Matt Schulman

Conventional wisdom has been to review your data once (or maybe twice) per year. This is largely driven by the time intensive nature of each review process. Given the influx of new market pricing tools being built by various vendors (which is great!), I can envision a not-too-distant future where market pricing happens at a more frequent cadence...or perhaps even an "always on" eventual setup. Of course, the downstream implication of "always on" market pricing is how frequently to run a merit cycle ("always on" merit cycles are probably bad for numerous financial and cultural reasons). But the more on top of market trends that heads of total rewards can be, the more effective they will be at their jobs.

One key consideration is equity compensation. Two notable issues as you consider how to reward employees with equity grants globally. 1) Culturally, many parts of the world do not understand and/or value equity the same way that folks in, say, San Francisco do. 2) Tax-wise, some countries' policies make it extremely difficult to receive equity as a startup employee. For instance, countries like Belgium impose a tax upon grant date for essentially illiquid stock option grants.

I'd recommend triangulating between numerous market datasets (radford, mercer, pave, etc). Different datasets have pros/cons in different regions, and it's up to you to triangulate and make the right decision. One way to simplify this problem is to consider the pay differential between regions across all job families. For instance, with San Francisco Bay Area as the base, the pay differential according to Pave for Canada is 61%...so if you pay an employee $100k USD in SF, that same would employee would make $61k USD (or $83.51 CAD) in Canada. It naturally gets more complex when you consider the breakdown by job family, level, etc. But a simple pay differential is a good starting point.

Agreed. The Head of Total Rewards is stuck in the middle of a pressure cooker. Upwards, the Board + CEO & CFO are fighting for lower burn (especially equity burn). Laterally, managers all think that they have "another superstar IC" who should be an exception to the rule and paid above band. Downwards, employees all generally tend to think that they're underpaid (even at 90th percentile companies like Meta). It's not an easy job, and tough decisions have to be made.

A new trend being adopted by the most innovative companies is a "flex comp" type strategy where employees have agency to decide how their compensation is comprised. E.g. if they value cash more than equity, they can opt to receive their bonus in cash rather than an equity grant. Shopify is the leading edge of this movement, there are other notable companies (e.g. Spotify) following en suit.

Love this. Recognition is key and can be even more retentive than more "expensive" things like spot bonuses, etc.