RFC Compensation Plan with Bonus Structure
Will reply to what maybe hasn't been addressed in 1 post to keep it organized.
1. The runway example is an extreme one, because if you achieve all the OKRs it's hard for the DAO funds themselves not to grow, thus increasing runway.
2. Council won't be double-dipping. We however have not been given authority for the new budget proposal yet, so are continuing to receive the pay we had as Strategos and indigo as an engineer until then. Once voted on, the Council will be on the approved plan.
3. The OKRs you keep mentioning were posted as a RFC and were not voted on. Furthermore, they were 1 year targets vs these targets that are 6m. We can obviously discuss them, but setting OKRs that are too high and tying them to comp can be very demotivating for contributors, so lets be realistic.
4. Finally, we are nearly finished with a new Subgraph implementation that will showcase all this data in a clear and transparent manner, as we've always aspired to do. Really don't appreciate the comment about the DAO trying to obfuscate something, when OlympusDAO is one of the most transparent protocols when it comes to contributor comp and treasury allocations.
Finally, thanks for the comments. Figuring comp out has been a huge struggle for the DAO and I hope we can work something out so that everyone is happy.
shadow Thanks for the feedback. I do agree that the team are super and doing a great job & should be rewarded as such. Setting and monitoring realistic targets, deliverables and having all the checks in-place for bonus remuneration is very important. Open engagement, debate, queries should be encouraged by the community.
#3: Could i make a suggestion for inclusion of a OKR specifically for Council, based on the approved OIP-91, relating to https://snapshot.org/#/olympusdao.eth/proposal/0xf90119baf2b7bca681d41ec611e093363dcff38ff5efa1c3aada55da91aac3a5, specifically around the 2 following requirements from Council as a 'MUST'.
a: 'Every 3 months the OGC must prepare a quarterly report detailing the achievements, operations, revenues, and expenditures of the DAO for the previous quarter - along with a detailed description of the strategic direction for the DAO and how the Council plans to achieve that vision.'
b: 'The Council must appear before the community to deliver the quarterly report and answer questions concerning its details.'
Bonus amounts
The communications around 3,3 and high APY's set a tone, and expectations. But our backdrop is now a 95% drawdown from the peak. This is pain for 3,3. Ultimately, the buck stops with someone. And in this case SO could only be considered to be the DAO even if it feels unfair. The Gainz chart is further giving an update on where the 3,3 community stands in terms of pain:
With this as context, awarding the top with a possible half a million USD feels rich. Half a million buys 3 family villas from where I come from, and probably like 2 Ferraris from where you come from. And that's a bonus achievable in a time period of 6 months from now with this backdrop?
I find the base level salaries to be high, but to get good people that is very competitive and attractive for the best. The bonus level however is out of touch with the real world, the community, and with the quality and the value of what has been delivered to the market. If you are losing top resources because the compensation is too low, just announce it and we will see if we cannot scramble appropriate replacements. Just ensure that proper hand-over documentation is continuously being maintained by every key resource so that we have something to put in the hands of new contributors. Also remember, these amounts will eventually hit the market as sell orders and not only drain DAO funds but drop market cap too.
Bonus goals
The reason for conditionality is that bonus should not be a given. If so, it should be part of base salary and not referred to as bonus. Bonus is not a right. Getting to top 90 plus increasing Treasury at same time is a challenge as it requires Olympus to be better than other projects, rather than just riding the market. Don't know how to explain myself clearer.
Runway
The compensation model needs to rest on a plan for transitioning to being sustained from revenue and not assets. Runway should be indefinite. If we cant get to sustainability, then why are we burning assets at all?
Compensation payouts @shadow
Why my tone.. I know there are very detailed google drive docs, but I think we should be able to follow DAO payouts on-chain. On-chain I would expect to see monthly recurring patterns of payouts corresponding to the compensation framework in number of transactions/contributors and value. I would expect to be able to track the exchange rate of currency conversions to verify that it is aligned with the decided framework and monitor said runway. But when I look at DAO address I get:
Tokens I dont even know of. This is not easily understandable to me, or am I dumb. And the swaps that take place downstream do not help at a glance. Of course I wonder what are Acropolis DAO tokens? How are ODY used and swapped? These are bulk transactions possibly one per compensation and contributor? Or maybe you bulk it in initial trx's and then explode at later stage.. Pls dont answer here, just make it so we dont need to use specialized software to audit or spend hours to puzzle it together.
