by the way, is not a useless person so it’s unfortunate that you chose to trivialize them) who is packing heat to screw the situation up worse than if they weren’t there at all; whereas, someone who is trying to be security conscience rarely makes the situation worse than if they just didn’t consider security at all. Second, the average senior developer is far more capable of designing secure solutions than Mr Zimmerman. Let’s cut the misdirection via appeal to emotion and just talk about the facts.

          Now, I’m not trivializing security. I didn’t say they didn’t need it; I didn’t say they would never need a security professional. I also value having someone who is always thinking about security, AKA spending all day being paranoid. I just don’t think they currently have as much need for that role as you. I said they didn’t need a DEDICATED resource at this point. If they continue to hockey-stick then soon they will.

          Let’s look at a few examples.

          LinkedIn holds data far, far more sensitive than Buffer. They were a publicly traded company with a $10B market cap and no excuse for having poor security when they had a huge breach that was exacerbated by the fact that they were using SHA for encryption and not salting their passwords. This foolish negligence was horribly bad, about as bad as it gets for a SASS company getting their core product compromised. Did this ruin the company? Did this cost them billions, or even millions? It wasn’t even a blip on the radar.

          Citigroup was the “victim” of a “hacker” a few years ago who gained access to the bank accounts of thousands of their customers by INCREMENTING THE ACCOUNT NUMBER IN THE URL of their online banking solution. Surely a flaw this large and this simple must have been caused heads to role and the bank must have suffered because of it. Nope.

          To be clear, in both of these cases I would love to have seen customers and investors inflict some real pain on these companies and set a precedent that security should be taken seriously. But, the fact of the matter is, they don’t. Unless you show a habitual disregard for security, you are not significantly hurt by the market for having breaches like this. As long as you do things right in the immediate days and weeks afterward to “show that you take security seriously” then the market forgives you. I’m happy to defer to “security experts” in my company, and of course companies of a certain size or in certain specialties should hire dedicated security professionals. But for 17 person company, they certainly can’t hire a full-time professional for this purpose.

          MY suggestion would be to cultivate a security conscience culture amongst the employees at Buffer, and pay a one-time cost to hire someone to do a security audit on the most sensitive parts of their products to make sure they are up to snuff. Adding another 100 – 200K per year expense that does not endear your product(s) to your market is not a good expense at this size. It soon will be, but right now they are still a fledgeling company, and full-time security experts is an expense that they do not YET need to add.

          Jeff Jason
          IDNATFS

          (I Don’t Need Acronyms To Feel Special)

  • its2012getoverit

    What is a “Happiness Hero”?? I would LOVE that job title!

  • Jack Furr

    It would appear that negotiating a salary at a new company would have it’s challenges if everyone knew how much you make. Also, the salaries seem a little low compared to the engineers (backend & Android) that I know in the SF bay area.

  • ytiffa

    Seems like a great place to work! Proud to be a buffer user. Love the transparency.

  • Brady Williams

    Now I’d love to see your investment breakdown–especially how much each employee is getting–but also a breakdown of who has equity stakes.

  • screwyouregistration

    Good luck retaining talent at these salaries. This is very below current San Francisco market.

    • Jeff

      We have no idea what the equity-based compensation is. Maybe they put aside a 30% option pool for this round and these 15 non-co-founders collectively own 30% of the company.

      • screwyouregistration

        Even then, only if it is a damn good idea … otherwise it’s a big risk.

        Most startups flat out fail.

        • Jeff

          Its a standard value calculation. What most people don’t factor in is the opportunity cost of not working for a startup. I work for a publicly traded company of which I’ve never owned more than .004%. By choosing to be where I am I’ve given up huge potential upside in favor of a higher percentage change of small upside. But, in aggregate, our system generally rewards risky behavior more than conservative behavior. Also, Buffer is way beyond the point where most startups are in terms of those bleak statistics. Id say they have a greater than 50% chance of a positive liquidation event.

