‍Welcome to the Foundation Series. I'm thrilled to have you here to discuss pay transparency. Octopus Deploy has gained quite the reputation, not just for its name but for being a standout success in the tech space. I'd love for you to introduce yourself, share a bit about Octopus, and what you've done around pay.

I'm the founder and CEO of Octopus Deploy. I started it about 12 years ago as a nights-and-weekends hobby project, which gradually turned into a business. Today, we have over 300 employees globally, primarily in Australia, New Zealand, Israel, and Ukraine, with sales, marketing, and support teams distributed worldwide in places like the US and UK. We've recently crossed $100 million in revenue, which was a significant milestone. 

Octopus helps companies with deployment automation, specifically Continuous Integration and Continuous Deployment (CI/CD) for engineering teams. Our journey has been about continuously improving how we operate, especially in areas like compensation and people practices.

What’s it like being the Founder of a company like Octopus?

Starting Octopus at 25, I feel like I’ve aged significantly in "startup years." As a software developer by background, I initially thought I’d spend my time coding and building an engineering team. However, I’ve discovered that the real joy comes from identifying what the organisation can do better and then working on those areas. 

Each year, it's about choosing the two or three things we’re not great at and focusing on building those capabilities. This process has not only taught me a lot about business but also about people and leadership, making the journey incredibly fulfilling.

Octopus first came to my attention when you open-sourced your career framework. I was impressed then by the thoughtfulness and transparency. Fast forward, and you've applied similar principles with your adoption of pay transparency. Can you share your sentiment around pay as a founder?

In the early days, we operated like most companies—posting job ads with salary numbers and hiring a few engineers at the same rate since they were doing similar work. Over time, however, we realised that as roles diversified, we needed a more structured approach to compensation. This led to the creation of defined career frameworks where each role had clear criteria and levels. Transparency became essential for us—so much so that if all salaries were accidentally printed and left out in the office, we wanted to ensure we wouldn’t be embarrassed. It wasn’t about everyone agreeing with every decision but feeling we could ethically justify them.

I love that "printer scenario"—a great way to think about transparency. What prompted you to make salary tables available internally to employees, enabling anyone to see the salary of any role at Octopus?

As we grew, things naturally became more complex, and having a more transparent and structured compensation approach helped mitigate that complexity. We introduced a matrix model with defined levels and maturity ratings like "maturing," "performing," and "exceeding." Each cell in the matrix has a specific pay point rather than a range, making it clear where someone stands and what they need to do to advance. 

This system also allowed us to normalise salaries across similar roles and ensure fairness. Sharing these tables internally gave employees the ability to see exactly where they are and identify any inconsistencies, thus reinforcing trust in our processes.

How does Octopus manage salary negotiations, given that you have a fixed salary model?

We’ve essentially eliminated salary negotiations by being upfront and transparent. During the interview process, we assess candidates against our defined roles and performance criteria. When we make an offer, it comes with a specific number based on where we believe the candidate fits within our matrix. If a candidate feels the offer is too low, we encourage them to share their market data with us; this can prompt us to re-evaluate our benchmarks. But ultimately, we can’t just raise salaries for new hires; if the market changes, we adjust everyone’s pay to ensure fairness across the board.

What are some benefits and challenges you've seen from moving to this transparent pay system?

The primary benefit is trust. Employees know they are being paid fairly compared to their peers, and managers have clear guidelines to discuss compensation without ambiguity. It reduces the “backroom” chatter about pay and ensures everyone is focused on their work. 

However, it does come with challenges, such as the need for constant communication and clarity. Managers must be ready to explain why different roles, like software engineering and marketing, might have different pay levels, reflecting market rates and job demands.

How does this transparency help in retaining employees?

People often think compensation is all about the dollar amount, but what truly matters is the perception of fairness. Employees don't want to be paid more than their peers for the same work, nor do they want to be paid less. By sharing salary bands and benchmarks, we give our employees visibility and assurance that they are being compensated fairly and in line with the market. 

This level of transparency builds trust and makes employees more engaged. If they see that adjustments are made consistently for everyone when market data changes, it reinforces their belief that the company values fairness and equity.

You’ve mentioned that this approach also helps managers have better conversations with their teams. How so?

Managers now have a concrete system to refer to when discussing compensation, making those conversations more straightforward and less about subjective negotiations. If someone believes they should be earning more, we can break down whether it’s due to a shift in market rates or because they’ve taken on new responsibilities. This approach takes the pressure off managers, who might otherwise be caught off guard by pay-related questions, and allows them to provide transparent and meaningful feedback based on a shared understanding of expectations and criteria. It shifts the conversation from "why can't I get a raise?" to "how can we align on what it takes to move up?"

What advice would you give to other founders considering a similar approach?

Being systematic and transparent about your compensation approach pays off. Founders should lean into transparency more than they might be comfortable with and assume their teams are smart enough to understand the reasoning behind decisions. You'll have to be prepared to answer tough questions and face potential discomfort, but the long-term benefits, in terms of building trust and a fair culture, far outweigh the downsides. The aim should be to create a fair system where people feel valued and motivated, and where compensation discussions are clear and based on consistent principles.

What can Heads of People take away from your experience to improve their own compensation strategies?

Heads of People need to be the guardians of fairness within their organisations. This means ensuring that compensation practices are systematic, transparent, and consistently applied. 

Be proactive in gathering market data, but also listen to your internal signals. Understand that fairness in compensation is not just about numbers; it’s about trust and open communication. By adopting a transparent and equitable approach, you’re not just paying people—you’re investing in your culture and your company's future success.

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