I admire Buffer for being so transparent with their salaries, but I don't think I would ever decide to work for a company that mandated it.

In my (admittedly limited) experience, mandating salary transparency tends to increase the salaries of low performers and reduce the salaries of high performers. It usually eliminates the potential for negotiating raises and poses difficult questions about paying some employees more than others in the same band.

Case in point: according to Buffer's salary calculator[1], a "master" (their highest rank) backend developer living in San Francisco and optimizing for salary over equity would earn about $155,000/year. I can't think of any definition of "master" developer that could be competitive for. Friends of mine at AmaGooBookSoft and even other startups have earned nearly double that for being merely "senior" (L5).

[1]: https://buffer.com/salary?r=1&l=10&e=3&q=1

The $155k salary might be due to the transparency, but could it also be due to a simple inability to pay developers $300k+? That's well over double the CEO's salary. I think it's clear they simply don't have the revenue and cash reserves to pay developers that kind of money. I suspect you'll find this to be true at a lot of smaller startups that rely on actually making money instead of fundraising.

Also, Buffer is entirely remote. I bet many people are willing to take a big pay cut if they don't have to commute to an office building every day (and of course, other people like office life -- but remote positions are rare, so it's normal that they're more "expensive" for employees who really want them).

Also, if you're working remotely from a more affordable location you may not need as much salary in order to live a very comfortable life.

I think our expectations are skewed by the crippling cost of living in SF, New York, London, etc.

Buffer actually adjusts the salary based on location, so this is (at least partially) taken into account.

The salary is peanuts compared to what that CEO gets compensated.

The latest model I have seen showed founders making about one-third of top-level employees.

In take-home income right? They still have sizeable ownership of the company and vesting.

Yes, they are willing to forego significant salary because they will control most of the profits.

You mean "hypothetical profits". There's a distinct possibility of there being no profits at all.

High risk, high reward.

Profits? You must be joking.

They recently took around $3m off the table if I recall correctly.

It was $2m in 2014

It's definitely a great business case study. Most people don't get exposed to this kind of stuff.

> earned nearly double that for being merely "senior"

Not as a base salary. No way. They earn that, but ~50% comes from equity.

What's the difference? Equity in a public company is cash. You can even lock in what your RSUs will be worth when they vest with some options contracts.

Because it's apples to oranges. You take a larger chunk of illiquid stocks/options at a private company in exchange for the risk that it won't go public one day. That's an active tradeoff people are making whether they know it or not, so you can't compare salaries at a private company and illiquid equity to salaries + liquid equity at a public company.

So if I enter a casino with 100 bucks set on betting on number 23, it means I actually own 1000 bucks? (or whatever that gives you?) Giving stock on a public company you can sell the moment that vests is valuable. Owning stock on a private company that you can't sell, can't probably cash in unless they IPO, etc is not.

Yes that is the description of an illiquid potential future asset and a liquid current asset. both things that were addressed in my above comment.

I think you're going to get perfectly good developers for $150,000. Are you going to get twice as good ones if you pay twice that, or just greedy ones? Have transparency and let someone else pay the darlings. You'll still get your work done.

This exact "greed" rhetoric is what helps businesses keep dev salaries down. You don't get greedy people for that much, you get smart business people (they know their worth and charge for it).

I do not understand devs who justify low salaries this way.

Why make 50% of your potential?

What do I have to sacrifice to earn 100% more money? There's a lot more money in doing harm than doing good, and I will gladly take less money to do good.

In this case, you maybe don't have to sacrifice much at all. There are plenty of good reasons to go work at a large software organization, e.g. stability, and most startups will work you harder for less tangible benefit.

Exactly. If you are just greedy then programming is not the right field. Much more reliable to make a boatload of cash through other means if that's all you care about.

I think you're misunderstanding what he is saying.

I'm not justifying low salaries; i'm saying that $155,000 is plenty.

"plenty" by what metric? It seems to be less than market rate (for good experienced developers). What other metric should we use?

Some people may be willing to take less pay in order to have more control/freedom in a small startup, rather than just being a cog in the machine at Google or Microsoft.

$155k is already pretty obscene, let alone double.

Around here, $50k entry and $90k 10y+ senior for developers is fairly standard.

Salaries in the San Francisco Bay Area are very high compared to the rest of the world due to high housing costs and extreme demand for engineers. $155k is average for 5-10 years of experience at a non-startup. You can certainly go much higher or lower depending on the company, your experience and your negotiation skills.

I'm comparing to Southern California; I doubt the Bay Area has 65% higher cost of living.

I'm not sure if it does or doesn't, but the salary of $155k is normal in the SF area.

Check out AngelList's salary tool: https://angel.co/salaries . Median salary for 'Developer' is about $120k. More for a backend developer.

