Steal Big Tech's Playbook For The Worlds Best Comp Practices

Speaker A: Foreign. Welcome to the foundation series. Your deep dive into startup compensation with industry leaders from across the startup world. Join me Matt McFarlane, a people operations leader turned compensation specialist, as we uncover the strategies and practices driving success in tech startups around the world. Hear insights from heads of people, founders and experts as we explore how to build robust compensation frameworks that not only fuel growth and retention, but do so in the dynam startup environment that we all know and love. Let's get into it. Welcome to this episode of the foundation series. I'm Matt McFarlane and today I'm joined by Arif Ender, director of compensation for Palo Alto Networks and someone who's spent time at incredible brands like Facebook and Mars. He's one of the sharpest total rewards operators in the market. So I'm excited for today's conversation where we're going to unpack the strateg differentiator companies like Meta Use and how you can replicate it. We'll talk about what to do first when you scale from 5,000 to 50,000 employees. And we'll talk about where organizations are getting the EU pay transparency right and sorely wrong. So if you're building comp at scale, this episode is for you. This is obviously going to be a big year for you guys, right? So, uh, pay transparent transparency, uh, directives coming into play. Um, any, any big, like things that you have to get done before that lands or. What's, what's the, what's the, what's it looking like this year?

Speaker B: Yeah, it's a big. Actually it's not much, you know, only what, five months left. The thing is, we've been preparing, you know, uh, almost since January, last January. So it's been already a year that we are preparing, at least in my current scope and with my team. And yet are we ready? Uh, I can say yes because it's really bigger than what a lot of people think. Like, I feel like my peers and my network, when I really read, even on LinkedIn, people kind of really, I would say underestimate. And the level of underestimation is probably because we are very data driven people. Like, as a nature of our job, um, they look at it okay, it's statistical modeling, regression and all that. I mean, it's more than that. That's. To be honest, if you ask me, that was really the easiest part. Right now we are in a stage that we are going into more change management, communication and like enablement, like training. And that part is the biggest hurdle, I will say. Uh, we are feeling the Stress a bit more because we started, like, really auditing the HR processes and, you know, looking at it from, you know, are they unbiased, are they gender neutral, you know, and all that stuff that the director requires us to do and the outcome of it. There are a lot of, A lot of fundamental and foundational changes you need to make. And when you do that, it's not like, oh, okay, I changed my whole job architecture. Well, you can't do that. I mean, at the end, the machine is already running, so you need to communicate, align then, you know, actually influence people to get those changes happening.

Speaker A: Yeah, it's a big piece of work because it's not just, it's not just identifying the gaps and the discrepancies. Right. Like, it's, it's obviously putting in place a, uh, fix to make sure that you don't see the gaps emerge again. It's about preventing it for, you know, going forward. Right. And, um, and like you said, you know, running, running the modeling, identifying where maybe, you know, either bias or inconsistency has crept in in the past is one thing, but putting in place the practices that are going to prevent it from happening again across, you know, like, how many employees is Palo Alto Networks?

Speaker B: We are getting close to 16, 17,000. But we have a big M and A coming up, so we're going to be around more than 20,000.

Speaker A: Yeah. So, you know, the complexity of a company of that size and the processes that are run that impact and result in differences in pay and benefits and all these sorts of things, um, equity, everything, you know, is huge. Right. So that's where the real effort sits.

Speaker B: I mean, it goes back to, you know, what you want to do, but what has been done, I, uh, mean, again, like you said, it's a massive correction face. Let's say, uh, you look in the past, what you have done, you have to first correct those and then also change it in a way that it doesn't happen again. And obviously people were used to it for years. You know, how we were doing compensation or how we were kind of like, you know, looking at the job architecture and suddenly you say, oh, uh, a, uh, pay Transparency Directive is coming in, so we can't do this, we can't do that. I mean, people get an allergic reaction, especially on the business side, because again, you know, uh, we are creatures of new rituals and.

Speaker A: Absolutely. Criticism habits.

Speaker B: Yeah, yeah, that's, that's the biggest hurdle. And we are just kind of, I think, jumping over it right now currently.

Speaker A: So let's see what Would you say has been the biggest, um, when it comes to helping kind of shepherd the organization towards this kind of outcome or to embrace some of the practices for this change. What do you think's been the biggest lever, the biggest, you know, the thing that they've most responded to in terms of helping, you know, take these steps forward?

Speaker B: I'll say like explaining very clearly what the business impact is and to their outcomes. So very, very good and quite the problem. One of the most visible parts of the directives is obviously the fines and penalties and reputation and legal risk. You know, I mean it branches out. But I just did and we are obviously we are in A, ah, B2B and we have lots of public sector clients like that. That's one of the major channels segments we have. And basically I just went there. One thing that literally you could see in the room like their, their eyes are open and especially if they're all looking at those clients say if we don't follow it and we don't take the you know, um, uh, corrective measures, you are excluded from public tenders. You know, go explain it. You were like, oh, you know, it

Speaker A: was a very direct, tangible in the room. Yeah.

Speaker B: Um, and you know, obviously there are like further details that we talk, but that was a great example. So if you, if you tell them how it's going to hit actually their goals or their outcomes, uh, then, then uh, you get some attention.

