UPDATE November 25, 2015: We have a brand-new salary formula and an updated, searchable list of all our salaries. Find it all here!
When we first established the Buffer values that we wanted to have as the center of our company culture, we knew that sticking to these ideas would 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 has 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:
- Complete openness about our revenues and user numbers: Every month we publish the investor update here on the Open blog.
- Progress reports on Buffer’s customer support, Buffer blog performance, Buffer for Business performance: Holding ourselves accountable and putting all these monthly reports out there, was another big step.
- 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)
- Personal self-improvement at Buffer: To make this fully transparent, we are using IDoneThis to help us share our improvements daily and keep ourselves accountable. We’ve also published more around this here.
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 share what we each make?
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. Tallinn, 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: Our 45-day freelance period
For the 45-day “bootcamp” period for new hires, we take the +10K (salary over equity) option and then translate that into a daily rate. At the end of 45 days, the person can choose to reduce salary for more equity.
All our current salaries
You can see all our salaries, at any time, at this public spreadsheet. Here’s where they stand right now:
We also make public our equity formula and full individual breakdown. You can see our equity choices and individual percentages on the same spreadsheet.
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.