Compensation in Start-Up Companies

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Compensation in Start-Up Companies

• Andreya Davis
• Trish Turner
• Matt Boone
• Kristofer Borchard
• Michele Boren
• Dustin Haytema

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Its Movie Time !!

• Dirty Work
• lt What a great business idea gt

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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.

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Any ideas for a start-up?

• If this process were easy, wouldnt everyone own
  their own company?

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How are we going to break this issue up?

• Employers Perspective
• Employees Perspective
• Two viewpoints of the situation are better than
  just one!!!

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What are employers of start-ups searching for?
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We Need Employees!

• What Are We Looking For?
• Motivated
• Dedicated
• Independent
• Knowledgeable
• Open Minded
• How Do We Obtain This?
• Intrinsic Rewards
• Extrinsic Rewards

8
What Else Do We Consider?

• Legal Considerations
• Wage withholding
• Payroll Tax Accounts
• Employer I.D Number
• Workers Compensation and Insurance
• Compliance with FLSA

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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

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Why is compensation important?

• Tons of new start-ups
• Generated from the Dot-Com boom
• Start-ups are offering non-traditional 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

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Its Movie Time Again!!

• Boiler Room
• Isnt this what every employee is looking for?

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What Are Employees Looking For?
13
What Are Employees Looking For?
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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

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A Company That Did It Right
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JetBlue

• Beginnings
• David Neeleman
• February 11, 2000
• Investment Capital 130 Million
• 100 First-class

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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

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Compensation at JetBlue

• Market matched compensation strategy
• Benefits
• Medical/dental/life insurance
• Short-term disability
• EAPs
• 401 K plans
• Profit sharing
• Stock purchase plan
• Paid time off
• Flight benefits

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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!!!