Total rewards
Total Rewards Strategy
Our goal is to have a total rewards strategy that enables us to achieve the following:
Attract our ideal candidates (best cultural fit and the best fit for the role).
Align with local market compensation by paying similar compensation to comparably sized organizations in each local market.
Support growth and retention by adopting a longer term view of reward and recognition.
Total Rewards principles
At Mattermost, decisions on compensation are guided by these three principles:
Data driven (pay decisions based on external and internal benchmarks).
Consistency (pay decisions guided by defined compensation frameworks to drive pay equity).
Clarity (decisions that clearly align with our total rewards strategy).
To learn more about how the total rewards guiding principles drive equitable and consistent compensation decisions, as well as how we approach compensation, please refer to the resources listed below:
Video: Our approach to compensation: Video Link; Passcode
Slides: Our approach to compensation: Link
How we determine compensation
We adopt a total rewards approach to compensation, so our package includes a mix of extrinsic and intrinsic rewards to enable each and every staff member to have the best work of their careers at Mattermost. The components of our total rewards package include base salary, performance pay, benefits, work-life programs, and a work environment that supports growth and development.
To ensure that salaries are consistent, equitable and competitive, our compensation system defines salary ranges (minimum and maximum salaries) for the purpose of administering compensation. The salary ranges are based on the following factors:
Role and level
Cost of labor (local market compensation)
Experience within level
Role and level
Our compensation system aims to position salary for each role and level, at or around the median of Mattermost’s labor market, which comprises companies in the technology industry that are similar in terms of size and growth stage.
Local market compensation
We pay competitive local market rates. This means that our compensation system targets pay at or around the median salaries of comparable organizations in the local market.
To ensure a thorough understanding of the global labour market, we analyzed multiple data sources to establish differentials in the cost of labour and cost of living across 12,000 cities in 139 countries in order to create a zone approach versus a unique geo approach where compensation is differentiated by city. The zone approach enables us to group locations with similar cost of labour and cost of living into the same pay zone with a shared compensation range, thereby enhancing our ability to offer equitable and competitive compensation across our staff locations.
Experience within level
Each salary range is broken into four quarters, representing different competency levels i.e. new to role, learning, mastering or teaching. A staff member’s pay level within the salary range i.e. quarter-placement, will vary depending on the career stage, and will generally follow the following guidelines:
New to role (partially meets expectations)
This is the lowest quarter of the salary range (up to 25% range penetration). This portion of the range applies to staff members that are new to the job and/or field, have little or no direct, related prior experience, and are still building the skills, knowledge, and ability to handle job responsibilities. The staff member at this point is not yet performing the full scope of the job requirements.
Learning (generally meets expectations)
This is the second quarter of the salary range (25% to 50% range penetration). This portion of the range applies to staff members that are deep into the learning curve for the role and performing job responsibilities effectively. The staff member at this point possesses all of the base knowledge and skill requirements, but may still be learning some aspects of the job or developing expertise.
Mastering (fully functioning and often exceeds expectations)
This is the third quarter of the salary range (50% to 75% range penetration). This portion of the range applies to staff members that are exhibiting the core competencies of the position, performing all tasks effectively and independently, and often exceeding expectations.
Teaching (consistently exceeds expectations)
This is the highest quarter of the salary range (75% to 100% range penetration). This portion of the range applies to staff members with unique talent and extensive experience. The staff is a subject matter expert with a depth of knowledge that extends beyond primary responsibilities. Ready for promotion to the next level when the opportunity arises.
Frequently asked questions
What if my candidate's current compensation and/or expected compensation is materially higher than the recommendation from our Total Rewards System?
Our compensation benchmarks are based on a deep analysis of multiple market data sources and reflect a competitive offering for our size, stage (development stage, funding round/amount), and industry. If a candidate's current compensation expectations materially exceed the range, the candidate may not be a fit for the company.
What if I disagree with the compensation recommendation from our Total Rewards System?
