Compensation in Start-Up Companies

Andreya DavisTrish TurnerMatt Boone

Kristofer BorchardMichele 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?MotivatedDedicated IndependentKnowledgeableOpen Minded

How Do We Obtain This? Intrinsic RewardsExtrinsic Rewards

What Else Do We Consider?

Legal Considerations:

Wage withholding Payroll Tax AccountsEmployer I.D NumberWorkers Compensation and InsuranceCompliance with FLSA

How to Compensate Beyond the Legal Minimums

Employer must decide what to offer (Afford):Base Pay

Salary vs Hourly Rate

Stock OptionsHealth Benefits401 K PlansVacation PackagesCombinations

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

It’s Movie Time Again!!

“Boiler Room”Isn’t this what every employee is looking for?

What Are Employees Looking For?

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What You Ranked Most Important(Results From January 21 Survey)

What Are Employees Looking For?

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2

4

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Benefits Incentives Coworkers Important work

What You Ranked Second Most Important(Results From January 21 Survey)

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

BeginningsDavid NeelemanFebruary 11, 2000 Investment Capital:

$130 Million100% First-class

Employees

Want great costumer service “Real enticements to come from the inside

out.” Motivated by intrinsic…

Work-life balanceElimination of Titles

…and extrinsic rewardsComprehensive 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!!!