By Jim Wong, CPA | December 20, 2013

A company’s financials are generally a closely kept secret. But what about salary information? Would you publicly reveal what you pay your employees? What about what you pay yourself?

Well, one company has done just that. Buffer is a social media start-up, and a pretty successful one at that. Launched in November, 2010 it gained over a million users in just under three years.

According to a recent article in Business Insider, Buffer’s CEO Joel Gascoigne revealed all in a post on the company’s aptly named ‘Open Blog’. He shared the salaries of every single Buffer employee – including his own – and also included the exact formula the company uses to calculate their payment hierarchy.

The formula looks like this:
Salary = Job Type x Seniority x Experience + Location (+ $10K if Salary Choice)

Let’s break it down, using Gascoigne’s (executive level) salary:

Job Type = Base In Gascoigne’s case, his base level salary is $75,000
Seniority = Base Multiplier At the senior level, this works out to + 5% base and 3k/$m revenue
Experience = Multiplier Interestingly enough, he didn’t give himself ‘Master: 1.3X’, but the next level down, ‘Advanced: 1.2X’
Location = Additional Buffer has a sliding scale of location top-ups, depending on where employees reside. Gascoigne lives in San Francisco, right at the top! A: +$22K (e.g. San Francisco, Hong Kong, Sydney, London, Paris, New York).
Equity/Salary Choice To finish, Buffer’s staff members can choose between more equity, or more cash. If you choose the cash, your pay goes up by +10K.

His salary calculations, right there for all the world to see, are as follows: Joel (CEO)= $158,800 (75k Executive Officer base + 20%, + 12k/$m revenue, 1.2X, +22k,)

Gascoigne writes in the piece, “One of the highest values we have at Buffer is Transparency. We do quite a number of things internally and externally in line with this value. Transparency breeds trust, and that’s one of the key reasons for us to place such a high importance on it.”

While Buffer’s core company culture is one of transparency and fairness, this strategy can be a dangerous one. Companies traditionally tended to keep salaries a secret to ward off potential jealousy issues or unhealthy competitiveness, “Why does she make more, when I work harder?”

That said, when you have a formula as clear and concise as Buffer does, it allows employees to factually break down why they earn what they do. And it can also inspire them to strive to reach ‘that next level’, in order to rise in the salary ranks.

Brilliant has just released our 2014 Greater Chicago Accounting and Finance Salary Survey, and while it’s not quite as mathematically mapped out as the formula above is, it will help you determine where you lie on the salary scale, or, as a corporation, how your remuneration packages hold up to your peers. Simply click the link above for your copy.

Now, what do you think about having a corporate salary transparency policy? Would it benefit you and your organization to share such information with your staff? We would love your feedback.

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