How does FairSetup compare to: Salary, Hourly, Stock Options, Equity, Bonuses?

FairSetup offers numerous advantages over existing models:

  • Salary/Hourly pay for time, not impact.
    • A high salary doesn’t always translate into productivity.
    • Paying hourly creates an incentive to spend more time.
    • FairSetup: people accept a lower salary and participate in the upside.  This “skin in the game” results in employees caring deeply about the outcome.
  • Stock Options/Equity are a bad short-term incentive.
    • Hard to evaluate actual worth.
    • Require significant effort to deploy.
    • Equity is hard to take away – there is no divesting.
      • Dilution is not a good solution for large dynamic teams.
    • Stock options generally expire after an individual leaves.
      • Stock options can have reverse vesting, but it’s rare.
    • Tax issues…
    • FairSetup: impact-based compensation can be paid out as part of salary and an individual automatically divests over time after departure.
  • Bonuses – are not an effective way to manage people unless very carefully used.
    • Small bonuses – people are upset because they don’t make enough.
    • Large bonuses – people are upset because then the boss must make an even larger undisclosed amount.
    • FairSetup: the compensation is transparently connected to profits.

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