GlassDoor gives an average salary of $120k for the same area: https://www.glassdoor.com/Salaries/san-francisco-engineer-sa...

Cost of living is at least that much higher. Compare rent in San Diego (say, clairemont) vs Rent on the peninsula at equivalent house size. Easily 100% more.

> extreme demand for engineers

Where is "around here", Europe? Because anywhere in the U.S. is going to have a higher starting salary than $50k.

It is very interesting to me that the founders have agreed to pay people in very low-cost-of-living areas almost as much as people in San Francisco. I'm pretty sure USD$95k in South Africa, Croatia, or Italy beats the pants off $120k in SF lifestyle wise. I guess the founders have not traveled to these places or fine with overspending?

The value the developer brings to the table does not fluctuate with the cost of living of the place he lives at. The profit that can be made in arbitraging CoL should mostly go to the developer, since he is the one who also has to bear the negative features of living in a low CoL place, which are often overlooked in a naive dollar-to-dollar comparison.

Looked at from the other side, it's a competitive process between employers and there's no reason why other companies wouldn't pay top dollar for a top developer. If Buffer didn't pay it, the developer would find another employer who would.

Why do this? I don't understand ... am I just being too old school / narrow minded about this?

I have several friends who have received large salary increases when they were about to quit. This clearly shows that they were payed too little before. The kind of transparency buffer shows in this sheet can prevent such a situation.

Having a transparent formula for salary limits or removes the effects of negotiation, which likely benefits engineers (typically bad at negotiating compared to e.g. sales people) and women/minorities (worried about increasing "otherness" further and sometimes lower leverage, at least in tech).

There are potential downsides such as increased politics or income inequality pressures, but it seems like a viable policy at least. I'm curious how someone like Google's Laszlo Bock would respond to this approach in comparison to their "pay unfairly"[1] mentality.

[1] http://www.businessinsider.com/google-policy-to-pay-unfairly...

It's part of their ethos, be totally transparent on how much everyone gets paid. You can't negotiate or ask for a different salary, there's a calculation.

They've got blog posts about it.

https://open.buffer.com/introducing-open-salaries-at-buffer-...

Not only salaries but also expenses and income, among other things.

IIRC, Fog Creek does the same and also have some explanatory posts.

What are Happiness Heros? Customer service or HR?

I think they might be the customer success team he mentions in the article.

I wonder if those laid off were from the "chose higher salary over equity" crowd. It's certainly more attractive to do so and that's something people should consider when given that choice.

Well, I am apparently massively underpaid.

And I have to commute to work. Lose-lose.

TBH, that's a win-win. There's nothing better than being content with what you're paid, and then learning that there's huge upside potential.

The worst thing ever is finding out that you're in the top 2% of salaries for your role in the industry, and then knowing there's nowhere to go but down from there.

That's an odd statement. I don't think I'd be disheartened to learn I'm in the top 2% of salaries. That sounds like one of those good problems to have.

It also doesn't make sense - there is plenty of room to move up even if you're in the top 1% of salaries. The curve doesn't abruptly end at the top, there is a long tail of increasing salaries at the 1%, 0.5%, 0.1%, etc marks.

But, does finding out that you're in the top 2% change your salary or lifestyle, or is it just learning something about what already is?

Finding out you're in the bottom 25% is also just learning something that already is; but in this case, it's empowering information.

Note that we're talking about somebody who just learned about something that already is.

>There's nothing better than being content with what you're paid, and then learning that there's huge upside potential.

That's a good point. I feel somewhat fiscally irresponsible since I have student loans and such. On the other hand, part of the reason I'd like to make more money is because a lot of my close friends became engineers, etc, and make a lot more money. It's not very fun to always be the guy who is like "Uh, guys, can we plan something a little cheaper?"

I'm contributing to my 401k and I'm saving money on top of that though, so I don't really have much to complain about. It's just little things.

It's not a win win at all. If OP could get a job they were equally happy with in other aspects that paid more and had less commute they would be better off. Their situation is probably fine but it's hard to spin low salary and long commute as positives.

The positive is that your currently happy, but in a easy move increase it even further.

I was thinking, a lot of them are _underpaid_. I work remote as well.

That may be true. We might also be looking at different job titles as well. I spend about 50% of my time as an analyst, and 50% of my time doing database marketing. Their employees in marketing roles and analyst roles are both paid significantly more than me.

I'm not entirely surprised though, the non-profit I work for pays poorly even compared to other non-profits. Compensation is the same for everyone on a similar level regardless of what the responsibilities of the role are. I have a much more specialized and technical role than everyone else, so there is no way that my compensation is commensurate with my experience or responsibility.

I'm not bitter about it, a huge part of why I'm under compensated is because I've been allowed to make the role my own and take on a lot of additional responsibility. In a sense I've grown out of my title. I'm just shocked by how much less I'm actually making.