Because the valuation of an employee's contribution to an organization, as assessed by management, is usually bullshit.
If the product succeeds, all the employees benefit, and if the product fails, all employees suffer together.
Now, for a large organization, the ability for individual employees to influence revenue or profit at the organization level is negligible, so you need different strategies for compensating your employees. And the article concedes their approach won't scale past a certain company size.
The goal is to treat the salary as a necessary (evil?) for "what you need to feed your family, buy a house, etc..." and not as the primary motive for work.
An employee who makes a valuable impact does so because they want to see the company/product succeed.
With most companies, this is a comical assertion only applicable to 20-somethings who haven't realized that their employer will betray their trust one day. At least in the US.
Until companies start rewarding longevity and favoring employees over executive bonuses when budget crises occur, employees will also be mercenary and seek out better compensation if they have the opportunity. US companies, by and large, will slash staffing or employee bonuses before cutting management or executive positions and/or bonuses during difficult times, even when they have the capital to avoid those cuts if the so-called leaders would be willing to make a personal sacrifice.
Now in the case of the posted article, the compensation is already good. So that changes the calculus ($180k/year may not be the best SV salary out there, but it's very good across most of the US, even for developers). And by leveling the pay at an already good salary it can further change the motivation of employees. But try fixing the salaries at, say, the median household income of central GA (depending on which county somewhere between $30k and $45k). Sure, the boss can say, "I'm suffering with you." But the employee is still going to seek out better pay.
This seems shortsighted. Even after your immediate needs are covered, you can be a long way away from being comfortably able to feed your family next year, in ten years, in twenty years, even if things change.
An employee who demands as high a salary as they can get for the work they do may just be thinking more long-term.
In this case, you are being paid $15K per month to work to make that ticket pay off.
If not, then the differentiation in compensation just moved to whatever liquidity event.
Why should it be the same? If I join a year after you, I sure as hell hope you have more, all else being equal. If we join the same day and you are twice as critical to the success, I hope you have more, because your incentive pulls my outcomes higher.
However, amount of and terms around equity are part of the overall compensation package, and if the principles espoused in the document are relevant to salary, then they should also be relevant to the equity component of compensation as well, no?
For equity, earlier grants are at a riskier time (and where your contributions are more concentrated and influential). Earlier employees should get more (not just have more after 2 years compared to the new joiner, but for their first grant to be vesting more next year than today’s joiner’s first grant).
There’s are things that I personally wouldn’t like about the scheme, but I think it’s quite hard to make a “it’s too unfair” principles-based argument against it.
If a job or position is less valuable, why shouldn't that position be paid less?