Speaker A: Yeah, that makes a lot of sense. There's, we have a similar impact here with our uh, annual workplace Gender Equality Agency report. So if you don't, if you don't submit, you go on a list and you get, you know, excluded from exactly that. So yeah, for a lot of companies that sell into the government or councils or something like that, it has a real tangible impact that you can, you can pretty easily quantify, can't you?

Speaker B: And again don't. I mean, uh, also, I mean the new generation, the new workforce actually really cares about this stuff way more than probably my, my parents generation even. My generation is like for us maybe, I mean, I don't know. I had a list of like an industries that I wouldn't like to work but that was more like a personal preference. Right now there is a bit more kind of awareness in the generation and they really look at it. I'm talking to some TA specialists M. Not only at ah, Palo Alto but even in the past like at Facebook, uh, like you know, the candidates are asking about really reputation, the employer branding kind of stuff like you know, or the recent headlines they are directly bringing into conversation. And one of the things that EUPAY Transparency Directive wants to do is kind of almost like a name, uh, shaming. Uh, so actually, companies need to be

Speaker A: really careful about that especially, I'd imagine, like. Yeah, you're right. Like, you know, if. If they have a choice between two companies and, you know, anyone that's had that sort of Gen Z, millennial or younger, you know, is certainly looking more at a. More at the. More employers from a, uh, values and a purpose perspective. And they're seeing whether or not there is alignment between the kind of company they want to work for and the things they want to see them doing. They obviously, like you said, have very different expectations when it comes to pay disclosures, justifications, fairness, consistency, all those sorts of things. So it's, you know, if, if you're not demonstrating that publicly now, then it's very easy for people to just not apply or, you know, have all sorts of adverse impacts.

Speaker B: Yeah, definitely.

Speaker A: Nice one, mate. Well, uh, let's roll into it anyway. Roll into the questions. I mean, obviously one of the things we talked about covering, uh, in this conversation, and one of the things that I'm excited about talking about with you is that kind of that scaling piece, this kind of concept that for a lot of people listening to this discussion ordinarily, or most of my audience, tends to sit in that sort of like sub 500, you know, size of company. They're all scaling, they're all growing. And I think where I'm really interested in taking this conversation is like, what's next? I obviously work and spend a lot of time with those companies building their first pay practices. Um, but for me, I'm keen to dive really deep into, like, where you see companies go once they do start to hit their stride and really start to, uh, see their scale. So, you know, maybe the first question is just at 500 versus, versus 5,000, what do you typically see are, uh, some of the big differences when it comes to the pay practices at that sort of scale?

Speaker B: Well, I mean, if you ask me, I mean, and if you look at my background, let's be honest, I always worked with, you know, quite structured, I would say considerably structured, uh, places. But when it. I mean, my last two stints, especially in tech, was a massive growth, but the growth size was also, you know, from, let's say, I joined Facebook when they were 16,000, and at the peak before layoffs, it was 90,000. So, I mean, still, you, uh, you could direct this or if. Because I was looking at The EMEA region. The EMEA region when I joined was one maybe 1500. At that peak it was 11. So we are talking about almost 10x so and at that scale it is actually when you look at the absolute numbers it's crazy and I'm right now I'm feeling the same here as well. Um maybe the head count is a bit more headcount, headcount growth is a bit more reserved but we are actually uh. We. We are increasing our geographical footprint. When I joined I think we, I was responsible around 50 something countries. Right now it's 65 and still counting and it's just only MA and LATAM so I don't have the global uh scope at this point. Uh so there's also the APAC plus North America is, is is going to be added to this. So um. So I am coming from maybe one step further but I'll tell you from

Speaker A: big to much bigger if you ask me.

Speaker B: And I, I obviously uh. In my network and like really close friends they are more on the that that scale. You know uh the first couple of hundreds to couple of thousands and I mean at the end when I, when I really uh discuss with them actually I don't feel like a lot of things change. So the one key fundamental thing that I supported is actually the job architecture. Leave everything else really. You know and, and it actually when you really think about it by the boot definition everything starts with the job architecture, job evaluation, damn pricing, you know so you know the dread um and the lack of it eventually when you kind of hit probably like 5,000 plus and if you really don't have it still at 10,000 plus. Oh my God.

Speaker A: Yeah.

Speaker B: I mean that is the chaos and one of the first questions even when I was interviewing like or you know when companies reach out I always ask like I mean do you have the job architecture? If not like I mean it is a bit of a flag red flag for me. Um ah. I will say that is the fundamental and afterwards like if that is in place technically it's a matter of like how how solid and structured your compensation programs are and how you live that as an organization not only I'm um. Not isolating into rewards team basically is the business is your you know like main stakeholders even the broader people organization do they understand? Do they follow do are they aligned with that you know with your philosophy strategy and technically I'm um thinking you know like I mean if you have the philosophy and strategy they should kind of translate to your programs or they, they should be the Baseline for all the programs you, you create, you build and scale that I believe that makes store breaks it. If you don't have that trust, if you don't have that buy in, create everything, you know it's not going to help you.

Speaker A: Yeah, I hear you say it's really about like enablement, about adoption, about the practices being exhibited across the broader business rather than maybe it being driven centrally from a rewards team or a people people ops team, something like that. It's really how it's being carried out through the business. Okay, so what, so for a company that's making that transition, what have been the things that you think have helped them achieve that kind of an outcome?

