Why some companies are letting new hires customize their compensation with different combinations of salary, equity and, in some cases, benefits
Many employers now adopting personalized comp packages are smaller firms competing for talent against bigger companies, particularly after a 32% drop in the technology-heavy Nasdaq index this year and aThe customized approach reflects a wider push among businesses to give staff a say in their work situations, from experimenting with shorter workweeks to trading vacation time for money. Like Unlearn, many of those letting recruits pick their pay also give employees the option to work remotely.
Carta says it got the idea from client Civic Eagle, a primarily remote-work company that has been giving new hires a choice of varying stock-equity combinations since 2019. Recruits sometimes worried that being given options might be a trick to shortchange them, says Damola Ogundipe, chief executive of Civic Eagle, which uses AI to discover, track and analyze public policy.
CEO Todd Wiesel says that many developers he has hired outside the U.S. choose the highest-equity option, because the salaries they make from a U.S. company, even if lower, “go so much further than [the standard pay] where they live,” he says. Developers at the company typically get an annual starting salary in the low to mid six figures, he said.Mr. Wiesel says he first offered the personalized compensation options to lure a particularly valuable employee to the company.
Otherwise, companies may lose track of why employees earn such widely different salaries, he says. “All the company will see is there is an employee who is below others on cash and may then need to make an adjustment to ensure parity.”