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Covers base salary bands, equity/bonus frameworks, geographic differentials, and total rewards packaging.\n\n## When to Use\n- Building or revising salary bands for any role\n- Preparing for hiring sprints and need market-rate data\n- Conducting annual compensation reviews\n- Designing equity/bonus/commission structures\n- Benchmarking against competitors to reduce turnover\n\n## How It Works\n\nWhen asked to build a compensation plan, follow this framework:\n\n### 1. Role Architecture\nDefine job levels and salary bands:\n\n| Level | Title Pattern | Base Range (US) | Equity % | Bonus Target |\n|-------|--------------|-----------------|----------|--------------|\n| L1 | Associate / Junior | $45K-$70K | 0-0.01% | 0-5% |\n| L2 | Mid-level | $70K-$110K | 0.01-0.05% | 5-10% |\n| L3 | Senior | $110K-$160K | 0.05-0.15% | 10-15% |\n| L4 | Staff / Lead | $150K-$210K | 0.1-0.3% | 15-20% |\n| L5 | Principal / Director | $190K-$280K | 0.2-0.5% | 20-30% |\n| L6 | VP / C-level | $250K-$400K+ | 0.5-2%+ | 30-50%+ |\n\n### 2. Geographic Differentials\nApply cost-of-labor multipliers (not cost-of-living):\n\n| Tier | Markets | Multiplier |\n|------|---------|------------|\n| Tier 1 | SF Bay, NYC, London | 1.0x (baseline) |\n| Tier 2 | Seattle, Boston, LA, Chicago | 0.90-0.95x |\n| Tier 3 | Austin, Denver, Manchester, Berlin | 0.80-0.85x |\n| Tier 4 | Remote US/UK secondary markets | 0.70-0.80x |\n| Tier 5 | Eastern Europe, LATAM, SEA | 0.40-0.60x |\n\n### 3. Total Compensation Package\nBreak down total rewards:\n\n**Cash Compensation**\n- Base salary: 60-80% of total comp (varies by seniority)\n- Performance bonus: 5-30% of base\n- Commission (sales roles): 40-60% of OTE\n\n**Equity Compensation**\n- Startup (pre-Series B): 0.01%-2% based on level, 4-year vest, 1-year cliff\n- Growth stage: RSUs, lower % but higher dollar value\n- Public company: RSU grants refreshed annually\n\n**Benefits & Perks** (typically 20-35% on top of base)\n- Health insurance: $6K-$24K/yr employer cost per employee (US)\n- 401(k)/pension match: 3-6% of salary\n- PTO: 15-25 days (US), 25-33 days (UK/EU statutory + company)\n- Learning budget: $1K-$5K/yr\n- Remote stipend: $100-$250/mo\n- Parental leave: 12-26 weeks (competitive)\n\n### 4. Pay Equity Audit\nRun these checks quarterly:\n\n1. **Compa-ratio by role**: Actual pay ÷ midpoint of band. Target: 0.90-1.10\n2. **Gender pay gap**: Compare median comp by gender within each level\n3. **Tenure compression**: Are new hires making more than 2-year veterans? Fix with retention adjustments\n4. **Band penetration**: % of employees above 1.0 compa-ratio (flag if >30%)\n\n### 5. Annual Review Cycle\n\n| Month | Action |\n|-------|--------|\n| Jan | Market data refresh (Levels.fyi, Glassdoor, Radford, Mercer) |\n| Feb | Manager calibration sessions |\n| Mar | Budget allocation (typically 3-5% of payroll for merit increases) |\n| Apr | Communicate adjustments, effective date |\n| Jul | Mid-year equity refresh grants |\n| Oct | Prepare next year's comp budget proposal |\n\n### 6. Offer Benchmarking Checklist\nBefore extending any offer:\n- [ ] Check 3+ data sources (Levels.fyi, Glassdoor, Payscale, LinkedIn Salary)\n- [ ] Confirm geographic tier and apply multiplier\n- [ ] Calculate total comp (base + bonus + equity annualized + benefits value)\n- [ ] Compare to internal peers at same level (±10% band)\n- [ ] Document justification if above band midpoint\n- [ ] Get sign-off from hiring manager + finance/HR\n\n### 7. Retention Risk Scoring\n\n| Factor | Weight | Score (1-5) |\n|--------|--------|-------------|\n| Below market rate (>10% under) | 25% | |\n| Time since last raise (>18 months) | 20% | |\n| Flight risk signals (LinkedIn active, disengaged) | 20% | |\n| Critical role / hard to replace | 20% | |\n| Tenure > 3 years with no promotion | 15% | |\n\n**Score > 3.5** = immediate retention conversation needed\n**Score 2.5-3.5** = include in next review cycle, prioritize\n**Score < 2.5** = monitor quarterly\n\n### 8. Commission & Sales Comp\nFor revenue roles, design OTE (On-Target Earnings):\n- **Base:Variable split**: 50:50 (hunters), 60:40 (farmers), 70:30 (CS/AM)\n- **Accelerators**: 1.5-3x rate above quota (motivates overperformance)\n- **Decelerators**: 0.5x rate below 80% quota (protects company)\n- **Clawback policy**: Define for churned deals within 90 days\n- **SPIFs**: Short-term incentives for strategic pushes ($500-$5K per qualifying action)\n\n## Key Metrics to Track\n- **Offer acceptance rate**: Target >85% (below = comp is off-market)\n- **Regrettable attrition**: Target <10% (above = retention issue)\n- **Time to fill**: If increasing, may signal comp competitiveness problem\n- **Cost per hire**: Include recruiter fees, signing bonuses, relocation\n- **Revenue per employee**: Benchmark against industry ($200K-$400K SaaS, $150K-$250K services)\n\n## Data Sources (2026)\n- Levels.fyi — Best for tech roles, real verified data\n- Glassdoor — Broad coverage, self-reported\n- Payscale — Small business focus\n- Radford (Aon) — Enterprise-grade, paid surveys\n- Mercer — Global comp data, paid\n- LinkedIn Salary Insights — Good for role-specific ranges\n- BLS Occupational Employment Statistics — Government baseline\n\n---\n\n## More Frameworks\n\nNeed deeper operational frameworks for your industry?\n\n**[AfrexAI Context Packs](https://afrexai-cto.github.io/context-packs/)** — $47 each. Pre-built agent knowledge for Fintech, Healthcare, Legal, SaaS, Recruitment, and 5 more verticals.\n\n**[AI Revenue Calculator](https://afrexai-cto.github.io/ai-revenue-calculator/)** — Free tool. Find where you're losing money to manual work.\n\n**[Agent Setup Wizard](https://afrexai-cto.github.io/agent-setup/)** — Configure your AI agent stack in minutes.\n\n**Bundles:**\n- Pick 3 packs — $97\n- All 10 packs — $197\n- Everything bundle — $247\n","readmeExcerpt":"Compensation & Salary Benchmarking Planner Build data-driven compensation structures that attract talent without overpaying. Covers base salary bands, equity/bonus frameworks, geographic differentials, and total rewards packaging. 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