Speaker B: Bringing the experts and giving them the environment. And I'll, I mean when I say environment it includes, I mean I'm not talking about like really the culture. I think that's. Anyway if you ask me personally I believe in the culture and values a lot. Those are the like key things. But I'm not gonna go to that philosophical side. I'm really talking about like really tooling let's say in a very basic essence, uh, you need to give that to, to make it because at the end of the day, let's be honest, like if you are at that startup scale up stage, you know the funding even if you are really funded well I mean you have a, probably a quite a higher burn rate because you want to grow and everything. And uh, how much of it do you uh allocate to let's say gen a function like generally you know, if you look at it like the tough key employees either product engineering or like go to market. Uh so when is the first HR person or comes into play, like when you hit probably the couple of hundreds and then maybe they start growing. And in that case the key, the first key employees even in your HR people has to be really as uh, I mean has to have that expertise. Plus again you have to be super efficient. So if you ask me, I think investing in tooling that really makes those teams efficient really pays off. And in most of the cases, I mean personally I still look back and what really made Facebook great place to scale and to work with in the essence still I didn't see, but I mean I didn't see anything kind of at the same level to be honest is even the people engineering team we were able to rather than going to vendors trying to find something and to fit it into our unique processes. And like we say okay we have a problem, we need this boom, you know, be it two Months, three months, whatever the roadmap they have or like what's the complexity of that tooling is it was internally built, it was insane, you know.

Speaker A: Yeah, it was custom made for you. Right.

Speaker B: I always give the same example. I think it was my first year, maybe second year like around 2018 where we really started growing crazy and we were like three people. In emea, only myself and I was, at that time I was only responsible for GNA functions. Uh, in EMEA I approved by myself 800 offers. And this is, these are the offers that doesn't go standardized. Like they, they are not pre approved. And there we said like, I mean we can't go like this. Like it's impossible.

Speaker A: So what. Wait, so what kind of a change in velocity was that then? So you were doing 800 in a year, I'm assuming. Yeah. And what was it previously?

Speaker B: Yeah, I mean I uh, will say 200, 300.

Speaker A: Okay, that's it. Okay, so 4x was, it was a.

Speaker B: I think probably, you know.

Speaker A: So you probably offset three other headcount

Speaker B: and say we're gonna hire 10,000 engineers. You know, we are talking about that time. Um, like Suddenly around from 18, 19,000 we became roughly right away doubled it within a year, within 18 months or so. I'm talking about that era. Yeah, I think it was 18 and 19. Um, so how do you cope with that? Uh, and I always say like I think their internal recruiting tooling is one of the best SaaS spinoff. It could be the, one of the best SaaS too. Anyway, a gate scale it in a way and created this whole offer approval process in, in an internal tooling. And we also had to like really look back how, how much can we flex and how loose can we from comp perspective without like you know, losing the pay equity and the you know, the programmatic outliers and stuff. Let's, let's bring in. So again going back, I have the domain expertise. I know what I uh, where I can flex, what I can do, what I cannot do comes with the tooling or you know, like basically being able to create that process and the workflows and the tools when they're combined. It was, it was like really seamless. And I see that a lot of people is having that pain.

Speaker A: Yeah, you're jumping right ahead to like what I was going to leave as my last question, but it's so interesting around. Ah. I mean you obviously have a pretty unique advantage in the sense with, you know, I think you're a, you're a member of um, uh, world at work. Is that right?

Speaker B: Yeah.

Speaker A: So you're, you know, part of the team there. You obviously have a pretty broad purview across, you know, rewards, uh, in a global context. You engage a lot of people in teams. How often do you see something like that, like what you've just described at Facebook, the lack of it or.

Speaker B: I, I did, I didn't hear that a lot. Like, really, I mean, here and there, but like a, holistically, as a, as a kind of a people strategy and how it's backed up, um, I didn't see much and again, I, I totally get it. Like, for instance, we also have that strategy in place, but it's also, uh, it's also like, I mean, it goes back to financial, you know, headcount allocation. Um, obviously there is a price to pay. But if you ask me, that is one of the things that you need to, as a rewards professional, or again, like as a, as a people leader, you need to go and explain really well to, to your finance peers, you know, how actually in the long term, actually it's cheaper to get even two software engineers, like one product manager to build your HR processes and tooling. I'm, uh, sure, you know, it is going to be cheaper in the long term.

Speaker A: Well, I mean, it's funny you say that and I like, you know, like, like any good podcast host, I think these days there's inevitably a question around AI and I was, I was reluctant to dive into it too soon, but I mean, I can't help but ask, like, do you not see some of the tools we're seeing with Claude Code, with lovable, with some of the, you know, Gemini's got a version where, you know, you can essentially come up with a concept and you can, you can have a working feature or a product in relatively quick succession. I mean, for me that just increases the impetus, the fact that it's, you know, even easier for you to have something like this relatively quickly and without having to even engage a software engineer. You know, that if anything there's more pressure for teams to be able to have these kinds of things.

Speaker B: Now you have like, you know, you know, for uh, almost like 5050 or something like that, you actually have almost the, one of the best engineering platform. I mean, I, I, it's, it's my, you know, personal hobby. But like literally over the weekend I built, I was doing it in Google sheets, I built myself an internal financ family finance tracker. And I am a little bit close to coding and stuff, but I mean it was in the university years. Uh, but technically, I mean, I cannot quote, uh, but it is so easy to do that right now. I mean, obviously, I mean, again, like there is information security if you have access to that. Uh, you know, again, uh, one of the perks of, uh, working in cybersecurity, we are naturally a bit, you know, pessimistic, getting access to different tools. But I mean, technically, if you are able to do that, and for us, for the new startup scalers, I'm sure this will be way more possible.

