Twitter Tries to Be an Employer You’d Tweet About

 Twitter spent much of 2013 preparing for its November initial public offering, meaning

it became a publicly traded company, selling stock to investors. That change had some big HRM
implications. First, the influx of in- vestment money enables a company to grow, and in the
months leading up to the IPO, Twitter hired 300 employees, bringing its workforce to 2,300. Also,
engineers and other employees who received shares of stock as part of their compensation could
suddenly become rich if the stock value rose significantly, as expected. They could become millionaires, and if
they did, would they stay with the company? The HR challenge would be to keep attracting and
retaining hard-to-replace talent. Pay levels have played an important part in meeting the
challenge. Based on salaries employees share on the Glassdoor website, Twitter has been
generous. Among companies where 50 or more software engineers told Glassdoor their salary, Twitter
had the fifth-highest pay, averaging $124,863. At the top of the list was Juniper Networks,
paying $159, 990, followed by LinkedIn, Yahoo, and Google. Other big names paid less; the average at
Apple was $124,630, and Facebook paid $121,507. They still outspent the average of around
$100,000 to $112,000 paid to software engineers in San Francisco, where Twitter is
located. Twitter is operating in an expensive labor market. Software engineers are in general a
high-demand, high-pay occupation. The number of Bay Area start-ups and growing complexity
of technology have been fueling demand. Also, according to Glassdoor’s data, San Francisco is the high-
paid location in the United States. That situation is unlikely to change as long as the cost of
living in San Francisco remains high; that $124,000 salary buys very modest housing in
the area. Along with these challenges for paying softwareengineers,Twitter faces the struggle to 
find and keep top executives. It paid Christopher Fry, the senior vice president in charge of Twitter’s engineers,
$10.3 million in the year of its IPO, close to the earnings of CEO Dick Costolo. Most of that
compensation was in the value of stock awards; Fry’s salary was $145,513, and he received
bonus pay of $100,000. Other high-level executives at Twitter received similar compensation. Chief
financial officer Mike Gupta earned the most, receiving $24.6 million (including a salary of $250,000)
for leading the organization through the IPO. For his part,
Fry was considered invaluable because Twitter’s survival requires that the site operate reliably,
especially during this time of expansion.

Questions
 1. Do you think the levels of pay described in this case contribute to Twitter’s business success? Why
or why not? 
2. Suppose you work in Twitter’s HR department, and the company’s executives ask you to try reining
in the spending on salaries. What would you recommend?
 

 
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