Suggestions
1. Bonus goals should all require stellar performance by the project - not just fall out depending on what market does
2. Include Gainz chart as bonus condition: a majority of the 3,3 community should be over water for any bonus to be paid out - but the past needs to be left as past at some point - so take January 1, 2022 as the snapshot. Rolling snapshots would be the best ofc.
3. Work on transparency - Information scattered on google drives, unreliable dashboard, outdated dune charts, monthly reports written like sales pitches. So much effort, yet not much credibility. What can I trust? Where should I look? I want to trust.
BTW: We work 24/7 because we love what we do, and the people we do it with. Not because of over-the-top monetary bonuses.
I think I have written enough now. Probably just reiterating my points over and over.
Appreciate the detail laid out in this RFC and think it's a step in the right direction on several levels - most notably to give consistent contributors a level of assurance they won't get rugged from month-to-month and thus can continue focusing on Olympus without immediate concern for their livelihood.
My main feedback is on the council comp proposal. Note: I'm excluding engineering council members (aka Indigo) in my comments below as engineers are on a different scale and agree they should get paid more.
Base: Council Members paid a level 8. TBH the pay levels are so subjective I don't have an opinion here. Likely somewhere between a 7-9 makes sense. So why not an 8.
Bonus: Assuming a pay level 8, Council Members have 6.26x greater bonus oppty than a non-council member. Compared to a non-council member earning a pay level 10, Council Members have 5x higher bonus opportunity as proposed.
This doesn't seem right.
If the argument is Council Members are burdened with extra responsibility and thus should receive outsized upside, I think the counterargument is the activity of the DAO has decreased dramatically over the last few months. So while I acknowledge there are new responsibilities asked of Council Members (here: https://forum.olympusdao.finance/d/1156-oip-91-olympus-governance-council), I think the net level of responsibility/activity for Council members is likely neutral. In other words, I view the Council member responsibilities as justifying the 7-9 pay level mentioned above and don't view these responsibilities as justifying a bonus difference vs. everyone else as proposed.
In summary, I think a 5-6x bonus difference between Council and non-Council members is not the right approach. I would support up to a 2x but can't justify going above that.
Let me emphasize, this isn't personal at all. I enjoy all the members of the council and know a lot of thought went into getting this RFC out the door. The purpose of an RFC is to do just that, get comments so we can hopefully make proposals better.
+1. Support and very well written.
I would recommend that this be revisited every quarter by the governance council and compared to DAO runway.
even tho all KPI's are met and funds would grow, burning through 30 mil in 2 years is real ouchh.. Maybe lower base pay in bear, and make bonus higher once funds start pour? You cant burn now when its low income, you burn it when you have cash flow.
geez, great stuff n discussion all points considered… standing by
I think this is a strong first step and important to the longevity of the project. As a DAO is decentralized, having a decentralized work force creates it's own set of unique problems so I see incentivizing people to make a career working on the project as a good thing. If we don't, we end up with disjointed ideas and organic code that has to be patched together because a person left and a new person came. Decentralized doesn't mean disorganized but in order to create strong pillars and a healthy platform, we have to have people stick around and build for a reasonably long term.
Tying bonuses to OKR's and allowing for work contracts make sense to me. I do agree with lipman on a bit of scrutiny to the bonus scaling of Council. A 5x Bonus seems steep. I'll support a higher pay scale but if we're introducing bonus then I think an equitable scale that more evenly covers the team would incentivize driving towards those OKR's rather than hard work for 1/5th the return.
Otherwise, really excellent work and creating a more long term and equitable comp structure.
- Edited
Lienid - In this currently unregulated world, yes people have walked away with millions for doing very little, skewing the numbers for what is market value.
If you want a large bonus, you set a very high target to achieve, the targets identified seem very easy to achieve and on a market turn, inevitable.
FD_ I respectfully disagree. Giving dedicated contributors fair and clear compensation in a bear is the way to make it through, it will allow us to keep shipping products.
