The CEO of a $3 billion startup shared his salary with everyone in the company - here's why
Courtesy of Marc Lore
- Marc Lore is the president and CEO of Walmart eCommerce in the US. He sold his startup, Jet.com, to Walmart for ~ $3 billion in 2016.
- At Jet, Lore made his salary - and everyone else's - public in order to foster "radical transparency."
- While more companies are implementing pay transparency, it may not be the right move for every organization.
In the early days of Jet - the e-commerce startup that was bought by Walmart in 2016 for $3 billion - everyone knew each other's salaries.
That included the salary of the company's CEO, Marc Lore, who is now the president and CEO of Walmart eCommerce in the US.
On an episode of Business Insider's podcast, "Success! How I Did It," Lore told US editor-in-chief Alyson Shontell that the decision to disclose pay data reflected one of the company's core values: transparency.
"I thought that was really important that there wasn't any sort of weird unconscious bias happening, that everybody at the same level got the same amount," Lore told Shontell, specifically mentioning the gender pay gap. What's more, Lore said that pay transparency effectively eliminated salary negotiations during the hiring process. Here's Lore:
"When we hired somebody from the outside, we would basically size that person up and everyone would interview them and say, 'Yep, director.'
"And then we'd go back and say, 'OK, everyone thinks you're a director, go on LinkedIn, check out the other directors, we really feel like you'll feel like you're a director. Here's what you make.' And people would say afterward, like, 'I just really appreciated not having to negotiate, knowing that it was fair.'"
In a previous interview with Shontell, Lore explained the company's ten levels of salaries and titles, which determined salary and stock option grants. Every employee was assigned to a level based on work experience. The only way to earn more, Lore told Shontell, was to get promoted to the next level.
Pay transparency may not be the right move for every organization
Jet wasn't the only company to disclose salary information.
Since 1986, Whole Foods has allowed employees to look up the salaries of other employees. More recently, social-media company Buffer and analytics startup SumAll joined their ranks. In Buffer's case, you don't even have to work at the company to find out what individual employees earn - salaries are posted on Buffer's public blog.
Web-services firm GoDaddy has found something of a middle ground between pay transparency and confidentiality: It lets employees see the salary range for their level.
It's unclear that complete salary transparency is the right move for every organization (which Lore acknowledged).
Business Insider previously spoke to Elena Belogolovsky, an assistant professor of human resource studies at Cornell University, who said that you don't have to disclose salary information for every employee, but you need to give people concrete information about how they can earn more.
Company size may also play a role in how feasible it is to disclose salary information. In the interview for the "Success!" podcast, Lore said that at Walmart - a company with more than two million employees - he can't have salary transparency.
- RBI’s G-SAP 1.0 is certainly a much needed demand lever to support the government borrowing programme
- Elon Musk-owned internet service Starlink’s India entry under scrutiny of DoT, report suggests
- Air conditioner and cooling brand Voltas India eyes double digit growth this summer
- Gautam Adani and Mukesh Ambani cumulatively lost nearly $7 billion as the markets plunged
- Dr. Reddy’s, TCS, Bandhan Bank and other stocks to watch out for on April 13