Yes. The law is worthless for jobs that have complex pay structure. I wonder if this will cause a shift toward more variable comp in jobs that traditionally didn't have it. That would not be good for workers.
I think the main benefit of such a law is that it prevents wasting time on positions without competitive salary ranges. I don't want to have to go through 3 rounds of interview just to find out at the end their budget is locked at 12$ per hour.
Why would variable comp "not be good for workers"? At the extreme end of variable comp is a worker-owned collective, which a lot of people seem to be in favor of.
Variable comp could have positive effects (reducing the pressure to have layoffs during lean times, creating an environment where success is shared with those who participated in creating in, aligning incentives across different factions to better support customers).
Because variable compensation is not going to be variable in practice. It's going to closely track to the stated minimum. For some executives the variability is in the split between their bonuses and shareholders in the form of increased EPS. Employees get the remaining portion, if any.
Lower base pay would make the job postings relatively unattractive though. Wouldn't this law encourage higher base pay and lower bonuses in order to make the job posting look better?
It might stop me, yes. I would be more likely to apply to Apple, Google, or Meta because they have higher base pay (according to the numbers in the article).
Work at X, base pay $60,000 plus bonuses.
Work at Y, base pay $100,000.
I'd look into companies that are going to pay the most, which is why looking only at base could be bad.
For example, a senior software engineering manager a couple years ago might see something like Amazon,FB, and Google base salaries of $160k/$250k/$250k respectively.
That's only a fraction of the potential pay, though as both Facebook and Google have a 25% annual bonus. Amazon's package would likely include something like a $275k bonus for the first two years.
Now, add in stock. Both FB and Google would offer $1.4M+ worth of stock, vesting over four years. Amazon might be closer to $700k/800k at that time.
Finally, there are joining bonuses. I'm not sure about Google or Amazon, but FB can (could?) go up to $100k.
Regardless of the actual numbers, the point is that the "base" is less than 50% of your compensation in many cases. It's certainly an important data point as one thinks about possible future stock values, etc, but it sometimes only tells part of the story.
> Yes. The law is worthless for jobs that have complex pay structure.
I disagree. Comparing base pay is the only objective way to compare salaries. You start to get something a kin to fraud when starting to compare "complex pay structures", which are easy to manipulate and use to screw you over if handled by less scrupulous employers/managers.
Also, it seems the law forces companies to list base pay, but they are very well able to complement that info with what they offer to complement the base pay.
I work in an industry (Tech) where stock-based compensation for senior folks like me is > 50% of my compensation, and in many cases, that's where the difference in pay arises. Having just the cash compensation made available isn't terribly helpful. For example, my current job has a 5% higher salary than a previous job, but my total income is about 50-60% lower (I'm also much, much happier, FWIW)
All that said, I think the folks that this really is designed to help will substantially benefit from having greatly increased transparency.
12 comments
[ 3.5 ms ] story [ 38.4 ms ] threadVariable comp could have positive effects (reducing the pressure to have layoffs during lean times, creating an environment where success is shared with those who participated in creating in, aligning incentives across different factions to better support customers).
For example, a senior software engineering manager a couple years ago might see something like Amazon,FB, and Google base salaries of $160k/$250k/$250k respectively.
That's only a fraction of the potential pay, though as both Facebook and Google have a 25% annual bonus. Amazon's package would likely include something like a $275k bonus for the first two years.
Now, add in stock. Both FB and Google would offer $1.4M+ worth of stock, vesting over four years. Amazon might be closer to $700k/800k at that time.
Finally, there are joining bonuses. I'm not sure about Google or Amazon, but FB can (could?) go up to $100k.
Regardless of the actual numbers, the point is that the "base" is less than 50% of your compensation in many cases. It's certainly an important data point as one thinks about possible future stock values, etc, but it sometimes only tells part of the story.
I disagree. Comparing base pay is the only objective way to compare salaries. You start to get something a kin to fraud when starting to compare "complex pay structures", which are easy to manipulate and use to screw you over if handled by less scrupulous employers/managers.
Also, it seems the law forces companies to list base pay, but they are very well able to complement that info with what they offer to complement the base pay.
All that said, I think the folks that this really is designed to help will substantially benefit from having greatly increased transparency.