Microsoft Employees Just Saw Exactly What Their Job Is Worth. Your Startup Candidates Have No Idea. Here’s the Fix
The number on your equity offer is doing more recruiting work than ever, yet it’s a part of the offer candidates can’t really read. That’s a problem you should fix before your next hire.
EXPERT OPINION BY DANIEL ROBBINS, CEO AND FOUNDER OF IBH MEDIA AND HOST OF FOUNDER’S STORY
This week, a spreadsheet of Microsoft salaries leaked, showing base pay by level, bonuses, and stock awards. Though Business Insider reports that the data is anonymous, unofficial, self-reported, and not comprehensive, the stock data still makes for a good read. A Microsoft engineer can now look at a level, see the stock grant, and know roughly what it is worth.
Now think about the offer you’re handing candidates
Now think about the offer you’re handing candidates at your startup. You wrote a big equity number on the offer, but the candidate often lacks enough information to value or benchmark it reliably.
“The Microsoft leak didn’t create transparency. It validated compensation data that was already available through platforms like Levels.fyi,” Oren Barzilai told me. Barzilai is the CEO of Equitybee, which recently released a free benchmark for comparing startup equity grants. He said that at private companies, equity compensation remains a black box: “Employees have had no reliable way to understand how their option grants compare with those offered for similar roles.”
That gap is an underrated problem in startup hiring right now, and it’s getting worse.
The daily digest for entrepreneurs and business leaders
An Inc.com Featured Presentation
Equity Takes the Stage.
Start with the market you’re hiring into
Start with the market you’re hiring into. Carta’s latest data shows that venture-backed companies made 26,030 new hires in January, the slowest January since 2018 and a 65 percent drop from the 2022 peak.
You’re hiring fewer people, but you’re paying the ones you hire more equity. The median equity grant for AI and machine-learning engineers jumped 31 percent in two years, nearly triple the rate for everyone else.
The mechanism behind that is worth understanding because it’s yours to control. A smaller hiring plan can leave room for larger grants if the company chooses to allocate the pool that way. Equity is doing more of the recruiting work than it has in years, yet it’s the one part of the offer your candidate can’t read.
Source: www.inc.com
