A good idea about pay ought to fit on a page. If it takes a lawyer to explain, it will end up serving the people who can afford the lawyer. Here is the whole of FairShare.
It pays people in two ways. A salary pays for the level a person works at, which can be seen. A share of each year’s profit, divided by days worked, pays for being part of the company that made it, which is all that can honestly be said about who made it. The rest of the model decides who owns the company, where outside money comes from, and who sets the few numbers involved.
The rules
- Salary comes from a short ladder of bands. Each band is one fixed figure, with no range to negotiate. Every function in the company uses the same ladder. The lowest band is at least the local living wage, the top band pays at most three times the lowest, and the steps between are equal. (Chapter 8)
- Everyone earns one Future for each day worked. A Future is a claim on an equal slice of that year’s profit. A day of maintenance work earns the same Future as a day of engineering or a day of running the company. (Chapter 9)
- Each year’s profit is split by one sum. Net income, minus the share kept back for reinvestment, is the pool. The share kept back is called the reserve. The pool divided by that year’s Futures is what each Future pays. (Chapter 9)
- Payouts run for a year, whether or not the person stays. Half is paid on January 1 and the other half in monthly instalments through the following year. Leaving the company forfeits nothing already earned. (Chapter 9)
- Benefits and rollover work on what a dollar can become. The same dollar is worth more to someone who can afford to invest it. Benefits free up more of each person’s pay, and anyone may put a payout into a later year’s Futures at the price investors pay. (Chapter 10)
- A trust owns the company, and an elected council governs the trust. Each person has one vote. The council appoints the directors, sets the reserve percentage, the cap on purchased Futures, the bands and the benefits, and decides on any sale. (Chapter 11)
- Outside capital buys Futures, not shares. Investors buy a later year’s Futures at a discount, and the discount is their return. Every Future they hold makes everyone else’s slice smaller, so the council caps how many can be sold for any year, and the charter never lets them exceed half. Founders and early staff who work for less than their band have the shortfall logged and converted to Futures at the same price. (Chapter 12)
- A role is in the bands or it is not in the company. Anyone the company needs regularly is paid on the ladder. Contracted work that recurs is paid at the band it would hold inside the company, or better. (Chapter 13)
One year, worked through
The example company used throughout Part Two is a profitable software business with 250 people. To keep the arithmetic round, its working year is 200 days, its lowest band pays $50,000 and its highest pays $150,000. It ends 2027 with $30 million in net income. The council set the reserve at 30 percent before the year began, and an investor holds 2,500 of the year’s Futures, bought in 2025.
A person who worked all 200 days receives $80,000 for the year, in whichever band they sit: $40,000 on January 1, 2028 and $3,333 a month through December. The investor receives $1 million on the same schedule.
The two salaries differ by three times. Total pay differs by about 1.8 times, because the profit is shared equally and the salaries are not. The more profitable the year, the narrower the gap. In a year with no profit the Futures pay nothing, both people keep their salaries, and the gap is three times again.
| Step | Figure |
|---|---|
| Net income for 2027 | $30,000,000 |
| Reserve at 30 percent | $9,000,000 |
| Pool | $21,000,000 |
| Futures earned by 250 people over 200 days | 50,000 |
| Futures held by the investor | 2,500 |
| All 2027 Futures | 52,500 |
| Value of one Future | $400 |
| Band | Salary | Futures payout | Total pay |
|---|---|---|---|
| Lowest | $50,000 | $80,000 | $130,000 |
| Highest | $150,000 | $80,000 | $230,000 |
What the model does without
Much of the model is what it leaves out. There are no stock options, vesting cliffs or exercise prices. Salaries are not negotiated. Founders and executives have no bonus pool, and no band earns Futures faster than another. Nothing a person has earned is taken back when they leave.