Profit Sharing Program

Given that we have zero intentions of either selling the company or taking it public, the concept of employee stock option programs just doesn't resonate with us. Rather, we've established a quarterly profit sharing scheme, enabling our team members to reap the benefits of the company's profits consistently over time.

This program is (almost) literally copied from our friends at Balsamiq who have been successfully using it since 2010. Kudos to them for conceiving it!

DatoCMS's Profit Sharing program

Our quarterly bonus program allocates 6% of adjusted profits to "staffers." Of this, 25% is split equally and 75% is split based on seniority.

Let's break it down:

• Our quarterly: we pay out bonuses 4 times a year, at the end of March (for Q1), June (for Q2), September (for Q3), and December (for Q4).
• bonus program: it's a bonus program, meaning that it can change or stop in the future depending on how we do. Basically, it's gravy.
• allocates 6%: six percent of adjusted profits is extremely generous while still responsible for the financial well-being of the company. Note: this percentage might change, the goal is to strike a balance between giving everyone a noticeable bonus and not stretching our cash-flow too much.
• of adjusted profits: using profits is better than earnings (like we did at first) because it encourages all of us to limit our expenses. We take the gross revenue and remove all the "normal" expenses: operating costs, taxes, previous bonuses given out as part of this bonus program. It is worth noting that the dividends taken by DatoCMS partners do not affect the bonuses of the program.
• to "staffers": bonuses are for people who work more than 20 hours/week (50% time) for DatoCMS who are permanent employees or have a long-term external collaborator contract with us. However, part-time employees working less than 20 hours a week and contract workers later hired will receive seniority points for the days worked (see below).
• eligibility date: You are eligible to start receiving a profit-sharing bonus as soon as your probation period ends. The total bonuses granted each quarter are divided among all staffers who worked during that quarter, even if the bonus pertains to a previous period in which the staffer did not work. To streamline the program management, bonuses are only distributed if the collaborative contract is still in effect at the end of the quarter. In other words, there is no proration of the bonus when the collaboration concludes (but there is when you start!)
• based 25% split equally: this is good because it promotes a team spirit: while the majority of the bonus is weighted towards time spent in the company, this portion of the bonus is equally shared by all employees. This gives a nice incentive for everyone to be fully part of the team, even when they are just starting with DatoCMS. It will also be good down the line for a new employee who will take much longer to even out with the seniority of current staff.
• and 75% on seniority: this is good because it smooths out the impact of new employees, and evens out over time. Also to note how this is NOT based on salary / skills. We're all members of the same company and we're all equally responsible for the success of DatoCMS. In addition, nothing forbids us to also give out other merit-based bonuses as well. Note: if a staffer works less than 100% of their time for DatoCMS, their seniority will be adjusted.

OK, so that's the program and the philosophy behind it.

How we calculate seniority

This is the number of days at DatoCMS since qualifying for profit sharing as a staff member (since starting to work more than 20 hours/week as a permanent employee or signing the long-term external collaborator contract), with possible addition of days from previous contract or part-time work. If a staffer works less than 100% of their time at DatoCMS, their seniority will accrue at a rate equal to their % of time.

Over time the difference in seniority goes down as we all become senior. This means that in the long run, bonuses will even out for everyone. It also means that the addition of a new employee does not dramatically reduce everyone else's bonus right away.

Example

Bonuses are shared to staffers via a simple spreadsheet within the first quarter of each year. To further clarify how it works, here is an excerpt from the spreadsheet related to the 2024 bonuses: