Are Stripe employees grossly overpaid?
Fintech payments decacorn Stripe is known for having some of the best compensation packages in the industry. However, after a recent funding round slashed the company’s value by over 47% to $50 billion, doubts have been cast over whether the company is operating efficiently enough to pay such high wages.
Former financial analyst and fintech CFO Rupak Ghose wrote in the FT recently that people at Stripe seem strangely unproductive compared to employees at more established payment rivals. With 7,000 employees and rumored revenues of $2.8 billion, Stripe’s revenue per head is just $400k, says Ghose. This can be compared with close to $1 million with Visa and Mastercard.
If Stripe’s revenue per head is only $400,000, it also pales in comparison to the average salary for engineers at the firm. In 2023, according to Levels.fyi, the average total compensation per head at Stripe was $443k. Average product manager compensation came in at the same figure.
Of course, Stripe does not consist of pure engineers and product people. Sales salaries in 2023 average $218k, while data science salaries (albeit with limited data in 2023) average $194k.
The implication is that Stripe will either have to pay less or have a few fewer employees. This may be why Stripe cut 14% of its workforce late last year.
The good news is that Stripe employees may be able to sell more of their Restricted Stock Units (RSUs) after the latest funding round. As employees get an opportunity to cash out, Stripe has also hired a group of compensation program managers with the goal of redesigning its compensation strategy.
At the moment, however, Stripe’s current job listings in the US suggest that Stripe is still paying some very generous salaries. The upper salary limits attributed to now open roles are far higher than those recently registered by employees already employed by the firm.
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