Compensation is hard to get right. It's a tool to keep us aligned, but it's easy to design a compensation strategy with harmful side effects. Our obsession with simplicity serves us well so we opted for a strategy that’s easy to administer and understand.
Our approach is to pay above market wages for all positions. While many companies develop bonus programs that are difficult to understand and create undesirable incentives, our simple approach encourages financial discipline and long term thinking while reducing anxiety.
Encourage financial discipline
Doing more with less is the only way to pay exceptional wages. This incentivizes us to avoid wasteful spending, such as over hiring, and to be vigilant about hiring top performers, designing effective processes and avoiding low impact activities. Doing these well strengthens our ability to provide exceptional compensation for the long term.
Encourage long term thinking
Bonus programs tend to encourage a short term focus by tying compensation to annual results. We hope our team retires at Sticker Mule. Paying above market wages encourages us all to be committed to making our company financially stable for the long term.
Some companies use bonuses to compensate people because they can be reduced. This creates anxiety for both employers and employees. Employers stress about the disappointment created if bonuses don't meet expectations while employees, who have limited control over results, have anxiety over exactly what their bonus will be. By focusing on offering exceptional wages, we reduce uncertainty and make a lasting commitment regarding pay.
How we determine wages
We design sensible pay grades that define what a person makes based on their role and years of service. Grades may be revised upwards based on changes in the job market or nature of a job, but we do not offer wages to new hires that deviate from our system. If a grade increases, it constitutes a pay raise for everyone on it.
Why we don’t use equity based compensation
Companies use equity to encourage long term thinking and reduce costs by exchanging wages for equity. While these are desirable characteristics, equity-based compensation has downsides. It shifts risk onto employees and requires outside investors to allow employees to realize the value of their equity.
By avoiding investors, we have absolute freedom to focus exclusively on the well-being of our customers and coworkers. We can be as big or small as we want and grow at a pace that’s sensible and pleasant. Our freedom allows us to attract exceptional people and maintain outstanding employee satisfaction.