Speaker A: I mean, what you're talking about is fundamentally, you know, what was previously a competitive edge that only a company like Facebook or Google or whoever were able to afford has now been democratized enormously. Right. Like anyone, as you said, anyone can whip out their laptop, they can go to court, code or something, repl it, whatever. They can start to create some of these concepts that can have a very tangible impact on how long it takes them to do things. You know, all sorts of things.

Speaker B: Yeah, for sure. Like, really, you were spot on on that. You know, like, I mean, I, if I would have that access, probably I, I would already started using and creating some, some of the tools that I have that I'm maybe spending with manual copies and pa. Like we still do that. And if you ask me, it's really, you know, it's not adding value. And a lot of, A lot of companies are still trying to kind of build shared service centers and, you know, moving people to like, emerging. I mean, let's sit down and see. You know, like, I mean, at the end. I felt that pain very early in my days, you know, um, uh, like one of those big, uh, erps, you know, I mean, we have to use it because the whole company uses it. Everything is there. But if it doesn't work for you and then you, if you are. And that's the, the biggest red flag for a lot of, a lot of processes. If your tool forces you to shape the process you want. Well, I mean, you got to think about it, you know, because you, you have to use that erp. Uh, you have to actually do something else than what you should do in your process, even one or two steps in it. Uh, I will really, you know, sit down, think about it and look for other alternatives. And with these, with these wipe coding, you know, with these platforms right now, it's so easy, you know, like, put a really good prompt, explain your business process. I mean, hopefully within a couple of days, I'll give one week, you'll have that ready to deploy.

Speaker A: It's a real warning sign for incumbent, uh, technology platforms, isn't it, that, you know, their competitors are no longer the other logos that they used to look at. It's fib coding. It's the fact that people can potentially produce their own feature that you were previously, you know, the sole provider of. Um, and now you've, you've really got to make sure that you're creating something that people can implement in a way that works for them rather than them having to adapt and then work within the way you've envisioned the process. Right.

Speaker B: Again, it's, it's all about investment. And I, I see that after those 22, 23 layoffs, a lot of, A lot of companies are going back to prioritizing, obviously, the financial aspect. And I definitely, I get it. I mean, at the end of the day, you know, uh, that's, that's the, that's the way they need to stay alive. But there is one thing that I feel like a lot of these culture changes happening, uh, is gonna bite them back when the market's gonna, I mean, it's cyclical and employees are generally, they don't, I mean, people don't forget. So. And to be honest, maybe it's gonna hit you in your books a little bit more, but you know, still trying to be people centric should be the key and to enable them and to give them like really the right tools to make an impact, then people do it, you know. But right now I don't think we are at that era, at the start phase.

Speaker A: No, I mean, I certainly don't hear a lot of this sort of discussion in the teams that I either work with or speak to or something like that. But I want to. So let me, firstly, I'll put my hand up and say. So I personally haven't actually played with Claude code yet, so I've literally got a, um. What is it like a tutorial loaded up on my computer, like to have a bit of a look through it. But what I want to do, like, so even though it maybe is not something that you're using it in the environment that you're at right now, if you were to speak to somebody, you know, that's listening and say, hey, between now and, you know, reaching a level of proficiency with Claude code, where you probably could produce something that actually, you know, a few hours, a few days, it could actually have an impact in your team, what would be that? Roadmap. So you mentioned that you obviously had some, a bit of a background in coding from university, so you've got some familiarity with Claude code and I have heard that it's something that requires a little bit of understanding code. Um, but if someone was like me going from zero to the environment that I just mentioned where we're able to actually use the tool effectively, what are some of the things that you would tell people to, to either brush up on or get familiar with or whatever to reach that level of proficiency?

Speaker B: Well, to be honest, like I was so far away. Like even the languages that I used in the past, like PHP and you know, I mean it's, they are still out there but right now all these front end backend frameworks and everything. So I think it's just being familiar like you know the best, I mean what I've done is like I literally just searched on the Internet on YouTube, you know, the latest best practices in software engineering for front end backend programming. Like I, this was my, what do you call? Search query. And ah, then I like really just read what is it? You know, you know, just watched a couple of videos probably I maybe just watched like 10, 15 videos and then basically how to effectively use cloud code. I mean I'm, I prefer cloud code. I mean it could be Gemini obviously, um, and others chatgpt. Uh, like basically I just went like you know, uh, what are the best practices to clothe code for effective, you know, building effective uh, products? Uh, I just followed that. You know there are so many templates, you know that for prompt templates I actually you use Claude to create templates

Speaker A: to create the template to prompt Claude. You know

Speaker B: I, I really also didn't spend that much and as you read, I mean if you already have that kind of interest anyway, you know, you, you start learning. I mean because it also prompts back uh oh, you know, like I need to do this in next js I say uh, ah, okay, what is it? You know, then I start searching. What does that mean?

Speaker A: So you're, you're watching a video as, and as it's prompting by green.

