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HOUSEKEEPING 📨

The trailer for the new Facebook movie dropped with Jeremy Strong set to play Zuck. Although I’m not sure that I should, I kinda feel sorry for Zuck. I’m convinced he’ll go down as one of the great villains of our time. Steve Jobs created the iPhone, but something tells me if he saw what phones and social media had done to us, he’d already have invented the alternative.

Zuck knows about the addiction, the self-harm, the polarization, yet he propagates it. I don’t know how you can live with yourself being the head of a company so corrosive to society. The good news is Meta got slammed by a recent lawsuit, so here’s hoping there is some light at the end of the tunnel. A future free of phones and social media would be a wonderful future. Now, let’s dive into today’s piece.

INTERVIEW 🎙️

Matt McFarlane, Founder & Director at FNDN

Matt McFarlane is the Founder & Director of FNDN, a compensation consulting practice for startups and high-growth tech around the world. Before FNDN, he led the People Experience team at Oyster, where he set pay across 70+ countries while headcount went from 250 to 650 in 12 months. FNDN takes on only a handful of clients at a time, usually companies between 50 and 500 people, and works on the unglamorous plumbing of pay. Compensation philosophy, job levels, salary bands, pay equity. Alongside it, Matt hosts the FNDN Series podcast and newsletter, and founded the Startup People Summit, whose inaugural event in 2025 ran more than 40 sessions across five tracks.

None of this was the plan. Matt's career started when a recruiter talked him into a twelve-month admin job. He used it to get a foot into HR, and he moved through generalist roles in legal, professional services, and manufacturing before landing in high-growth tech and finding the thing that stuck. What makes him worth reading is that he refuses to treat pay as a number. He argues that the default employee stance on compensation is mistrust, that most companies quietly rack up 'people debt' by making pay calls without structure, and that the bill lands the moment a second and third person are hired into the same role. He was named a LinkedIn Top Voice in Australia in 2025 and one of the HR Influence Awards Top 12 for ANZ in 2026.

What is the biggest myth about pay transparency?

A lot of people think pay transparency is just putting a number in front of people. There are Buffer-style companies out there that have the most extreme version of it, and I think that the idea that everyone knows what everyone earns is another myth. Fundamentally, pay transparency means people understand why they are paid what they are paid and how it has been determined.

But it's so much more than that. Telling someone the salary range for their role is one thing, but explaining it is another. What I learned implementing this at the companies I worked at is that most of the work only starts once you've shared the number. That's when you have to help people understand how it was determined and where they sit inside it. You've got to think about how you educate new employees, how you educate existing employees, all those sorts of things. It's really not a case of sharing the range and ticking the pay transparency box. There's so much more to it, and people often don't realize how involved it can be.

So it's really transparency of the methodology?

For me, arguably, that’s the most important thing. I don’t know how many times I’ve surveyed people and asked them to put up their hand if they think they’ve ever been paid unfairly in their career. Everyone puts it up. The default stance on pay is mistrust. People just assume they are being taken advantage of in some way and that the company has all the power. They are buying the benchmark salary surveys. They know what other people doing this job are earning. You don't.

So, when it comes to pay transparency, for me, it is fundamentally about showing, as a company, that these are the roles we have, this is how we think about what they are worth, here is how we assess the market, and here is what the market is saying.

What are the pros and cons of the Buffer model?

Typically, to do pay transparency effectively, you need a strong foundation in how you think about pay. Because, as I said, people don’t care about the number; they care about how you have arrived at that number and how you can explain, defend, and define it. I have worked with companies that have had a Buffer level of pay transparency, but they haven’t had a compensation strategy. There was no job level framework and no market data at all. And not knowing why you are paid what you are paid and why I am paid what I am paid is really just damaging.

The con a lot of companies see is that you have to sort out all the bottom levels of the pyramid before you get anywhere near the pinnacle of pay transparency. You have to be able to explain how you think about pay and how it works at your company. For a lot of companies, there's a lot of baggage to unpack and effort in building that. Building those practices is the main thing I help companies do, with or without the step to pay transparency.

A lot of companies see it as rigid and inflexible too. Most companies that do have compensation practices have these really big, wide bands, like $100k to $200k. They've got people sitting in all different parts of the band, or outside it entirely, while nobody really knows why. Issues start when there’s poor governance around how those bands get used. So the second you want to flick the switch on transparency, you have to get much stricter about why one person sits at the bottom, and another sits at the top. Or you go the Buffer route and drop bands altogether in favor of a single rate—you're in this role, this is what we pay, you're either happy with that or not, and we decide from there. In countries like the U.S., where there's a strong negotiation culture, that can feel limiting. But there are plenty of ways to counter it by baking it into the recruitment process from the get-go.

