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Comment by pm | Hacker News Reader

I've always been curious about trying a system that rewarded people for the value they created now, instead of owning shares/options and waiting for a liquidity event. Bonuses are the traditional option I guess, but is there anything else? How else might you distribute a portion of funds earned by the company in a meaningful manner to employees?

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Some companies have a profit-share program where they pay a percentage of the profit earned that year to employees in addition to salaries.

That's great but only for profitable companies which doesn't describe most startups. The other reason they usually use equity is because they're relatively cash poor

The company I work for has in past years paid a bonus based on metrics that try to approximately characterize the value being created at the company. This could be considered an alternative to profit-share for companies that have no profit.

I was leaning more towards a profitable business than a startup in my thinking.

grant actual shares of restricted stock (as opposed to options) and then pay dividends?

Preferred stockholders usually have terms on their preferred shares that entitle them to a cut of any dividend paid. I think that in those cases, most of the dividend would end up going to the investors which is probably not what's intended.

Salary?

All forms of cash comp are things startups will want to minimize for burn rate reasons. Also, startups are risky and giving out lots of cash comp takes employee risk out of the game, which is arguably undesirable.

Apologies, I meant on top of the usual wages/salary.

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