Speaker B: So again if you, if you really like learning, I mean it is, it is an amazing fun process by the way. At least personally I, I really enjoy um, so I mean it's just you know, uh, two birds with one stone. You know, like you learn new skills, you get what you need, uh, and probably in a faster pace and cheaper.

Speaker A: It's amazing that it's that simple. I mean that was literally the path I was going to take which was, you know, and again like you said, there's so many videos out there, there's so many YouTube videos that are free. I mean, you got to deal with the ads, but, you know, you have a look at how to use this thing, you brush up a little bit on a couple of the words that it spits out that you're unfamiliar with. And then after what, you know, three hours of videos, max, maybe four hours, you've kind of got the ability to work with this technology that can fundamentally run a process or streamline something. I mean, I would be surprised if you didn't get that time back in the first one or two prototypes that you build for, you know, for a problem you might be trying to solve. Right?

Speaker B: Like, I mean, again, like, I'm using the latest project I had, you know, about just maintaining my own family financials. Every month I have, I have a slot for at least two hours, you know, to, to update the investments, their current price. I mean, it was like really, you know, quite.

Speaker A: I'm gonna have to get this off you because I did the same thing.

Speaker B: And literally right now I'm just clicking one to fetch all the stock prices. Uh, it automatically syncs. Uh, you know, the only thing that I still do, obviously I cannot connect to the bank systems. I just download that monthly CSV, upload it, and in the backend it, categorized by AI, all the expense types. And I mean, I couldn't even do it. Like, I didn't have the breakdown how much I'm spending because who's gonna. I mean, I don't have the time to go through 400 transactions and see, oh, okay, is this groceries? You know, right now, AI does that, uh, and I get it running and technically it's gonna, it's gonna give me way better insights and details for probably a fraction of what I'm doing. Uh, uh, monthly. And again, like going back to that, it's exactly the same mentality for HR processes. Like how like tech, really. If you just. I'm, um, I'm coming with an. Right away a starter idea. Like, you know, you can easily create a market pricing tool. You know, like, again, maybe you still upload a CSV file or so, which is, I mean, still okay. You know, I mean, you just download it and take. And um, by the way, if you give Claude that template, it actually creates a specific parser for that. So you don't have to even fill a certain basic template as well. You can even directly put the survey results into it and create, you know, like create your, uh, market pricing tool

Speaker A: and then suddenly you can give it to hiring managers. Talent acquisition have got it like you're not having to be the gatekeeper for this information because you've just empowered the whole business to, to work with it. Right.

Speaker B: But how solid it's going to be, I think what I realized you have to know that, I mean you, you, you should have that domain expertise. And that's why I'm saying like the one thing if I really look back from my ex colleagues or current colleagues, uh, you know who, who worked in those fast scale environments and, and the companies they worked and how their talent strategy was and that includes again Facebook and even Palo Alto. And like I, I mean when I really Google I think does the same it seems down leveling. But they're bringing the best people fitting into the role doesn't matter. Like and they are specifically looking people for you know, who wants to make impact. They are not, they are not obsessed with titles. They are taking care of very well from a compound like rewards perspective, from packages perspective. That's the key. You uh, gotta pay the man. I mean talent is a commodity, you know, like basically um, but you bring that expertise and let that build because they've done it, they know it. And that is the key. I mean if you don't know the what if you don't know the whole process and what could go wrong or what could go right. Well you know, I mean uh, yeah, obviously you'll get a very simple workflow which is fine, which will work but you know devil uh, is always in the details and especially as you scale all those exceptions or deviations will pop up. So you need to have that experience. Somebody worked with those exceptions or outliers, whatever could be deviations let's say to think ahead and build a really bulletproof process for you or program.

Speaker A: Well I think it just goes to say as well like why the people team are the uh, people that should be building some of these things for themselves. Right. Like they shouldn't really be you know, outsourcing them in some respects. Whether it's because they've bought a piece of tech in that, you know, you have to fit to their process or you're speaking to the, the development team who you know they might be the end user or the recipient or receiver or something but they don't understand all of the stuff that goes from start to end to get to deliver the outcome necessarily. But yeah, I mean it just, to me it just means, it makes me think gosh, there's, there really is a place for you know, in the people team is the future of someone who really is amongst that team building these tools with them hand in hand and kind of his ground and has a background in the people space that can make sure that expertise isn't lost in

Speaker B: the workflow again, I mean uh, you always start simple and one key thing I learned and that wasn't my muscle is you know, ship now, you know, improve later. Uh, or uh, that that is still important. I'm not saying that but you should be able to think uh, you know, along the way. Yeah, obviously, I mean there is an, there is an mvp, you know, ship it, you know, uh, as a program. But you need to, you need to be super flexible and thinking ahead of it because what you do in the US doesn't apply to Europe or the rest of the world. I mean just a very basic example. One of the things that I, I mean I'm um, this is probably like more than half of my career I work with US headquarter uh, headquartered companies. The one thing for, I mean I can complain about them is they prioritize which is fine. Most of the uh, head counties always sits in North America. They prioritize us and it's rest of the look man, like rest of the world is almost 200 countries. Different languages, cultures, labor law regulate. It's totally different. You know, like you can't slot everything into one bucket and or try to uh. Okay, you know, we do this in the U.S. uh, well, I mean, yeah, go explain it to a works council in, in Germany or I don't, you know the regulations in Australia or reporting requirements somewhere else. Uh, yeah, that doesn't happen.