On the pros side, for me, it's such a trust booster. At the last company I worked at in-house, we took a stance almost identical to Buffer's. We built an app in a no-code tool and shipped it to 650 employees. They could look up the salary for any role in any geography in the world. When you make that kind of commitment, and you do all the other things that enable transparency, what it does for trust is unbeatable, in my experience. It takes a lot of the uncertainty out of the equation, and a lot of the self-advocacy people feel they have to have for themselves.

What does 'people debt' actually mean?

It's fundamentally you making a trade-off or a shortcut. It obviously has similarities to tech debt, but here you're taking a shortcut in your people practices to move faster and ship something. It could be hiring, could be progression, could be compensation, performance, whatever. The example I see most often is in compensation. We're hiring for a role, we don't know what the salary should be since it’s the first time we've hired for it, so we just offer the person whatever they asked for in the recruiting process. We haven't benchmarked it. We haven't really thought about it. We've consciously decided not to build any framework that keeps it consistent with our other offers and with the market.

The debt part kicks in when you start hiring more of these people. Now you've got three or four people doing the same job. Everyone's seen that video of the two monkeys in the cage. They both do the same action; one gets handed a cucumber, and the other gets a berry. Monkeys love berries, so the one with the cucumber is like, ‘What the hell? Why am I getting that and not the berry?’ That's pay equity in a nutshell. We're the monkeys. People don't like being paid differently for the same work when they think they're at the same level.

This is where you want to be able to say: these two roles are doing the same thing, we value them the same, we pay them the same. That's exactly where a lot of companies get stuck. Suddenly you've got a few people in the same role; they talk to each other about what they're being paid, and they realize there's no consistency. That's when the issues start landing on leaders and HR.

So how do you fix people debt?

I see this come up most commonly with organizations building their pay ranges for the first time. They inevitably end up with people in three different groups. Below the range, in the range, or above the range. The people above the range are the real challenge. The first thing to be conscious of, especially with the startups and scale-ups I work with, is that these are your founding people. They know all the shit about your company. They know how everything works, and you can't risk losing them. So I rarely see an organization say—and I'd rarely recommend it—“Hey Bill, you're on 150k, and the band now tops out at 130k. Sorry, mate, no pay increase until the range catches up.”

One solution I've helped companies put in place is that you still get an increase, just a smaller one than everyone else. There's still movement, and there's still some acknowledgment that the market is shifting and the cost of living is changing. The alternative, which I'm more of a fan of, is to give that raise as a bonus instead of adding it to your salary. The salary stays the same, but the person still gets cash in their pocket. It works as a relief valve, so they’re getting paid without pushing themselves further out of alignment every year. And of course, the other option is to ask whether we should just be promoting them. If a person moves into a higher-level role with a higher range, suddenly they’re back in range. So there are a few different routes, but those are the most common solutions.

How much should a company budget for salary growth each year?

A lot of companies get caught up in cost of living as a proxy for budgeting their compensation review cycle. I often have to take it back to basics with the whole organization, but ultimately it comes down to clarifying what CPI actually is. The ‘consumer price index’ measures the movement in the value of a set number of things—bread, milk, all the things we're all buying day in, day out. Now, for most of the companies I work with, salaries are set based on supply and demand for a set of skills. Not a set of groceries, but a set of skills, and that's the market you want to be tracking.

The reason you don't want to use CPI is that, say, CPI is really low, but salaries for a role are moving fast. AI engineers are the obvious example right now. If you're only handing out 1% increases, your salaries detach from the market you're actually trying to hire in. And the inverse is true too. Right now, AI aside, salaries for most roles are fairly stagnant while inflation is high. Do you want to pile more cost onto a company with a finite runway, where there's only so much money to deploy toward getting profitable? You don't want to overspend. That's the balance you're trying to strike. That doesn't mean you ignore CPI. You definitely need to think about high inflation environments. If it's hitting people's livelihoods and they're sitting at work worrying about whether they can afford to eat, there are ways to solve for that. But CPI itself shouldn't be what you budget off.

What you want to look at is your market data. Track the movement YoY or MoM, and see how the value the market places on a role has moved. Our ranges should move with it. Then you look at where people sit inside the range. We use a term called ‘compa-ratio’, which is someone's salary divided by the midpoint of their range. It tells you where they're placed. Companies will have a view on where they want people sitting. Typically, if you're new, you're below the midpoint, toward the bottom of the range. If you're really tenured or seasoned or a high performer, you're at the higher end, so your compa-ratio is above one.

