'Refresh grant' bonus shifts from pure equity-based to a mix of equity and cash
Software giant Atlassian is overhauling its bonus scheme to introduce cash payments to its previously equity-based "refresh grants" in the wake of the SaaSpocalypse.
The revised "refresh grants," communicated on Tuesday, will also be linked to employee performance. Under the revised scheme, employees who exceed expectations of their role will receive the same value of refresh grant as 50% equity and 50% cash.
Employees who meet the expectations of their role will also receive the same value of the refresh grant, except 100% of it will be in cash.
Workers who do not meet the company's expectations are not eligible for refresh grants, according to the reports.
There will be roles that will be moving to 100% cash regardless of performance due to how their roles are awarded in the market, the reports added. This represents 15% of the software firm's staff.
The refresh grants are issued during annual performance reviews and offered as an incentive to retain top employees, according to The Australian.
The revised bonus scheme was confirmed by an Atlassian representative, who stressed that there will be no changes to base salary, annual base salary adjustments, annual cash bonuses, as well as existing equity awards.
"The core pillars of our compensation philosophy remain unchanged: we pay above market median, reward outsized impact, and continually review market data," the spokesperson told the AFR.
Impact of 'SaaSpocalypse'
The reforms to Atlassian's refresh grant scheme come in the wake of the so-called SaaSpocalypse, a crisis in confidence in the software-as-a-service (SaaS) industry following the rise of AI tools.
The impact on software providers such as Atlassian has been noteworthy, with share prices dropping as investors aggressively sold off software companies.
The Atlassian representative said their revised refresh grants aim to protect the value of shares for all shareholders.
"By being more intentional with how we use equity, we protect the value of ownership for all shareholders, including every Atlassian who holds shares," the spokesperson told The Australian.
Raising regional pay
Meanwhile, Atlassian is also raising pay for regional employees as it abolishes its two-tier pay policy that paid remote workers in less expensive areas less.
The pay system previously classified New South Wales, Victoria, and the Australian Capital Territory as Zone A where employees were paid more.
But the changes will abolish this system and deliver a pay rise for employees working outside this zone. "Several hundred workers" who Atlassian said are working outside Zone A will likely be affected by the boost, The Australian reported.
Atlassian has a "Team Anywhere" work model where employees can choose where they do their best work, with "timezone halos" to ensure that employees globally have shared time to collaborate without sacrificing flexibility.