  • http://www.bradezone.com/ Brade

    All this transparency from a company whose sole product makes it seem like you posted/tweeted at a moment when you really didn’t!

    No big conclusions to draw from this. Just seems ironic and wacky.

  • MF Jones

    If the salaries are open, then why I don’t see how stock is distributed across levels? I believe stock is the main reason people join startups and the salary is just to cover basic costs of living in SFO(which is ridiculously expensive and +22K does not cover that by no means)

  • p0zart

    No matter if it’s a good job or not, your making a difference and that’s creating a lovely company. I was already in touch with your happiness staff and they were successful in creating a great impression of your company for me. wish you bests.

  • Alain Mevellec

    It’s liberating but it’s also stupid: how come you will manage that on the long run… If you happen to have 500+ employees, that won’t work, Thai retreats won’t either…

    I love your software and at Sellsy I think we have the same kind of approach toward using users input to get the software better. We’re also pretty comfortable on sharing our metrics, as you do. So I’m a supporter mostly, not a troll.

    But seriously, the magic salaries formula grid, come on…

  • http://www.davidbcrowley.com/ David Crowley

    Very interesting, and strong show of commitment to transparency! I wonder if more companies pursued such transparency if that might contribute to closing the gender wage gap. i.e. it seems more likely that equal pay for equal work is going to happen under such a system.

  • http://www.newtohr.com/ Nicole Dominique Le Maire

    As a HR professionals who has worked in a number of different markets (including emerging markets whereby everyone knows ones package by way of gossip) this may be a way forward for organisations to align compensations and benefits strategies. My only concern would be that if your image//brand is not that strong and you do not have lots of talent streaming to you – salary likely will need to be a bit higher…

  • tallinn

    tallinn

  • Samer Faour

    This is awesome.
    I was actually thinking about doing this myself, looks like you guys beat me to it.
    :)

    How about for contractors, i.e. hourly rates vs salary?

    My thinking is probably every 1k annual translates to about $1/hr as this is roughly how I’ve seen the comparisons in the industry now.
    Salaried employees get a lot of benefits in terms of health and other insurance, perks, shares/stocks in the company, etc. whereas contractors would not and would have to get them on their own. At least that’s how most companies operate now

    So someone who makes $80k would make $80/hour if he was on contract.

    Just my 2 cents

  • icywolfy2

    I think this is a great idea.
    We implemented it at a job I worked at
    back in So Cal, and it did have a great leveling effect, and improve
    overall productivity and contentment at work.

    In short, the moment it went into effect:
    People
    who were known (to other developers) slackers, who were paid much
    higher than the mid-range, got quickly let-go, or had their salary
    reduced as their slacking was now immediately pointed out, and people no
    longer covered for them being slow/inefficient.

    People who were valuable and productive, but paid under-band quickly asked for (and received) raises to bring them into band.

    After
    about a month, the pay discrepancies within the engg band, and the s.
    engg band went from 40-50k to ~5k. People left, salaries were adjusted,
    but after that initial turmoil, the company quality of life and
    satisfaction of employees went up signficantly. Even to the point were
    others were wondering why XXX didn’t get a raise, as they deserved it.
    Merit raises were being asked for by other co-workers.

    Until
    that point, I was actually wanting to quit, but once the entire
    workspace got shaken up by the salaries becoming public — I ended up
    staying there until I moved to the SF Bay Area two years later.

  • RCPC

    This is so cool. I like the transparency. I wish other companies would take after this thought, although not likely. I do have one question though, based on the person’s location, why do you pay them more or less based on that? meaning, why if you live in NYC or San Francisco do you get an additional $22k versus somewhere like Nashville or Birmingham, they only get an additional $12k?

  • http://www.organiclifeproducts.com/ Montina Portis

    Wow, just wow! I’m retiring this year from my company yet this is a fantastic concept and I would have loved to have worked for a company so innovative. Fantastic job Buffer (and Mary IS a happiness hero!)