Speaker A: I'm laughing a little bit because I feel like there's been some times in my career where I've, I've had people with that sort of perspective as well where they sort of see it as two it's California and the rest of the U.S. yeah, uh, even within us

Speaker B: they say that like as I'm even like you know, scaling it. I mean I, I've seen like a lot of, I heard so many times that that reply but we've been doing this in the U.S. look, it's not the same. Uh, so. And that's why I think especially if a startup or a scale up is scaling geographically, one of the key hires they should have is like really the someone with a international and global talent and be very diligent about it. Like somebody working on geographical scope with a broader geographical scope and responsibility is going to bring you massive value as you go. And it's again you won't feel it in the short Term the problem starts when you start settling I will say probably around this 16, 20,000 people where you almost have the global coverage, probably 20, 30, 40 plus countries. Then you start seeing oh you know, like my policy doesn't help so I need to deviate for, for this country or er, issues start popping up. You know, I mean if you, if you don't want to go crazy with those problems in probably in the next three, four, five years, just really getting the talent with that expertise beforehand probably will save you way more headcount than bumping up your er, headcount or hrbp. Ah headcount. Like I'm just really very key hires that you would need to sort that those problems out that would save you actually money.

Speaker A: Yeah, you're hitting on something I was really eager to speak to you about which is this, I was thinking of it more from and this is just speaking to I guess more my experience with um, with startups from an Australian lens is that typically they, they um, get a bit of traction in the Australian market and then as they start to mature they get uh, you know, they get bigger and then they tend to relocate their headquarters to the US or they start to expand their footprint um, internationally. And so you're saying one of the first best moves that they can make in that circumstance is by you know, bring in some headcount with expertise in that geography, make sure that they're coming at your I guess comp expansion with, with the lens of you know, having been grounded in that culture, in, in the laws, all those sorts of things. What, what then tends to be in your experience to be like the first sort of pillar after that so you've hired that person. How else do you tend to see and maybe maybe headquartering, you know in the US is a great example that you can use. But like how, how then do you tend to see companies change their comp approach once something like that happens?

Speaker B: And that's a uh, painful change by the way. It is stabilizing the processes and making it a bit more structured which kind of loses the flexibility. But that, that is still the key. What I'm trying to say is you know, you're gonna start probably creating offer guidelines, you know and the RA and then certain limitations that you can't do this, you can't do that. You know that there is, there are like caps for sign on bonuses or equity range. You know, what are you going to just basically streamlining, structuring, putting things into like some rules, procedures. It looks, it sounds even, it Sounds boring. Um, but you have to do that. I mean unfortunately, um, you have to do that because you, you cannot go that row again. We talk about the EU pay transparency. I mean you can't hire anyone at, at any cost at this point doing the same job. You need to have a structure. Like the whole directive actually requires you to have the job architecture. You know, um, because I'm always here and like even just you know, reading some post from some, some CEOs or founders on LinkedIn, you know, higher at all costs.

Speaker A: They read well on LinkedIn, don't they?

Speaker B: Yeah, I mean I totally get it. And again, I'm, I'm definitely like, as I think I already mentioned once or twice, for me, talent is a commodity. If you want to get really the a talent, yeah, you're going to pay the price. There is no cheap good talents. And so I'm totally fine with that. But sometimes you need to, you need to. I mean if you already have the strategy and again, as a real life, you know, if you tell me like I have a peer group of like 12 companies and I'm targeting 75th on, on base and maybe uh, even 90 on total comp. Um, perfect follow. I mean you gotta follow that one. And sometimes, yes, your best talent in your, in your top of funnel or in your funnel, maybe they're gonna get 30, 20, 40% more. Should you get that person or not? Uh, and that's the key. I don't think you, you should after at that, that point, that inflection point or we are talking about, sometimes there will be people that will be even more expensive and they will be probably the rock stars you think they should be for your organization. Um, but then the most important question, if that person. Yeah, okay, it's fine, you can afford it, go get that person. 20, 30% more. You have nine people maybe doing the same job. I'm giving an example and let's be honest, especially the newer generation, they talk to each other like, you know, compensation is not a black box anymore. Everybody knows what the other people are getting. I think especially the new rewards professionals, they should accept the faith. It wasn't that much when I started, but yeah, right now everybody talks.

Speaker A: It's everywhere.

Speaker B: Yeah, transparent, even if you don't want it. And is it really worth to demotivate nine people just to get someone?

Speaker A: Well, I'm curious, I'm curious how you think that the EU pay transparency may actually work against people in that regard. Like do you think that, do you, do you anticipate seeing companies that want that 10th person, that a, you know, the person they think is an a player, they want to pay that money. Do you think they'll go to the extent of, you know, giving them a different job title and you know, varying their job, you know, enough to fool the EU pay transparency and be able to bring that. Like, but, but it comes at a cost still though, right? Which is that it's more admin m. It's more burden. Like how do you, how do you see this kind of um. Yeah, manifesting when, when companies often want their way.