That's how I go about the budgeting process. We know the market has moved by this much, but the thing people forget is that the same budget is doing three jobs at once. It's tracking the market, it's rewarding performance, and it's paying for promotions. Those last two are the ones that always get left out. Knowing roughly where your performance profile sits, and most companies have a bit of a bell curve, gives you a sense of what to budget for. Same with promotions. Assume how many people you expect to promote across the organization. In really high-growth companies, I often see something like 20% of the company getting promoted YoY. Work out what that number is for you and budget for it.

How do you handle it when the market spikes and then falls back?

There are two things to clarify there. Salaries growing slower isn't the same as salaries going backward. It's like inflation. If inflation is zero, it just means prices have stopped going up. It doesn't mean prices have reversed. That said, I do see some groups where salaries genuinely go backward YoY. Admin-type roles and junior roles are the hotspots I'm thinking of right now. But I rarely see that sustained across successive years with material decreases.

Where I have seen progressive YoY decreases in what the market pays for a role, my approach in the first year is usually not to acknowledge it. In most countries where I've done comp or worked in HR, it's effectively impossible to take money off someone's salary anyway. So you're never clawing it back. You might tell them the market has moved down for their role, and leave it there. But if the decline is sustained, then you start to think your ranges may need to come down. That raises the question of what you do with the people already sitting in them. You'll inevitably start making new offers at a lower rate, which is fine, but it's the people who've been in the role for a couple of years that you have to think about.

One option is to handle them the way we talked about with people above the band. Still offer them something, because in theory their value to you is increasing YoY anyway. They're building context on the company, building relationships, building a deeper understanding of how the organization works. They're contributing more value.

This is where replacement value comes in. If you replace someone who's been at the company 10 years with someone brand new off the street, you can't replace 10 years of institutional knowledge overnight. So the person with 10 years is invariably worth more to you. That's worth weighing when you're deciding where your offer rates start and whether that has knock-on effects for people already in the role. The other thing is that eventually they get promoted out of that role anyway, into a role with a different band, and it sorts itself out.

🔥 Reminder: I’ll be speaking at Matt’s event, the Startup People Summit next week. Grab your tickets here.

So is having people above the salary band just a necessary evil?

I'm also a big fan of not having that. It's increasingly relevant to the environment we're in, where everyone is building leaner, smaller organizations. Leaner means flatter, and flatter means less opportunity for career progression. So there are two solutions.

The first is taking the cap off your salary bands. Have a starting rate, and that's the bottom of your range. But why hold people back at the top? Every company I speak to says they want a high-performance workforce. Well then, pay for it. Pay like you're a high-performance workforce. If you've still got someone in the same role after five or six years, they should be crushing it. They should be so good at that role that their value keeps going up. You don't cap them just because you built a range that says so.

That's the other myth with compensation bands, and I grappled with it early in my career. You build this thing, and then you feel like you have to defend it, like you always have to color inside the lines.

The second solution, and this is increasingly common in almost every engineering and tech organization in the world, is that if someone wants to stay an individual contributor, you build a progression path that runs parallel to the management track. You can have a senior contributor who's the equivalent of a director or a VP, because they're so dominant in your product and your technology that they're having organization-wide impact anyway. They're probably setting direction for the product, doing quasi-CTO type stuff.

Location-based or location-agnostic pay, who wins?

I'm a bit of a fence-sitter here. It really depends on the organization, and I'm not a proponent of either. For example, if you're born in New York and you start a company there, should you have to pay the New York rate to someone you hire in Indonesia or Australia or anywhere else that costs less? I don't think that's necessarily fair. It's a bit of a handicap on companies that want to go out and employ people beyond their own region.

But equally, is it right to employ someone in a traditionally low-cost place and reinforce the low, constrained salaries they already have? I've hired people who asked for 15k USD as a salary, and I've seen what happens when a good salary structure lets you set the minimum we're prepared to pay anyone anywhere in the world is 30k or 50k. The impact that has on somebody is game-changing. It opens doors. They get more invested in the work, and they do it better. In that example, they could suddenly afford childcare and things like that, which gave them back time and headspace to do a great job at work.

That's why I land somewhere in the middle. The thing to acknowledge about geo-agnostic pay is that you still have to pick a place in the world to anchor to. If I use a New York salary and pay that to everyone I hire globally, how long does my runway last? Unless you're extremely well funded, not very long. And conversely, if you're paying bargain-basement bottom dollar, what kind of people is that actually going to get you? So it's one of those questions people have to answer for themselves. I don't think either extreme is right. There's a solution in the middle where you're cost-conscious and not paying San Francisco or New York rates to the whole world, but you're also not paying the lowest salary that happens to exist in a given place.

How should founders think about equity, and options versus RSUs?

