It is a true story. A few months ago San Francisco-based social media startup Buffer surprised everyone by publishing the salaries of each and every employee.
How do they calculate the value of each employee? See below:
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)
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How do they calculate the value of each employee? See below:
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)