Speaker B: Right, Great question. I'm giving one basic example again. You can play it, you can then inflate your job architecture. Who's going to maintain that? So then probably you need to hire a couple of either comp. Analyst or hr, whatever. You know, you need some resources, start maintaining and cleaning that. So there will be always enough. I mean it's a ripple effect. There will be an aftermath of that one. And on the business side, okay, you bring that 20, 20, 30%, you, you literally mess up with your averages and your pay equity. Then what's going to happen? Because the directive requires for you to do a remediation. Like, I mean take actions. What is the action? You cannot decrease that one person's salary. I uh, mean at least not in Europe. Uh, so what's going to happen? You need to bump that nine, I mean like nine times 10%. Actually you could, you could have got three maybe, let's say a minus people, you know, not maybe that one a. A player. But again, I, I'm not saying, you know, probably they will. I mean people would probably add comments uh, after hearing this, like, but you know, like you say that the talent should be the A player. Always hire the best. It's also a matter of risk management. You could live with that. I'm not saying, you know, like just because you hired that one, like the whole eu, you know, European Commission is gonna like really, uh, coming after you. It's a risk management. Obviously, you know, maybe, maybe those nine people will not care. But that, that guy or that woman gets 30%, you know. But if they do, it is a risk. Are you taking it or not?

Speaker A: And I think that's the thing, right? Is that where we're seeing more and more that you know, people do care. I mean they have cared about fairness for a long time. It's just the fact that we haven't had transparency for a long time. And that's the, that's the new thing, right? Companies talk about it more, people talk about it more. And so this innate human expectation that if you and I are doing the same job, we'll get paid the same is now being brought to the fore because, because of these changes, you know, at a, at a legislative, at a societal level, all these sorts of things. So, you know, you might, you might think it's a risk you can handle as a company, but it's uh, it's probably a risky approach to take if you think that you're going to keep those people engaged and like I said,

Speaker B: also really stick to the values and sticking to the values and your programs, uh, is key. If you ask me again, when I really reflect back why Facebook was able to scale on no matter, um, was able to scale that successfully why we were so successful in or offer acceptance captains and hiring the best and stuff. Well, everybody could say, yeah, because you, you pay lots of money. Well, I mean our compet. The competitive landscape was different. Like my competitors were also the best players. So at the end it was not just because I wanted to, but I also needed a certain talent and that came with the price. A bit more aware about that and same here as well at Palo Alto. Like it's a totally different kind of a skill set and experience and industry. But how we, how we really look at it is, uh, you know, we are trying to stick to the guidelines and there is, there is a philosophy behind it. Always go back to philosophy, strategy. You know, like again, I'm maybe talking in a by the book, uh, but there is a cascade. First you set the philosophy, uh, is the guiding principles and then your strategy then goes into tactical and operations. For instance, Facebook never, never did a counteroffer to their current employees who comes. You know, I have a, I have a competing off. I have an offer from Google. Never. We never. And we were super clear since the start to managers, to leaders, to employees in their new hire orientation. We do not entertain counteroffers.

Speaker A: Yeah, don't even ask.

Speaker B: No. And the reason behind it was about the pay equity, which was a, uh, philosophy of that, uh, you know, we want to be equitable and fair. It wasn't fair. And again, I'll tell you why, why it's not fair because you are going out and which is fine. I'm not saying, you know, like, actually I always say like be always on the market, but because you are going out interviewing, spending time on it and successfully and well done, kudos getting an offer. But on the other hand, there are like again, nine of your peers. Uh, sorry about working, working crazy. You know, their Bottle, uh, and being loyal to the company and their role. How is it fair, uh, you come and ask me that you need to be compensated 10%, 15x percent more than that. That was the talk. And again, this is a philosophy palo. I mean, in my current remit, it's a different. It's different because my landscape is totally different.

Speaker A: And like you said, a different philosophy, a different approach.

Speaker B: Yeah, but my colleague, I mean, again, the whole strategy and philosophy is also different. I mean, it could be okay, like, I'm just giving an example how, how the philosophy cascades to your daily actions in your compensation or reward programs. And sticking to that from the start actually kind of shapes the culture as well. All right.

Speaker A: I mean, we've done, we've done a number of different topics. I think the last one I'd love to, to ask you before we, we close out is that we're obviously talking about this at the start of 2026. You know, this is clearly a landmark year for, you know, for the EU Pay Transparency Directive. There's a lot of work that's been done by some companies, maybe not a lot being done by some others, but in preparation for that, you know, 2026 is obviously going to be a year of upheaval in that respect. What do you think 2027 looks like with respect to the EU pay transparency directive?

Speaker B: Lots of reporting.

Speaker A: But do you think things will settle down? Do you think companies will be chasing their tail still? Like, where do you think the bulk of businesses will be?

Speaker B: What I see in the current state, the one thing that probably also keep people in the dark, let's say, uh, is technically the directive cascades a lot of the nitty gritties and details to the local bills and transition. Yeah, basically to the current EU member states. And how many of them already even kind of have a proposal? Uh, like, what is it? Like, a really handful of them. So technically, even less than half of the member states, uh, only maybe have a, have a proposal right now. Uh, and I think that also kind of keeps people still in the dark, you know, and they, it kind of creates an environment. It's actually not too late. Uh, but you never know. Like, I mean, if you really, if you are really close to how the EU works, you know, um, there are also a little bit of those, you know, last minute. You know, I, I expect in the last, let's say after March and April, we will see a speed up. Uh, once that comes, uh, I think it is gonna be a little bit iterative as well. For the first year Companies will see, you know, how they react or they should react. Maybe the, the bill is going to be updated So I think 2000, I mean this year and probably even 27 is going to be a little bit of you know, trial and error. But obviously still um, if you read the follow of the directive requirements, I mean basically a lot of companies has to do a lot of reporting, you know, about gender, PayPal equity and stuff. Uh, so if you ask me companies need to be ready for that from a skill set, tooling, whatever, uh, perspective no matter what. You know, probably you need someone who understands statistical regression and can do some you know, uh, analytics and then do the reporting. Uh, so I will get ready for that as well. Um, and I mean again it's really, I mean if, if companies still didn't, didn't get ready yet, they're going to face a lot of challenges and probably they need to speed up uh, which is going to be quite, I don't know, like it's going to be tough at this point but even like what is it three, four months ago there were like a couple of round tables forums still half of the room barely started. Let's say I'm being optimistic. Again if you ask me, uh, it's a bit late but I hope they are way faster than us or else it's going to be really painful.