  • http://hillaryfox.com/ Hillary Fox

    Refreshing transparency. I am in love with Buffer’s culture! :)

  • Mark

    @LeoWid:disqus Thanks for this post; it’s great insight into thinking outside the box. A quick question: if someone opts for more salary, they get +$10K; but if they opt for more equity, what does that look like?

  • http://ow.ly/mOWb0 dweiums

    I’ve worked for several startups in the past and this is the absolute coolest salary setup. Loving the transparency. More mature companies could learn a bit from you.

  • Brian Douglas

    I would like to become a happiness hero! Please accept this as my application. My resume can be found at briandouglas.me. I look forward to hearing from you.

  • http://www.jchen.me/ Jimmy Chen

    Hasn’t this been tried in the Valley before? In fact, didn’t no less than Steve Jobs try that at Next and showed that it’s a massive failure?

  • Shane Paul Neil

    This all sounds awesome. What if my skill sets fit two positions? Should I apply to both?

  • Thomas White

    Taking transparency to a new level. This is a model that every business should consider. It takes all the backtalk off the table and let’s the team focus on doing their best.

  • Christian Rivera

    I was nervous about asking my Art Director what he makes. I wanted to know so I can get a better idea of where I should be. I eventually asked because he was resigning but the fact that I felt it was rude to ask felt a little silly. I like this transparency in salary because it helps guides the industry as a whole for businesses and employees looking for work.

    The Art Director has told me that my skill level and experience should be earning me a whole lot more, especially as a freelance designer (currently $25/hr), but my lack of salary knowledge+humble beginnings has left me asking for far less since I felt I was asking of too much. I have other clients who paying me more which could be my leverage in negotiations along with improved work, etc.

    Anyway, the point is that seeing these salaries has given me some confidence in asking for a rate increase. I love that location is considered in your formula as I’m working out of San Diego (the company I freelance for is based out of Santa Monica) which is generally on the higher end of cost of living. I’m originally from Philly, which may have skewed my original asking price since it’s cheaper to live there.

    Having a set formula with some options sounds incredibly fair mixed with what seems like a great positive company culture. As long as everyone is happy, confident, producing and able to provide for their families you can’t really ask for much more. “Am I being paid fairly?” isn’t something I want to think about. This formula and fairly paying your employees keeps the focus forward. Love your company and keep up the great work.

    Portfolio at http://www.rivaldesign.me if anyone is interested in having a look. Always willing to talk more about freelancing, gaming, Design and such over at rivaldesign.wordpress.com.

  • http://bebrainfit.com/ Deane Alban

    Love it! I first heard about financial transparency in the Conversation with God books.

  • Ryan Mendenhall

    Wow. Great thought process. Thanks for sharing the value of being transparent.

  • M. Philip Oliver

    While I’m delighted to see the “Openness” regarding “Salary”, my own insignificant observation having tried buffer, both for free and as paid in advance has been; lack of client service regarding training on (your system) optimization techniques. I.E, I was paying, but i’m not convinced I knew/know for sure “why”?! Placing something/someone as Key link in this potential incentive to re-sign for another months service, would i believe be beneficial to both client and buffer. Hope you appreciate candidness, otherwise you probably hate me, and will not be toasting to me this friday P.M., as your S.F. bar-hopping begins. Ha ha ha..

  • Mathieu Roy

    Awesome! I highly value transparency!

  • Mahdi Sadeghi

    I don’t understand the habit of keeping salary rates as a secret. If in a healthy system somebody gets paid more, there is a reason behind it and making salary formula public helps people to understand it.

    This transparency helps me to respect the values in my work and others.

  • Bobby Joe Houston

    Is this a joke? Senior Backend Engineer for $104,800??? The must give really nice stock options packages. BTW, where is this information? Does not seem to be published.

  • Tarin Crowell-Mackie

    I really enjoy the trust that you all have with each other, and the fact that you add things in such as equity and you take into consideration seniority and experience. That is a huge deal, and a lot of people do not do that. And that you do a BootCamp is rather extraordinary. What is the boot camp like?