First and foremost, don't grant options at all if you're not prepared to do everything needed to make them actually work. People give out options or RSUs because they want employees thinking like founders, invested in the long-term success of the business. But almost every company grants them and then tells nobody anything about them. You get an offer letter with a number on it. It might be a percentage; it might be a volume. It's rarely a value, unless they're RSUs.

Explaining what that number means matters. People need to understand what it's worth, how it's growing over time, and how the work they're doing connects to the outcome of the business. That's what actually creates the ownership mindset you're going for. Don't sink all that time into lawyers and accountants and build an equity program if you're not prepared to help people understand it on an ongoing basis.

On working out the right amount, it again comes down to country. But this is the one area where I'm more pro location-agnostic. Whether you're a software developer in India, Sydney, or San Francisco, if it's the same job at the same level, the impact you're having is arguably the same. You're creating the same opportunity for success in the business, so your slice of that success should be the same. Equity is trying to do something different from salary. Salary pays you to eat and put a roof over your head where you live. Equity isn't that.

Then on options versus RSUs, they function differently. The thing that gets misconstrued about options is that you're not actually giving anyone anything of value. You're giving them the chance to buy something with their own money. Yes, there's hopefully a gap between what they pay and what it's worth at the point of sale. But I often see options presented as, ‘Hey, we're giving you $100,000 worth of options.’ No. You're giving me the chance to buy $100,000 worth of shares, and I have to spend my own $100,000 to get it. That's another education problem.

On the RSU side, you're actually granting shares. You're handing them over. There's a tax liability, and there are all these knock-on impacts, which is another thing companies need to think about depending on which one they're offering. Neither is perfect. Both have pros and cons.

Tell me about Startup People Summit?

It's a one-day virtual conference about building people practices in scaling businesses. I created it because I'm in Australia, I've worked in startups and scale-ups for most of my career, and everywhere I looked, the conferences were tailored to enterprise organizations. They're dealing with a completely different type of problem. None of it had the startup and scale-up ingredients, where you're building something right for right now, knowing that in twelve months you'll probably redesign it because you're a different company by then. Very different environment, and typically very different budgets to solve it with.

So it's a big conference designed to show people what the more progressive operators in this space are actually doing, and to be a source of inspiration at a time when it's increasingly hard to know what the right path is. It's the playbook in event form, for anyone who doesn't already know how to build a great people function in a startup or a scale-up.

How do you get the best out of yourself?

There are probably three things that come to mind that have been important in getting the best out of myself. First and foremost, I'm a really big fan of the idea that you're the average of the people you surround yourself with. I've always been attracted to people who have done cool shit, and I've wanted to be near them, from a proximity perspective, and understand how it worked for them. There's just something infectious about that that drives you. The second thing I've learned about myself is that when I've got that first part right, I love what I'm working on, and I tend to work really intensely at it. What I've learned over the past three years of running my business is that I need to balance that with frequent periods of rest. I need to take a week off to recover from all the late nights and long weekends. Sometimes I just get obsessed with whatever I'm working on, which I love, and it's because I enjoy it, but I need to break it up by going away and sitting by the beach for a bit.

The third thing I feel like I've fine-tuned is my ability to refocus. We all know the psychology of setting ambitious goals, goals that feel almost out of reach, is incredibly compelling and very energizing. But coming back to that goal frequently is something I do well now that I certainly didn't earlier in my career. I've got a routine where I sit down and ask, what do I want to accomplish this year? Then I break that down by quarter. From there, I've got a monthly refocusing exercise and a weekly one. At the start of every week, I sit down to review what I am accomplishing and how it ties back to my goals. And daily, I literally have a sticky pad on my Mac with my top three for the day.

That's my system. Every month, I run a board meeting with my partner. How much money did I make? How much did I spend? How's my pipeline? Everything. And it all starts with what's my goal, how's the progress, what's going well, what's not. It's a simple routine, but it pulls me up out of the weeds of whatever I'm dealing with and gives me a reset back to what I'm trying to accomplish for the year. So far it's worked really well. It helps me pivot when things aren't working, and it gives me a sense of gratitude too. Day-to-day, it can be really hard to sit down and see what I actually accomplished. But every month at that board meeting, I get to see what I'm doing. And when you see a revenue number, or a client you've closed, it feels nice. Then you get on with it.

Extra reading

• How to talk about pay, benefits & your value at work - December, 2025

• Five signs that your market data is no longer right (and how to fix it) - May, 2026

• This 70/30 Rule Stops Your Best People From Leaving - January, 2026

And that’s it! You can also follow Matt on LinkedIn, and don’t forget to check out FNDN website while you’re at it.

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