Compensation in Start-Up Companies
Andreya Davis
Trish Turner
Matt Boone
Kristofer Borchard
Michele Boren
Dustin Haytema
It’s Movie Time !!
“Dirty Work”
< What a great business idea >
How does this pertain to start-ups?
 Every company starts with one great idea.
 Their idea was generated by market demand.
 The events that come next are typically the hard
part.
Any ideas for a start-up?
 If this process were easy, wouldn’t everyone
own their own company?
How are we going to break this
issue up?
 Employers Perspective
 Employees Perspective
Two viewpoints of the situation are better
than just one!!!
What are employers of start-ups
searching for?
We Need Employees!
 What Are We Looking For?
 Motivated
 Dedicated
 Independent
 Knowledgeable
 Open Minded
 How Do We Obtain This?
 Intrinsic Rewards
 Extrinsic Rewards
What Else Do We Consider?
 Legal Considerations:
 Wage withholding
 Payroll Tax Accounts
 Employer I.D Number
 Workers Compensation and Insurance
 Compliance with FLSA
How to Compensate Beyond the
Legal Minimums
 Employer must
decide what to offer
(Afford):
 Base Pay
 Salary vs Hourly Rate
 Stock Options
 Health Benefits
 401 K Plans
 Vacation Packages
 Combinations
Why is compensation important?
 Tons of new start-ups
 Generated from the Dot-Com
boom
 Start-ups are offering nontraditional as well as traditional
compensation systems
 Stock options
 Anything to entice the
prospective employee
 The current down-turn in the
economy
 Skepticism of compensation
within start-up is very high
right now
It’s Movie Time Again!!
“Boiler Room”
Isn’t this what every employee is looking for?
What Are Employees Looking For?
What You Ranked Most Important
Benefits
Imp ortan
t wor k
s
Co wor ke
r
J ob sec u
rity
g w ork
Ch alleng
in
16
14
12
10
8
6
4
2
0
Base s a
lar y
(Results From January 21 Survey)
What Are Employees Looking For?
What You Ranked Second Most Important
(Results From January 21 Survey)
8
6
4
2
0
Benefits
Incentives
Coworkers
Important work
Why would you join a start-up
company?
 Endless opportunity for advancement
 Becoming a major owner in the firm
 Having a voice in the company
 The chance to make a difference
A Company That Did It Right
JetBlue
 Beginnings
 David Neeleman
 February 11, 2000
 Investment Capital:
$130 Million
 100% First-class
Employees
 Want great costumer service
 “Real enticements to come from the inside
out.”
 Motivated by intrinsic…
 Work-life balance
 Elimination of Titles
 …and extrinsic rewards
 Comprehensive pay and benefit package
Compensation at JetBlue
 Market matched
compensation strategy
 Benefits
 Medical/dental/life
insurance
 Short-term disability
 EAP’s
 401 K plan’s
 Profit sharing
 Stock purchase plan
 Paid time off
 Flight benefits
What Have We Learned?
 Get lots and lots of
start up capital
 Be knowledgeable on
how to compensate
and motivate
 Watch the dough roll
in!!!