  • http://shelleyhood.com/ Shelley Hood

    Many government agencies publish salaries online for all taxpayers to see. I don’t think this is extreme but it does make a lot of sense. It allows people to focus on work and where they want to go – less on internal politics.

  • http://marciotoledo.com/ Marcio Toledo

    Amazing formula, amazing company.

  • http://www.calebstorkey.com/ Caleb Storkey

    Love this…. Transparency is such a wonderful and courageous gift to give to people. Thank you!

  • http://www.power2improve.com GustaafVocking

    It’s encouraging to see how you build a business. I applaud your product, service and transparency. And seeing the disbelieve and disagreement, from what I think are old school entrepreneurs and managers, broadens my smile somewhat more. The formula of course is not perfect, but the success will undoubtedly be that you align everybody’s needs, wants and ideas, effectively getting the money out of the way of people creating awesome. It’s good to finally have a good real life example for the MBA students I teach.

  • Damir Wallener

    I have been in tech a long time and have seen/experienced just about every possible approach to HR. This is easily the most comprehensive approach to transparency I have ever seen – I am impressed.

  • http://www.semihealthyblog.com/ Amanda @ Semi-Health Nut

    This all seems too good to be true!

    • http://www.semihealthyblog.com/ Amanda @ Semi-Health Nut

      I almost regret that short and simple comment looking at the rest of the thread…but it’s true! I think a company being open about salary is so beneficial to employees. I hate the idea of having to hide how much you make with coworkers who do the same job so this completely solves that problem!

  • Marianne Pendleton

    Wow – great thinking! And really refreshing salaries!

  • http://gatesvp.blogspot.com Gaëtan Voyer-Perrault

    This decision actually has two different aspects of “open”.

    The first part is “every one knows what everyone else makes”. The second part is “we have a formula for this”.

    I really like the first part. Hiding salaries is not constructive for team building or task assignment. This gives people a goal and it provides a basic structure for who should be handling which complexities.

    However, I really dislike the second part and there are several reasons for this. I will mention one good thing though: providing some type of bonus for increasing profits is a generally good idea.

    – Location benefits are a poor decision. If the Developers in Nashville are equally productive, why not pay them the same? SF/NY may cost more to live in, but they are also relatively lower-risk for developers. There are probably 20 other potential employers in your very building. If you pay the Nashville Developer full SF value, you also lock them out of their local job market and then you don’t have to worry about losing them.
    - Experience and Seniority multipliers are ad-hoc and arbitrary. The key aspect isn’t seniority it is “portion of revenue responsibility”. If you are responsible for several people or responsible for several revenue streams, then your portion of the pie can go up. If you multiply on some random decision of experience & seniority, you’re committing the same sin as big companies by not evaluating on performance & responsibility.

    - Equity / Salary choice is really null. You’re a (basically) profitable company bootstrapped off a small amount of cash ($400k) and it’s not clear how you’re going to cash out that Equity at all. Almost all of your staff has “taken the money”, so that sends a pretty clear signal how they feel about it too.

    – The “cash for revenue” is limiting because is optimizes for the wrong thing. More revenue is generally a “good thing”, but the company really wants profits. Let’s say Sunil does something magic to halve your server costs and save you $100k / year. That’s a good win for profits, but the company doesn’t make any more revenue so his paycheck stays the same.

    – The “cash for revenue” also doesn’t scale with your goal. Your long-term goal is to increase profits per person along with total profites. Why not just make a weighted share by head-count? In fact, this totally clears up the whole Equity/Salary problem. Just move to profit-sharing. I mean that’s what you’re trying to do, you’re just not calling it that.

    – How do you handle periods of slow revenue growth or negative revenue growth? If you start losing accounts or the market becomes more competitive your employees are actually incentivized to leave. What may have been a competitive salary at $4M in revenue may not be competitive at $2M in revenue. If things start sliding how do you prevent an exodus?