Any disagreement should be resolved within approximately 3 business days. If you disagree with our Total Rewards approach and the answers within this frequently asked questions page, please work with your MLT leader to share your viewpoint in writing with our Total Rewards Manager including, a) whether you disagree with one or more of our principles (being data driven, being consistent, and/or clearly aligning decisions with our model), b) list any data points you feel should be considered, c) share any other context on the disagreement.
If the disagreement can’t be resolved in approximately one business day with our Total Rewards Manager, please escalate to our Head of HR with your point of view in writing, followed by a meeting with you, our Total Rewards Manager and our Head of HR.
If the disagreement with our Head of HR cannot be resolved in 1 business day, please escalate to our CEO with your point of view in writing, which will be followed by a conversation with you and our HR leader and CEO will make the final decision.
How do we know if our Total Rewards Strategy is correct?
Aesthetically our Total Rewards Strategy should be at market rates for similar roles, levels and caliber at similar companies and similar local markets. In sampling compensation ranges we should see about half the sample at or below our range, and half the sample above our range.
I know of a company that pays more for the same role in the same city; can we change our Total Rewards Strategy to match that data point?
No. We expect to pay market rates. For the same type of role, level and geography in a similar type of company we expect half the market to be paying at or below our compensation bands and the other half above our compensation bands. To change our Total Rewards calibration we would need to see a balanced sample of data points and incorporate the data with the multiple compensation survey data sources we subscribe to.
How does our Total Rewards system account for inflation?
We account for inflation through analysis of changes in local market compensation by role and level. We use local market compensation as a benchmark incorporating the other inflationary benchmarks (energy, housing, etc.) impacting our staff members. In recommending a compensation change, the total rewards system considers external competitiveness, i.e. local market rates for similar roles at comparably sized organizations; market salary movements, i.e. salary increases at similar companies; internal pay equity; individual performance; and the staff member’s experience within the grade level, i.e. whether they are at the beginning of the learning curve or at the expert level for the role.
How frequently should a staff member’s compensation be reviewed?
Compensation reviews occur once a year as part of the end of year review cycle or as part of the mid-year review cycle if the criteria for cycle 1 reviews are met. There are instances where a manager may want to request for off-cycle compensation reviews, e.g. due to an unforeseen issue or due to a gap in planning. Off-cycle review requests are exceptions and would ideally only occur to address an urgent business need that cannot wait until the next performance review cycle. When an off-cycle review is requested, the HR team, CEO and company co-founders review the cause of the change and may conduct a post-mortem discussion and next actions to avoid off-cycle exceptions in future and present a summary to the compensation committee at the next Mattermost Board meeting in the context of pay equity governance during its closed session.
Why do we differentiate compensation based on location?
Alignment to local market compensation is a part of our total rewards philosophy as it allows the company to offer compensation that is competitive in each market. As an illustration, if Mattermost had office locations in different countries, then it would be reasonable to expect that the staff members in each location are paid similar salaries as other comparable employers in that location. Local market compensation also enables the company to offer an equitable standard of living for all staff. For example, if a staff member in California was paid the same salary as a staff member in Spain, the staff in California may fall under a lower standard of living bracket, while the staff member in Spain may fall under a higher standard of living bracket, relative to their respective local markets and the corresponding prices of goods and services.
What’s the right way to think about our Total Rewards system in meeting my managerial goals?
Total Rewards is taking an integrated view of a staff member’s conceptual and concrete benefits. In working with the Total Rewards team, managers should have a “Total Rewards view” from their direct report’s perspective on the overall benefits of working in their role at Mattermost versus at other organizations.
Conceptual benefits are about impact (the ability to make a difference, to influence decisions, to change the trajectory of our business and results), growth (the ability to learn, master and teach, to take on a broader scope, to learn from colleagues and rotate responsibilities), and connection (building lifelong relationships inside and outside the company in the context of our work and mission).
Concrete benefits include short term compensation (cash compensation, GTM variable bonuses, special recognition bonuses), long term compensation (company equity), benefits (including health insurance and other benefits or subsidies depending on region or country), and “something special” (training, development experiences, mentorship, etc.)
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