Transparent Leadership – “Open Salaries”

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This is an exciting Concept published by Buffer (Bufferapp.com).  How many organisations big or small are ready for this level of tranparency?

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.

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. Talinn, 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: 45 day Freelance period 

For the freelance 2 month period for new hires, we take the +10K (salary over equity) option and then translate that into a daily rate. At the end of 2 months, the person can choose to reduce salary for more equity.

Current Salaries 

  • Joel (CEO)= $158,800 (75k Executive Officer base + 20%, + 12k/$m revenue, 1.2X, +22k,)
  • Leo (COO) = $146,800 (70k Operations Officer base + 20%, + 10k/$m revenue, 1.2X, +22k)
  • Sunil  (CTO)= $137,600 (engineer + 20% + 8k/$m revenue, 1.2X, +22K, +10K)
  • Carolyn  (CHO) = $106,000 (happiness +20% +8k/$m revenue, 1.2X, +22K)
  • Andy (Senior iOS Engineer) = $107,900 ($60,000 + 5% + 2*$3k, X 1.1 + 22K + 10K)
  • Michelle (Growth Engineer) = $98,000 (engineer, 1.1X, +22K, +10K)
  • Åsa (Senior Happiness Hero) = $85,900 ($45,000 + 5% + 2*$3k, X 1.2 + 22K)
  • Colin (Senior Backend Engineer) = $104,800 ($60,000 +5% + 2*$3k, X 1.2 + 12K + 10K)
  • Belle (Content Crafter) = $82,000 (content crafter, 1.2x, +12K, +10K) * 0.8 (Belle works 4 days a week)
  • Brian  (Designer) = $94,000 (designer, 1.2x, +12k, +10k)
  • Matt  (Android Engineer) = $94,000 (engineer, 1.2x, +12k, +10k)
  • BMR  (Happiness Hero) = $76,000 (happiness hero, 1.2x, +12k, +10k)
  • Niel  (Frontend Engineer) = $88,000 (engineer, 1.2x, +6k, +10k)

Team members in the 45 day Buffer bootcamp period

  • Mary (Happiness Hero) = $70,000 (happiness hero, 1.2x, +6k, +10k)
  • Adam (Happiness Hero) = $76,000 (happiness hero, 1.2x, +12k, +10k)
  • Toby (Backend Engineer)  = $94,000 (engineer, 1.2x, +12k, +10k)
  • Zach (Backend Engineer) = $94,000 (engineer, 1.2x, +12k, +10k)

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.