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People

Going remote? Expect 'downward pressure on cash compensation'

WFH culture will be a reset moment for compensation, says one senior tech recruiter, who predicts pay cuts of up to 15%.

Golden Gate Bridge

"The whole play … is to get people out of the high-cost zones," said Stephen Sterett, managing partner at executive search firm Austin McGregor.

Photo: Joshua Sortino/Unsplash

When Mark Zuckerberg told Facebook employees that a significant proportion of them could work remotely, it sounded like the start of a liberation for a tech industry tied to Silicon Valley. Then he said salaries would be adjusted for cost-of-living — and the reality of those changes started to become clear.

"The whole play … is to get people out of the high-cost zones," said Stephen Sterett, managing partner at executive search firm Austin McGregor. Sterett, who focuses on filling senior roles at tech startups, told Protocol that he thinks employees leaving the Bay Area should expect significant salary cuts, while tech workers in the rest of the country may soon find that far more opportunities are open to them.

A VP of marketing at a growth-stage tech company would make around $225,000 in the Bay Area, Sterett said. That same role could be filled in Austin, Chicago or Atlanta for 8% to 15% less, he thinks. And it's not just salaries that take a hit: People outside the Bay Area "aren't as savvy when it comes to equity," Sterett said, and so they ask for less. While a marketing VP might get 1% to 2% equity participation in the Bay Area, Sterett said, that would be more like 0.5% to 1% in other parts of the U.S.

Some tech companies have already started to hire remotely. "A plethora of [Bay Area] clients of mine … have already made plans to move," Sterett said. "And they're hiring a ton of remote workers."

Sterett now thinks "there is going to be some downward pressure on cash compensation, for sure, on the West Coast." Bay Area engineers may find they have little option but to accept that: If they go out into the market, "they're going to find that the compensation at other places is going to be adjusted downward as well." Soaring unemployment won't help matters, either, as it tends to push salaries down.

Some jobs could leave the country altogether. Sterett said there was already a trend for companies offshoring certain product development and engineering roles, and the pandemic will lead to that happening "at an accelerated rate."

Still, one thing that isn't set to change, according to Sterett, is the pay gap between Big Tech companies like Facebook and Google, and everyone else. "They overpay because they want to get the best talent," he says. "That's just what they do, they buy people."

People

Making the economy work for Black entrepreneurs

Funding for Black-owned startups needs to grow. That's just the start.

"There is no quick fix to close the racial wealth and opportunity gaps, but there are many ways companies can help," said Mastercard's Michael Froman.

Photo: DigitalVision/Getty Images

Michael Froman is the vice chairman and president of Strategic Growth for Mastercard.

When Tanya Van Court's daughter shared her 9th birthday wish list — a bike and an investment account — Tanya had a moment of inspiration. She wondered whether helping more kids get excited about saving for goals and learning simple financial principles could help them build a pathway to financial security. With a goal of reaching every kid in America, she founded Goalsetter, a savings and financial literacy app for kids. Last month, Tanya brought in backers including NBA stars Kevin Durant and Chris Paul, raising $3.9 million in seed funding.

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Michael Froman
Michael Froman serves as vice chairman and president, Strategic Growth for Mastercard. He and his team drive inclusive growth efforts and partner across public and private sectors to address major societal and economic issues. From 2013 to 2017, Mike served as the U.S. trade representative, President Barack Obama’s principal adviser and negotiator on international trade and investment issues. He is a distinguished fellow of the Council on Foreign Relations and a member of the board of directors of The Walt Disney Company.
Sponsored Content

Building better relationships in the age of all-remote work

How Stripe, Xero and ModSquad work with external partners and customers in Slack channels to build stronger, lasting relationships.

Image: Original by Damian Zaleski

Every business leader knows you can learn the most about your customers and partners by meeting them face-to-face. But in the wake of Covid-19, the kinds of conversations that were taking place over coffee, meals and in company halls are now relegated to video conferences—which can be less effective for nurturing relationships—and email.

Email inboxes, with hard-to-search threads and siloed messages, not only slow down communication but are also an easy target for scammers. Earlier this year, Google reported more than 18 million daily malware and phishing emails related to Covid-19 scams in just one week and more than 240 million daily spam messages.

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People

Citizen’s plan to keep people safe (and beat COVID-19) with an app

Citizen CEO Andrew Frame talks privacy, safety, coronavirus and the future of the neighborhood watch.

Citizen added COVID-19 tracking to its app over the summer — but its bigger plans got derailed.

Photo: Citizen

Citizen is an app built on the idea that transparency is a good thing. It's the place users — more than 7 million of them, in 28 cities with many more to come soon — can find out when there's a crime, a protest or an incident of any kind nearby. (Just yesterday, it alerted me, along with 17,900 residents of Washington, D.C., that it was about to get very windy. It did indeed get windy.) Users can stream or upload video of what's going on, locals can chat about the latest incidents and everyone's a little safer at the end of the day knowing what's happening in their city.

At least, that's how CEO Andrew Frame sees it. Critics of Citizen say the app is creating hordes of voyeurs, incentivizing people to run into dangerous situations just to grab a video, and encouraging racial profiling and other problematic behaviors all under the guise of whatever "safety" means. They say the app promotes paranoia, alerting users to things that they don't actually need to know about. (That the app was originally called "Vigilante" doesn't help its case.)

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Transforming 2021

Blockchain, QR codes and your phone: the race to build vaccine passports

Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.

Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

People

Anjali Sud is reinventing Vimeo and the future of video

It's not a YouTube competitor anymore. It's something much bigger.

Anjali Sud has been CEO of Vimeo since 2017, and has totally changed the company in that time.

Photo: Vimeo

Anjali Sud's first day as Vimeo CEO was an eventful one. Not only was she standing in front of the company as its new leader, she was telling them that things were about to change. A lot. After more than a decade operating as a home for streaming content — sometimes a YouTube competitor, other times coming for Netflix, never quite reaching either goal — Vimeo was going to become a SaaS company. It would be wooing IT managers and vice presidents, not A-list directors and Golden Globes voters. Even after the initial shock wore off, she knew it would take a while to change the structures, incentives, goals and workflows to become a different kind of company.

That was 2017. Now it's early 2021, and Vimeo is on a tear. Sud and her team are getting ready to spin out of Barry Diller's IAC later this year, turning Vimeo into a public company in its own right. They've raised $450 million in capital ahead of that change, and are currently valued at about $5.7 billion. Vimeo has more than 200 million users, 1.5 million of whom pay for its services. Its revenue increased 54% in the most recent quarter compared to a year ago, and by some measures the company is already profitable.

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

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