SUMMARY
In 30 seconds
Kaz Nejatian says Shopify lets employees allocate a compensation amount among salary, equity and other options, and describes the work required to build the system.
- 1A compensation poolEmployees can allocate compensation rather than receiving only a fixed mix.
- 2Implementation challengesNejatian describes legal and equity-process obstacles.
- 3A company perspectiveHe says the transition was painful but considers the result strong.
Takeaways
- Employees can allocate a compensation amount across different forms.
- Nejatian says implementing the change required equity-process changes.
- His comparison with other companies is a subjective claim.
FULL TEXT
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01
Flexible compensation
Nejatian explains the allocation approach and its implementation.
Kaz Nejatian says Shopify changed its compensation approach: instead of a predetermined mix of salary, equity and bonus, employees receive an amount and use software to allocate it among options.
He says implementation required changes to equity processes and faced legal obstacles in Europe. He recalls CEO Tobi Lütke writing substantial code to make it work, and describes the transition as painful.
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