March 17, 2026
Adapted from a Thelander “Comp 101” session with Jodie Thelander and Morgan Thelander (J. Thelander Consulting) and Bill of Octane OC, an accelerator that helps companies establish compensation guidelines as incentives to drive growth.
For a first-time founder, compensation is easy to get wrong and expensive to fix. This session walked through the fundamentals — the levers, the equity buckets, the option pool, and, above all, why having a compensation philosophy from the start beats negotiating with every new hire.
Know Your Compensation Levers
Cash compensation for private companies breaks into base salary and bonus — both the current bonus actually received and the target bonus on the horizon, tracked as dollars and as a percentage of base — which together make total cash (though total cash is often just base pay, since not every company runs a bonus program). Equity comes in three buckets: founder shares (for the person who started the company), additional founder equity (granted for the role a founder continues to fill, like CEO or CMO), and non-founder equity (for hires brought in from outside). Keeping these straight is the foundation of everything else.
Benchmark by Total Financing Raised
The single most important lens for reading compensation data is total financing raised — nothing has a bigger impact on cash and equity. Revenue can matter for cash at a revenue-generating company (and boards sometimes want it), but for equity the total-financing view is far more consistent, especially for early-stage and medtech companies that aren’t yet in commercialization. Non-founder equity, notably, tends to hover around 5% even as financing grows, while founder equity dilutes.
Have a Compensation Philosophy — Expressed as Ranges
The strongest recommendation of the session: establish a compensation philosophy before you’re negotiating with every new employee, which breeds inequality and inconsistency. A good philosophy recognizes that compensation isn’t the same for every role — it reflects the role’s value to the company, the contribution, and the individual’s career stage (a senior hire might come in at the 75th percentile on cash and equity; a junior hire with growth runway at the 50th on cash and 25th on equity). Crucially, a philosophy is a range, not a single number — a salary range and an incentive range — which gives you rails to place people by tenure and experience without renegotiating everything, and helps in working with the board.
When to Formalize
It is never too early. Three employees may not need formal ranges, but by the time headcount approaches eight to ten and things get more complex — beyond that first wave of hires — you need structure in place. Even earlier, the moment you’re a founder bringing on any employee, ask yourself the key questions: what are your priorities, and which levers will you use? The advice is to lean on base salary alone for as long as you can, because bonuses and milestones are tricky, annual, and never guaranteed.
The Option Pool and the Refresh Question
The employee option pool is the number to watch — it stays remarkably stable at roughly 10–16% across financing stages, even as founders dilute and investors own more. That pool must be allocated not just for today but for future annual refresh grants and new hires. On the perennial “when/who/how much do you refresh” question, the honest answer is: it depends — largely on how well you sized the initial grants. And a hard truth as a company scales to 50 or 75 employees: you can’t refresh everyone with equity, so cash becomes an essential lever, since the option pool becomes too dear to spread everywhere.
The Longer Road to Liquidity Changes the Math
Early employees are typically weighted toward equity over cash, but that only lasts so long — and with liquidity taking longer and mega-rounds replacing smaller crossover rounds, savvy hires (like a chief medical officer) now push for both high cash and high equity, forcing leadership to decide who’s worth it. A cautionary example: a founder CEO whose company jumped from ~$15M raised to $90–120M watched investors “take their pound of flesh,” then backed down on his own equity “for the greater good” of the team — a genuine gesture that left him playing an uphill game of catch-up. The guidance: plan ahead, because letting your number-one take a backseat rarely just works itself out, and closing too wide a gap later is very hard.
Board Comp and Pay Plans Below the Executive Level
Outside (non-investor) board members can be compensated with a mix of one-time equity, annual equity, one-time cash, and annual cash — with vesting sometimes set short (e.g., two years) to match a finite, purpose-driven tenure. Investor board members don’t get additional equity. Below the executive level, from director down, companies should put in pay plans with ranges for job leveling — Thelander’s sample plans split roles into administrative (sales, marketing, HR, finance), scientific, and technical tracks. Ranges are meant as broad relationships (still checked against specific titles and percentiles), and they absorb noise like shifting geographic hot spots — because there’s no single premium location; it comes down to how desirable the role is and the competition for talent. As the panel closed: talent is talent, and you pay top dollar for top talent.
This article is adapted from a Thelander “Comp 101” session and is intended as general educational information, not legal, tax, or financial advice. For guidance specific to your company, consult qualified compensation and legal advisors.