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A CEO’s unusual salary proposal to a prospective CTO has sparked debate online after he revealed an email from 2022 offering the candidate half his desired pay initially, with raises tied to the company hitting specific revenue targets.
Tyler Denk, co-founder and CEO of Beehiiv, recently revisited the hiring decision in a post on X, sharing the email he had sent to a prospective CTO when the company was still in its early stages.
According to Denk, the startup did not have enough money at the time to afford the compensation the candidate was seeking, prompting him to come up with an alternative arrangement.
“In 2022, we didn’t have the money to hire the best person for the CTO role,” Denk wrote while explaining the thinking behind the proposal.
He said he suggested paying the candidate significantly less initially while creating a path that would eventually allow him to reach his preferred compensation.
The email, titled “Compensation proposal”, began with Denk acknowledging that the candidate deserved to be paid what he had asked for. However, he explained that offering the full amount immediately could put the young company under financial pressure.
“I want to pay you exactly what you want, you deserve it. But it would bankrupt the company which isn’t good for you or us. So what if we started you off at half of that?” the email stated.
Denk then proposed tying salary increases to the company’s monthly revenue. Under the arrangement, the employee would receive a raise once the company reached $100,000 in monthly revenue, another increase at $150,000, and a final bump at $200,000. The final milestone was intended to bring the employee to his preferred compensation.
Denk estimated that the company could reach those targets within 10 to 14 months based on its growth rate. He also pointed out that the prospective CTO would receive shares in the company, along with additional equity to reflect the risk involved in joining the startup at an early stage.
The proposal was ultimately accepted. In a follow-up comment, Denk revealed that the employee, identified as Noah, went on to become a key part of the company’s growth. “Update: he accepted > we crushed those goals > Noah has been a tremendous CTO and is currently leading a team of ~50 engineers,” he wrote.
The CEO also said he had previously written about the unconventional decisions the company had to make during its early days, adding further context to the hiring arrangement.
The post has since attracted considerable attention, with users debating whether the compensation structure was a smart way to manage a startup’s limited finances or placed too much risk on the employee.
“Was there any incentive for him to defer the pay? In other words, he never got “compensated” for deferring his full pay,” said one user.
Another user questioned the seniority of the position at such an early-stage company, writing, “A CTO for a company that small seems nuts man. Glad to hear it worked out though.”
Some users focused on whether the candidate should have received a greater upside for accepting the reduced salary and associated risk. One comment read, “This is a great move, Tyler! However, since he took a half pay and agreed to accept the risk, wouldn’t it be reasonable to set the final target higher than the requested compensation?”
Another user took a more sarcastic view of the arrangement, writing, ““Work hard, and if the company is also lucky, we’ll match your ask today in over a year’s time when salaries and your ask will have most likely gone up in the same timeframe. Until then, you’ll be on half-pay and still have all the responsibilities.” What an offer!”
A fifth user compared the proposal to everyday financial commitments, commenting, “Guess I’ll just tell my landlord to halve my rent until my startup starts making enough money, i’m sure he’ll understand.”
Disclaimer: This article is based on user-generated content. The claims made in the original post have not been independently verified by News18.
