As we are a small (but growing!) startup, we've kept compensation super simple. Our formula is:
SF benchmark x Cost of Living x Experience Factor
NB. We apply a floor to the Cost Of Living of 0.625.
As a general philosophy, we aim to pay at least in the top 25% of market for any given role. That coupled with a remote first and open source approach makes us able to hire many of the best people in the world. We think the fastest possible shipping comes from a leaner, stronger team, and our pay structure allows us to do that.
At the moment we do not have many different job roles. We expect everyone to be able to deliver features top to bottom. We take the benchmark directly from GitLab's job families file, as they have done the hard work of combining various data sources for most of these roles.
We will not adjust your pay downwards for existing team members if this ratio changes once you've already started working for PostHog. That means you can feel confident in your pay.
We use Cost Of Living numbers provided by Numbeo. To get your local Cost Of Living rate, compare your city with San Francisco. In this example, the calculation for London, UK would be $5,953/$8,365 = 0.71. Then, $160,000 x 0.71 = $113,600.
We apply a floor to the Cost Of Living. This is because it turns out that market rates for many roles do not linearly reflect Cost Of Living, and running the above formula in lower Cost Of Living areas often resulted in a below market rate figure. However, we do not wish to use local market rate for roles since the data is too granular to be statistically meaningful (we'd need a benchmark for every role in every geography - for more niche roles, this just wouldn't be possible).
The Cost Of Living floor means we may pay above the top 25% of market in certain geographies. This sounds like it would harm our capital efficiency - however, in reality, this affects low Cost Of Living areas, so the affect is nowhere near as pronounced compared to, for example, paying the highest rates in San Francisco. This also means in many geographies we should have an easier time recruiting the absolute best candidates.
|Senior+||up to 1.2|
Taking the previous example, a mid level engineer in London would make $113,600 x 0.8 = $90,880.
More experience does not correlate with increased importance. Seniority is not a title - we don't believe in having a huge hierarchy of roles, as each person at our stage needs to feel like the owner they are of the company.
We pay more experienced team members a greater amount since it is reasonable to expect this correlates with an increase in skill - being able to ship faster through less time having to work things out for the first time is valuable. Experienced hires can help upskill the less experienced hires in the team too. Team members who have less experience can see a steady increase in pay over time as they increase their experience and skill.
We believe at first increased skill comes from more time spent in the role. Over time, this judgement becomes more subjective and is instead based on the speed with which you can ship or help the team to ship, the quality of your prioritization and decision making and technical approach.
The next 7 hires will each receive approximately 0.25-0.5% of the company with a standard 1-year cliff, 4-year vest. Broadly, this will depend on the Level as per the Experience Factor. We may change this policy from time to time depending on our rate of hiring - ie if we had a gap in hiring for an extended period, we would adjust this.
If you're planning on relocating permanently, your salary will be adjusted (up or down) to your new cost of living.
If this represents an increase in pay, we need to approve this change in advance - we cannot guarantee it is always possible, as our budgets may or may not allow it.
If you plan on spending > 4 months/year in a place different from your home base, that will be adjusted in the Cost Of Living after 4 months.
For a trip with many destinations over a period of more than 4 months, the Cost Of Living will be located along the various places you intend to stay, averaged by the amount of time spent. If the resulting figure is below the Cost Of Living floor, we'd increase it to that figure. For example, if you spend half your time in London and half your time in Bali (where COL is $2,283), your COL factor will be (($5,953/$8,365)+(\33,000,000Rp/118,370,527Rp))/2 = 0.495. That would then be increased to 0.625 (because of the Cost Of Living floor). If this represents an increase in pay, we need to approve this change in advance - we cannot guarantee it is always possible, as our budgets may or may not allow it.
We do not expect to do any salary raises, adjustments or promotions until July 2021 outside of role or location based changes. After that, we will run an annual review cycle to evaluate your level of experience.