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One way to offset that is to make sure that team performance is as much of an incentive as individual performance.

A stock compensation helps in that regard: hiring strong individuals will help ship a better product faster and should increase the stock value. Meanwhile traditional stack-ranking and a mostly salary compensation will encourage individuals to make sure they are seen as the top performer no matter what.

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This is best - for sure; thats why I am a fan of broad equity allocations etc. The larger the company gets, the hard that can be.

But in that situation, I can give top performers more equity, but in the grand scheme of things, thats not much incremental total dilution to the average employee. We all still make more the same way - when the company makes money or is sold.

If you are at a larger company that is a going concern for a long time... it gets a bit harder and takes some more thinking.

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