Speaker A: It sounds like it. So yeah, still a lot of change, probably a lot of iteration. Recommend getting some analytical skill sets in the team to make sure that you're uh, sort of future ready by the sounds of it.

Speaker B: And one more thing, last thing and this is, this is one of the really observations I had really going back to those different cultures or like you know like the US versus rest of the the world kind of st pick France gender equality index why countries came up and I think Australia has the same you uh, know, uh, certain aspects of Australia, gender pay, you know, reporting. They try to fix their social issues. Like really if you really look at it because one of the things is in France is and I think it's quite a high ah amount of score in the overall score. Like I mean um, is basically how many of the women who return from maternity leave gets a salary increase. Doesn't make sense to someone who is not living in France or maybe no exposure as an experience uh to, to France. Uh, it doesn't make sense like why, why is this quarter uh why why do I have to do that? Or US companies say like you know, it's my policy, I don't care. Well dude, I mean this, this is a social issue in France. This was historically French companies actually like say penalized women who went on maternity leave. And it was kind of almost a standard procedure not getting a merit increase because you were off for the majority of the year. Yeah, but what French government did they put it into and give quite a hefty score. Uh, you know, a subscore just for that data point. And you, you see that, you know, uh, and basically if you are a U.S. u.S. Headquarters and want to expand or basically geographically, always look at those social or you know, cultural aspects of what is required in the legislation. Look at the market practices. I, I think I gave in the previous podcast or you know, uh, discussions we posted with, with others. Um, one of the, like I, for me that's one of the thing. I even just give my new you know, junior analysts and stuff. Uh, it was hilarious. When I was working at Mars, we were like really scale. I opening a new entity and a factory in, in Nigeria. And it was my first exposure to Nigeria. So you know, I was told like you'll go create all the reward structures. Fine, what is it? You know, like I get the seller survey, map it, price it, you know, uh, and I call off the standard guidelines. You know, how we, how we create the general compensation structures. I gave it to the recruiting. You know, go start hiring a couple of weeks late. Like a month later they come like we can't hire anyone. So like how come. No, it's not, they're not accepting. Okay, what is the current comp. You know, uh, basically, are we, are we providing less? No, but nobody accepts it. I mean these are the current comm. Actually. That's really uh, interesting. That's weird. Then I start like really just going into the like talking to people and actually talk to a couple of candidates. Like especially like head of sales kind of, you know, senior leadership. They told me, uh, and super specific nuance for Nigerian market. There is historically there are like around 40 different types of allowances. And we were super simplistic at Mars. You know, you have basic salary, have a guaranteed allowance which kind of we combine and put it as a 1 allowance number and, and you know, basically variable pay, whatever. Like technically in comp I'm competitive. Actually pretty competitive psychologically. When people didn't see generator allowance, Christmas bonus. I don't know what people said. Like yeah you are. This is not competitor.

Speaker A: Yeah. Just because it wasn't a line item. Yeah.

Speaker B: And literally offer acceptance was almost hunted. Like basically we hired everyone for the ramp up of the Factory. So it's an amazing example how culture, social, uh, you know, like the society culture shapes your comp practices and markets. So you can't be I do it my way and that's no way.

Speaker A: Yeah, it really pays to have that local insight, doesn't it? Yeah, well, I mean I've certainly learned some things in this podcast. I've got a few takeaways, mate. I really appreciate the time. Thank you so much for jumping on and uh, yeah, I appreciate it. It was. I'm glad we could finally do this.

Speaker B: Yeah, we've been waiting for this one. But I also really appreciate you gave me this opportunity. It's always really fun to talk to you as well, uh, even on a personal note and no, I appreciate it. I hope we'll continue these discussions. You know, I have lots of stories to tell Matt.

Speaker A: I'm sure we're going to get a lot of questions out of this one, that's for sure. So, yeah, I think there's definitely going to have to be around 2 on the cards. But, uh, I appreciate it. I'll let you get on with your day.

Speaker B: Thank you so much. And hopefully, uh, hopefully it's going to be a great year for you as well.

Speaker A: I appreciate it. Thanks for joining us on another edition of the foundation series. Make sure to head over to our website to subscribe to the foundation series for monthly editions featuring future interviews on startup compensation. In each edition, we'll explore the different strategies, trends and challenges faced by startups around the world. If you have a burning topic you'd like me to cover or a standout guest that you want to hear from, drop me an email so I can dive deeper, uh, into the compensation topics that matter most to you. Join me next time as we continue to uncover the strategies and practices driving success in global tech startups around the world. Thanks for listening.