Keep in mind that there are a number of contributors (myself included) that do not sell their comp. So I think it's important to take that into consideration when evaluating the perceived drain on Olympus when it comes to compensation payments.
This framework helps all contributors set their sights on a common goal and that will ultimately be a net benefit to all holders.
2 things come to mind;
you get what you pay for
pay me know or pay me later
We have an amazing group of people that work here. I for one would like to keep them here. I would like to have the compensations for work to be competitive and fair. I have very little knowledge of what the core team must do to keep this DAO up and running. My want is to keep OHM growing and to kick ass for a long time. Some people think they can just treat our workers like shit because they can be anonymous, says a lot about the person talking shit. Our people are amazing, keep them pay them. I for one don't want to loose them!
Very much in favour of a bonus framework and I think the simple goals are clear and easy to measure. Can you clarify what is meant by sliding scale? E.G if we are 10% over premium on 12/31/22, will 50% of a bonus be paid?
Measurable goals are one half of a good bonus structure but the other half is working out who should get said bonus. Is it the case that if goals are met ALL DAO members get paid a bonus?
We're reliant on leaders measuring the value of contributors, but who is measuring the value added by council members? From a community perspective we have very little insight in to who is doing what. It's feasible that one council member adds little whilst another makes a big impact. DAO members will have much better insight in to this, would the council be open to their bonuses being voted on (individually) by DAO members before being awarded?
To respond to a few of the points/questions above in a consolidated manner I'll lay out my thoughts here:
@gordob, no there will not be council and department pay and bonus. It is just council/stratego comp with potential bonus, nothing reflecting on the department scales.
As mentioned above the Quarterly report is already a work in progress and will be presented to the community with the ability for questions to be asked, likely during a community call. The second quarter is not yet over, so the report details won't be presented until next month.
@bubbidubb I think i've done everyone a disservice by placing a potential annual allocation and bonus chart on this page instead of modifying them to show a 6 month time horizon when presenting goals for a 6 month time span. I think I should change those graphs when this goes to OIP.
-The base levels and bonus do not seem to be too high imo having read through 100's of currently active job postings in the space but maybe that's a poor measure of market rate. I do know that constant churn is most costly as a whole due to the time to properly onboard someone and have them get up to speed with the way things flow in the DAO. Having to re-work processes due to contributor churn is a waste of effort and sets back innovation.
-Bonus is not a right, which is why there are metrics tied to it vs having it be a part of base compensation. And having never had a bonus plan in place I think all DAO members are fully aware that it is something to be earned.
-The point is that it is not riding the market, the 4th metric specifically ensures that we have to preform better than other protocols in the same market conditions. I really like this metric because it challenges improvement regardless of market conditions.
-you can follow DAO payments on chain and I do so often when there are questions about allocations after they've shipped. I'm not sure what you're looking at but it's fairly easy to see the payouts on etherscan.
-I appreciate your suggestions and want to let you know transparency is constantly being improved in the dao.
@lipman
Council and stratego comp are included at the same level in this proposal. I see you calling out Indigo, but feel that we also need to highlight Apple as well. As you've noted, engineers are on a different pay scale- to be completely honest, this made all iterations of the comp and bonus proposal much more difficult. There are probably 15-20 variations in my trash file right now because trying to reduce comp for strats and council while still incentivizing participation AT ALL, for the greater risk and responsibility of these roles, let alone for members of the engineering team, is not an easy task. I see you mentioning 5x and 6.26x, but see you've failed to break down the actual discrepancy between the total end payouts.
