The founder’s guide to talking about pay (without losing trust)

Talking about money is one of the hardest and most revealing things a founder does.

Whether it’s negotiating with a co-founder, hiring your first team, or explaining why budgets are tight, conversations about pay shape how people perceive your leadership. 

They send signals about fairness, transparency, and culture that echo far beyond the payslip.

The problem is that most founders stumble over it. They either overpromise to land talent, hide behind secrecy, or defer the issue entirely. Each approach damages trust, which is the most expensive resource you’ll ever waste.

This post is about doing better. It shows how to talk about pay with confidence and empathy, explain constraints without undermining belief, and use ownership as part of the story, not a substitute for it.

Why pay conversations go wrong

Founders often start with intentions of fairness, ambition, and frugality, but those values can clash under pressure. 

When you’re juggling cashflow and growth targets, pay discussions can quickly become defensive or inconsistent.

Three common traps cause the most damage:

1. Overpromising. Promising higher salaries later to secure a hire now, without a clear plan or criteria for when that will be. 
2. Secrecy. Keeping pay structures opaque to avoid tension, which can often have the opposite effect. 
3. Deferral. Pushing the issue down the road, assuming everyone will be happy with that.

Each of these erodes credibility. People might not expect high pay in an early-stage startup, but they do expect honesty and logic.

In our Employee Retention Report, transparency and fairness ranked among the top three factors influencing team loyalty, alongside equity participation. 

That reinforces the simple truth that people stay when they understand why they’re valued, not just how much.

Pay conversations don’t always fail because of low numbers, it’s often about poor communication.

Be honest, but keep optimism alive

Being transparent about limits doesn’t mean underselling your company. Founders often fear that explaining financial constraints will dampen enthusiasm, but handled well, it builds credibility.

Start with context. If salaries are lean, explain where the money is going, whether on growth, product, or team expansion. People respect strategy more than vagueness.

Then connect pay to potential. Talk about milestones, not promises:

• When we hit X in revenue, we can revisit this band.
• Once we close the next round, we’ll expand benefits here.

You’re showing that compensation grows with progress, not emotion.

This balance of transparency and optimism is what investors call earned confidence. It reassures people that you see the reality clearly and still believe in the outcome.

When you acknowledge limits without losing belief, you model the same resilience you expect from your team.

Bring share schemes into the conversation

Share schemes can be a valuable cultural signal. It tells employees that we’re building this together, and everyone benefits when it succeeds.

When used thoughtfully, ownership can bridge short-term pay gaps without creating resentment. 

But to do that, founders must treat it like part of total compensation, not a vague perk.

Explain clearly:

• How it works (share type, vesting schedule, exit value).
• Why it matters (alignment, wealth creation, ownership effect).
• What the future could look like (examples, scenarios, transparent modelling).

Our research has found that 95% of companies offering equity reported higher retention and motivation, and that ownership directly improved collaboration and productivity.

When you explain equity as a shared reward for shared belief, it reframes the conversation.

Apply consistent logic

Founders often underestimate how much employees compare. If one pay rise feels arbitrary, it can unravel months of goodwill.

That’s why consistency matters more than generosity. Every decision should follow a clear logic, even if the outcome varies.

Ask yourself:

• Can I explain why this decision was made in one sentence?
• Would that explanation still sound fair if shared publicly?
• Does it align with how we’ve handled similar cases before?

This is where founders can borrow from companies like Buffer, which built its reputation around a fully transparent pay framework. Its salaries are public, linked to a formula based on role, experience, and location. 

The system isn’t perfect, but it’s predictable and defensible.

Transparency doesn’t have to mean publishing pay, but it does mean eliminating mystery. If you can’t explain the logic, you can’t expect others to trust it.

Consistency builds credibility. Even imperfect systems are better than opaque ones.

How to structure the conversation

Whether you’re hiring, reviewing pay, or aligning with co-founders, use this framework to keep difficult conversations constructive:

1. Lead with context. Explain the current financial reality and priorities.
2. Acknowledge emotion. Recognise effort or concern. Don’t deflect it.
3. Connect to vision. Reframe the discussion around shared goals, not short-term trade-offs.
4. Offer clarity. Outline next steps or milestones. Uncertainty breeds more frustration than low numbers.
5. Follow up in writing. Document what was agreed, even informally. It prevents confusion later.

Handled this way, pay conversations shift from transactional to relational and  become part of the ongoing story of how you build together.

Summary

How you talk about pay is about leadership as much as finances.  Every salary discussion tells your team what kind of company you’re building and what kind of founder you are.

People can forgive low pay but they can’t forgive inconsistency, secrecy, or false promises.

When founders talk about pay with clarity and empathy, they’re really talking about trust,  and trust compounds faster than any salary.