[Incubation] Salary Caps for Workstream Leaders
Jan 16, 2023

Summary


This proposal suggests capping the salaries for all workstream leaders at ShapeShiftDAO at $120,000 per year in USDC, plus time-locked FOX payments.

Abstract


The purpose of this proposal is to put a cap on the salaries of our workstream leaders at ShapeShiftDAO. We're suggesting a cap of $120,000 a year in USDC, and giving them monthly supplemental payments in the form of time-locked FOX tokens. These supplemental payments will be locked for one year before they can be used. The idea behind this is to make sure we're being smart with our treasury and making sure our workstream leaders are motivated to work towards the long-term success of ShapeShiftDAO.

Motivation


Workstream leaders have positions of authority at ShapeShiftDAO, so it's important to be sure that our workstream leaders always have the best interests of the organization at heart. However, some of our workstream leaders are taking salaries that are way too high, especially considering our current finances and the bear market. As a result, some leaders are choosing to cut contributors instead of lowering their own excessively high salaries. @seven7hwave, the tokenomics workstream leader, and @Giantkin, the moderation workstream leader went above and beyond and are showing great ownership by taking most or all of their salary in time-locked FOX. It's important to remember that the market rate for workstream leader salaries doesn't really apply at a DAO. ShapeShiftDAO is owned by FOX holders, and it's our responsibility to make sure the organization is successful. If workstream leaders are serious about cutting costs then it's important that our workstream leaders demonstrate ownership and set an example by cutting their own high salaries before suggesting any other payroll cuts. Plus, many of our workstream leaders used to work at centralized ShapeShift, and the proposed salary cap is more in line with what they made there than their current salaries.

Specification


  • The proposed USDC salary cap for all workstream leaders is $120,000 per year. 
  • The cap will take effect immediately and will overwrite any existing budgets. 
  • All workstream leaders may receive monthly time-locked FOX payments that will each unlock after one year. 
  • Time-locked FOX payments will not be boosted.
  • Workstream leaders may not take any separate position on payroll at ShapeShiftDAO.


Benefits


  • The proposed salary cap makes sure our workstream leaders aren't plundering the organization's treasury.
  • The time-locked FOX bonuses will make sure our workstream leaders are always working towards the long-term success of ShapeShiftDAO.
  • Assuming the operations budget is approved and the upcoming engineering budget does not change the workstream leader salary in USDC, this proposal would save the DAO 19,500 USDC per month.


Drawbacks


Some workstream leaders may be unhappy with the cap and may choose to leave the organization.
There may be a small delay in electing new workstream leaders to fill any vacancies.


Poll
Total Votes: 59
·
Voting Closed
Yes - cap the salaries for workstream leaders at 120,000 USDC per year, plus time-locked FOX
35.59% (21)
Yes with Changes - introduce a different salary cap
18.64% (11)
No - let workstream leader salaries remain uncapped
45.76% (27)
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Neverwas
NeverwasJan 16, 2023

@concernedfox43 Thank you for your thoughts and post, on a very difficult topic. I understand as you outlined the possibility to introduce the time locked fox to the salaries as added incentive and compensation and this is an approached I have touched on similarly in the past.
https://forum.shapeshift.com/thread/40720/
I was under the assumption (perhaps incorrectly) that this was impart the role of the stabler accounts. Those former FOX employees who were willing to bootstrap the DAO initially with talent and experience were offered the streams as incentive to continue on, help with the uncertainty and a few other things. I have heard from some contributors that it was possibly compensation for past efforts at the former company as well so as stated it could be convoluted. Thanks again for your willingness to lend thought to difficult discussions.

joshuAF
joshuAFJan 17, 2023

I do not agree with this proposal. I think we need to be competitive with our pay. Each workstream leader at ShapeShift DAO is a well-qualified professional and has the option of getting a high-paying job with a centralized company. Each could be hired pretty quickly. At these companies, they would be paid in cash and have equity incentives and good benefits. That is the DAO's competition for talent.

5
0xApotheosis
0xApotheosisJan 17, 2023

I, too, disagree with this idea. Setting an artificial limit could cause us to lose our best talent.

We need to pay people for the value that they bring to the DAO - the amount is irrelevant. For example, if someone is adding $300,000 of value to the DAO, we should have no issue paying them $250,000. Indeed, we'd want to hire as many of those individuals as possible.

5
Neverwas
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NeverwasJan 18, 2023

I would like to dive into this a little more for the sake of the thread. (Devils Advocate)

"We need to be competitive with our pay."
This is an easy statement to make but what is competitive? In a bear market and down economy where countless traditional and other org's are shedding presumably unnecessary deemed talent and professionals what is that value? This by all means isn't a static number with numerous factors as to need, capability, individuals determined need, cultural fit, etc. But with that said I would argue that not many centralized companies are signing people on as your statement would suggest and therefore market demand would work to deflate said values.

Another piece of this that seems to be overlooked, is how the DAO currently operates. I have heard people say it is like a startup or as self entrepreneurs, but I would say it is more in line with expectations of a traditional organization. Startups and entrepreneurs as contributors go in with little upfront immediate useable compensation, looking to build something for future gains. In startups upper management (executives) frequently take no or little wages up front for other incentives, lower roles are also incentivized as a means to build capital flow during times of building. This is a gamble and risk/reward system. Entrepreneurs are similar as it is their stake, they are not there to drain the limited resources that provide the ability to continue to build or grow the future profits they intend to make as a business, this sometimes means forgoing benefits in the beginning, periods of no compensation at all and many other things.

"That is the DAO's competition for talent"
Are we so sure on that? In a globally capable organization, limits on localized talent and compensation models are self imposed. Individuals who desire to be outside those traditional systems are not going to be running back to them. Those comfortable in those traditional systems are not going to be in a rush to change if not deemed relevant to their circumstances. If the lure of compensation is the only means then we have already lost, because you now have a hired mercenary (a person primarily concerned with making money at the expense of ethics) toxicity beware!