    – On the inverse, how do you fight margin shrinkage? What if your next $4M in revenue comes with lower margins? Do you have to scale back the “bonus per million”? How do you deal with being a $40M company with lower margins?

    – You only have a “management” track you don’t have an “expert” track. What if you have 100 people and your top developer is _not_ your CTO? Some people are _really_ good at things that are not “management”. Letting these people progress without becoming managers is important to building a stable organization.

    – How do you recruit top people? Or even just currently employed people? What if somebody read Sunil’s Medium post (https://medium.com/technology-culture-productivity/4540b0cde584), said “I have 3 ways to make that better” and then realized they were already making more than Sunil? Why does the person who can solve your problems want to come work for you?

    - Pay Range. I want to be clear here, $90k+ is a very good salary in most of the world. This is nothing to scoff at. However, in the Bay Area and NYC, Senior Software Engineers (8+ years) are earning much more than that. The posted salaries are going to limit the type of people who can even apply for the job.

    *** To be clear, open salaries is a step in the right direction ***

    But the “salary formula” has the problem of imposing a very specific view of the universe on the question of salary. For some established, well-trodden businesses, this is probably a good thing. And it probably exists in most big companies without necessarily being “open-source”.

    The challenge with Buffer is that it’s _not_ a well-trodden, business and things could change next month. As the good programmers know, it’s not just about the current state of the system, it’s about the way we manage change. That will be the true litmus test of this system.

  • Jevon Millan

    Companies have values that are much higher motivations than money. Like the feeling of a job well done, or appreciation from teammates. This company seems to have those values at its very core. I feel that by posting an open salary, the money motivation aspect of things is nullified and the team can work on a higher level together to push forward their common purpose for the company, without worrying or speculating how they are “valued” monetarily within the company.

    I’ve worked with a group for over ten years now that has an internal transparency on its pay schedule (not open to public like this, but we all know what each other makes, and how bonuses are paid out) and there has never once been any sort of upset or conversation about any of my team mates feeling undervalued or underpaid. In fact, it has enabled us to ignore relative salaries altogether and focus on work and our purpose as a group.

  • Jappreet Sethi

    Great Idea, I just wrote about Buffer on Linkedin , way to go in creating transparent culture.

    http://www.linkedin.com/today/post/article/20140410064343-122640494-why-salaries-should-not-be-a-secret-anymore

  • http://www.marcinkonkel.com/ Marcin Konkel

    This is surely a breakthrough and it’s as transparent as it gets. I think it’s best to ascertain the results of this approach after some time when it settles and becomes something daily. Now, due to all the buzz, everyone’s interested. If employees are content with the move and nobody was forced to anything then it’s a win-win isn’t it ?

  • John

    I think this level of transparency is awesome. In my eyes, this creates an environnement where everyone is on the same page. This will make the team even more tightly knitted. Great stuff!

  • http://jamesryanmoreau.com/ James R Moreau

    Love this idea… came back to it today to really sit and think about it. My only concern is that salary being public knowledge might put a Bufferapp employee at disadvantage if they were interviewing for another job, elsewhere. Then again, that’s not Bufferapp’s problem :)

  • Ekaterina

    I haven’t seen any similar approach at companies I’ve been working with. Really motivating to see the experience, some country factors and culture put in first place. I suppose this kind of approach does not leave a room for jealous and / or unpleasant people. How do you share experience with new hires? How do you improve your team’s skills? Is there any coaching within your company?

  • johndurbinn

    You guys are underpaying the shit out of your engineers. Who in their right mind agrees to 104k in SF as backend engineer?

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  • philhill

    Very interesting. I applaud you.

  • Carlos C

    It is nice, because it shows right off the bat the discrimination against other locations of the company not having a “premium”. Like a C-level in Hanoi earns less than a C-level in San Francisco. Not fair.

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  • Bee Ridge

    I am curious to know how long you have been practicing the pay transparency and how it is working for you and your employees so far.

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  • http://www.philsimon.com/ Phil Simon

    You guys are definitely walking the talk.

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