Whether you’re a founder or CEO thinking on behalf of the company or an individual wondering about your own compensation, by this time of the year, salary increases have probably crossed your mind. And for good reason. There’s a lot of movement in the private capital market. The way companies are hiring is very different from what it was in 2021 and 2022 (the lemon years) and executives are thinking about who is essential to the business and how to incentivize them to stay. And, let’s be honest, when someone is paid competitively and happy with their comp, they stop thinking about their paycheck and focus more on their work.
So, here are three questions to keep in mind as you begin planning for 2027 salary or merit increases for your key employees.
- How competitive is their compensation today?
Ideally, using Thelander private company compensation data, benchmark the job title against the market. It is also a good idea to customize the data by the total amount of financing since earlier stage companies can be more robust with equity and later stage companies tend to be more robust with cash.
2. How important is the role to your organization?
If the role and employee are valuable, use the 75th percentile (or max if appropriate) to see how the market is paying and where the individual stands. How much of a raise someone gets depends on how competitive their compensation is to begin with. If you cannot afford to lose a key employee and they are not easily replaceable, it is worth paying to the higher percentiles. Market data gives you the benchmark. You decide how to use it.
3. Now you have the data. How well is the individual performing?
The holy salary increase trinity: Market position, value & importance of the role to the organization and performance. Someone performing exceptionally well warrants a larger increase than someone whose performance is mid – even if they have the same title.
Before you build your 2027 compensation plan, know where you stand.
Participate in the no-cost Thelander Private Company Compensation Survey and get all the market data you need to make informed compensation decisions. You’ll secure free access to real-time benchmark data for every job title you contribute. The more you give, the more you get. No charge, no guessing.