One last point, send in the tomatoes.
"Each workstream leader at ShapeShift DAO is a well-qualified professional and has the option of getting a high-paying job with a centralized company."
Transfer of talent, skills, or experience isn't as simple as lead to believe. Someone who has had only mid or lower level management experience and then takes a "leadership" role in an experimental or new organization (DAO) from which it was derived from and they had a high level of familiarity with, for a short period of time doesn't translate to a traditional organization leadership or executive role. The conflation that traditional organizations in hard economic times are going to pay top dollar for limited experience and skill for a comparable/non-comparable role is false. These roles are highly competitive and built on networks not easily available to those unfamiliar or switching defined industry norms.

As to this proposal discussion, while it can be a temporary solution to put a cap on salaries, in a particular set of circumstances or time of need, this would need to be a temporary solution as deemed relevant and I believe larger conversations need to be had in the community moving forward.

Neverwas
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NeverwasJan 18, 2023

0xApotheosis0xApotheosis
For example, if someone is adding $300,000 of value to the DAO
 
Great point, how has that value been determined? Has the DAO made $300,000 and can that be attributed to a single individual? Are these values based on other organizations historical perspective or regional averages of traditional compensation or DAO's? How is that value determined and measured in the DAO? Is it based on ROI or unique needs, skills, cultural fit, ethos? If it is just based on the demand to keep hired talent and compensation alone that is determined by the individuals asking for any such desired payment, I would go back to the point about mercenaries.

I would also state that up until this point the DAO has voted in leaders and the associated values, this is great in theory but in practice a small percentage of holders determine this value for the whole DAO and have the capability to exert such choices, even more so when such members tend to group think and rarely oppose each other.

Lastly best talent is subjective, and shouldn't ever be static.

0xdef1cafe
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0xdef1cafeJan 18, 2023

I understand the intent of this proposal but disagree with it.

Firstly, to @0xApotheosis point, this incorrectly conflates price and value.

Secondly, price controls distort markets. Show me an example where price controls have had a positive impact on a market. I'll wait.

Thirdly, the risk to talent retention is real. I cannot live off $120k. If this were passed, I don't have a choice but to leave. This isn't a threat, just a simple reality.

Comp structure is an individuals choice and personal financial risk management decision, w.r.t cash and speculative components. I'm happy with my FOX exposure currently.

This also doesn't make sense to apply to workstream leaders, vs all contributors. I'm aware of other contributors with financial obligations that can't accept that rate, and will be forced to leave.

Talented contributors have numerous opportunities at their disposal, even considering current labor market conditions. I can, and have, turned down higher paying opportunities. I'm not alone.

tl;dr IMO - a blanket policy like this on WS leaders, or all contributors, is a major foot gun and will lead to a talent exodus.

6
PTT
PTTJan 19, 2023

really looking forward to @concernedfox43 talking about this on stage at the governance call today.

oges
ogesJan 19, 2023

disagree with this idea

1
Neverwas
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NeverwasJan 20, 2023

Not sure if you saw my reply to 0xApotheosis, so just checking.
Did I not pose how that value is determined in the DAO? Price is a derivative of associated value.

Show me an example where price controls have had a positive impact on a market” 
During times of high inflation, panic and in situations when out of control greed of individuals causes wider damages to not only that market but to others as well. Example; During disasters price controls are used to prevent the lack of or even perception of supply from allowing for exploitation and the accompanying market conditions/problems this can create. $100 roll of toilet paper anyone? Second Example: Inflationary economic conditions. I can explain further if you like, hope that you didn’t have to wait too long.

To your third point, @pastaghost and CFO Scott had statements on the call around this. I will briefly summarize, best to find it in the recording first hand if you prefer.

One, normal workstream contributor’s as I read are not capped, and Second as stated by CFO Scott, many organizations have situations where “lower” level job functions make more than “higher” level. Cost centers verses income generators frequently, commission based compensation plans. This is frequently addressed in a number of ways, but beyond this point. So the opportunity to make more isn’t being removed or even in question from this post. 

To the last part of your post;
Timing, this might not be something that you or others are are in a position to take advantage of or established a comfort level with and that is fine. Maybe at this point in your professional career being an entrepreneur or the risk of a startup isn’t what makes sense. Leadership should be more than just attempting to lead oneself to betterment, and a responsibility to more than ones self or those who agree with you. This can be contentious and many might believe differently, that is fine. Regardless of expectations, responsibilities are different.  

I hope that the original poster of this thread is willing to continue this dialogue, within the community and share more of their own thoughts and discussion points, I myself was just adding perspective.

0xdef1cafe
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0xdef1cafeJan 20, 2023

You're missing the next step of price controls. If you fix prices, it destroys supply.

A toilet paper manufacturer doesn't make the price $100 to gouge customers. They do it because their input costs have increased, labor and materials.

If the price of toilet paper is capped, and the manufacturer can't make it for less than they can sell it, they will voluntarily shut their business rather than run at a loss - supply is destroyed.

Same with labor. Labor market participants have costs of input to their labor, the cost of living.

If you artificially control the price at which labor can be sold at, and the input costs increase, labor market participants will not supply their labor, i.e. contributors will leave.

This is all ignoring opportunity costs. I can immediately make more if I leave in cash comp. I am still here because I believe I can affect change within the org, and realize an asymmetric upside via my fox exposure, and the price at which I sell my labor meets personal cash flow requirements.

Free markets are the only mechanism that allows supply and demand curves to meet at a price, allowing the market to clear. Imposing arbitrary constraints on markets distorts, and ultimately breaks them.

6
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