-Between a general contributor and council/stratego the max yearly difference is 2x
-Between an engineering contributor and council/stratego the max yearly difference is 1.4x
Let's keep statistics as accurate as possible and view both sides of the coin here. I can only speak for myself but I know that I am not contributing at an "8" level. If I were not in a position of leadership and carrying the responsibility of being accessible nearly all hours during the week and going above and beyond for Olympus, I could contribute meaningfully to more than one DAO and out preform not only base comp, but total proposed council bonus as well. (not to mention be comped in a mix of stables and native tokens, and take true vacations where I can unplug vs checking in even on a rare "off" day) This threshold is further easier for engineering contributors like Indigo and Apple to achieve. I personally, selfishly, don't want them to be in that position. I appreciate the hard work that is being done for the DAO and think we will be worse off as a protocol if we don't encourage them to stay. There's a non-zero chance that I am putting in more hours and delivering more, while adding additional responsibility and risk, for a net financial loss by the time December rolls around. It's a harsh reality, and from a strictly logical standpoint perhaps a foolish decision, but, I'm okay taking the risk because I believe in the future of the protocol and am confident we can make strides forward.
Maybe it is helpful to include that we explored versions of comp/bonus that eliminated base comp at all for council but quickly decided against this, even though there are members of the council who would be better off for it if we were to hit all targets, because it would limit potential members of the council to people who are above a certain financial threshold. Limiting the inclusivity seemed counter to what we are trying to accomplish.
The activity of the DAO has concentrated, not necessarily decreased, and I would argue that this lead to those remaining taking on additional responsibilities vs an abundance of free time. But please let me know if I am missing something because I don't have 100% insight into every activity and want to make sure I'm not strictly viewing things from my own personal perspective.
@FD_ I see that droo has replied here already but wanted to highlight that previously the DAO was burning through around $1.3M/month in contributor allocations alone, not including other expenses like audits/bug bounty/etc. I'd prefer that we set a steady cadence of allocations so that we retain contributors, and then during times of bull runs keep levels within the set framework and increase reserves vs scaling comp at that point. I think it would lead to overspending during good times, and poor retention/ lowered efficiency and output during the bad.
@Relwyn
I left comments above to lipman regarding the discrepancy being 2x for non engineers and 1.4x for engineers. It is in fact a lower pay scale, with bonus. You're suggesting to change that to increase base comp and lower the bonus level?
@kleb thanks for you comments!! Sliding scale, yes, so in your example if premiums are 10% higher than backing on 12/31/22, that's 1/2 of the targeted amount of 20% premium, so 50% of the 30% weighted amount for that metric would be allocated.
If that metric were to be fully hit at 20% premium, but none of the other goals accomplished, only 30% of the bonus would be distributed, because that is the total weight given to the premium in the above table.
Correct, all DAO members get the bonus based on the same sliding scale with the distributions listed above. Again, it's shown in 12m time frame when these are 6m goals so its 1/2 the value that's listed there. I need to change the tables.
Council members were voted on and will return to vote, the lower base allocations help to remove the month-to-month allocation discussion, and the bonus is tied to performance so that helps in my mind to ensure value is being added. The voting idea is something I've thought about, but also have concerns about. I think you saw the mess that happened with coordinape and voting/distributing points that way, it incentivizes loudness and competition against each other in a zero sum game instead of teamwork. Which is ultimately what is needed as a whole, we each bring different skills sets and talents so it's not as easy to compare and contrast. I like the idea in theory but worry about how effective it will be in practice iykwim.
You make a ton of good points, per usual. Also think you may want to prioritize work/life balance but that's for you to decide 
The "8" comparison was comparing the Council base pay to non-council base pay of the same $ amount. Let's leave that aside though as I think it's distracting from the point.
My main point is I don't think Olympus should create different classes of contributors for pay, which this proposal does. The DAO already has a system for base pay using the 1-10 scale. Council members, Strategos, Dishwashers, Janitors, and everybody in between should get 'cash' comp based on that scale. In your example, you should receive a 9 or a 10 on the non-engineering scale based on your level of contribution. Again, some of why you're as active as you are is bc you're a Council member so that should be accounted for in your base comp.
(To add to the confusion, it's unclear to me why Council and Stratego were grouped together in the same comp table in this proposal. Is it even possible for a non-council or non-stratego to earn a 9 or 10?)
The question then comes down to bonus. While this contradicts my earlier point some, I can see reasoning for a different bonus scale for Council/Strategos to account for the reasons you mentioned in your reply but not as extreme as was originally proposed. Again, I think up to 2x of bonus seems fair.
Also, there are members of the Council who aren't as active as others in the DAO. Will all Council members receive the Council comp regardless of day-to-day activity?