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July 28, 2022 | Tom Ballard

Carta’s “State of Start-up Compensation” report for the first half of 2022 issued

Carta, a firm that helps companies and investors manage their cap tables, valuations, investments, and equity plans, has issued its “State of Start-up Compensation” report for the first half of 2022.

According to Carta’s analysts, the key trends overall were as follows:

  • Remote hiring soars. In 2019, about 35 percent of new hires were based in a different state than the primary company headquarters. So far this year, that number has ballooned up to 62 percent.
  • Geo-adjusting is the norm. The vast majority of companies (84 percent) take employee location into account when deciding on compensation packages.
  • Engineering is a key hire. That field accounts for nearly half of payroll spend in companies valued between $1 and 10 million.
  • Terminations rise. Across all of Carta’s platform, involuntary terminations made up 29 percent of departures in May 2022 (the rest were employees leaving their jobs by choice). That’s nearly double the 15 percent termination share recorded in August of 2021.

Considering bullet #2, the Carta report also identified four tiers of cities based on the compensation that they pay tech workers. There are four Tier 1 metros in the U.S. – San Francisco, San Jose, Seattle, and New York – and employees in those regions can expect to receive the highest pay packages. Tier 2 metros are defined as compensating at 90 to 99 percent of the Tier 1 metro areas, with Tier 3 paying 80 to 89 percent of Tier 1, and Tier 4 compensating at 79 percent or below.

Nashville and its surrounding communities like Franklin and Murfreesboro are right at the edge of being in Tier 3 at 80 percent. By comparison, Atlanta is at 84 percent of the Tier 1 compensation, Charlotte start-ups pay slightly higher at 85 percent, and two other Southern tech hotspots – Raleigh and Charleston, SC – pay 76 percent and 63 percent respectively.

A lengthy summary can be found here.

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