Last week, Stockholm-based AI company Lovable said it would offer full-time employees a 10% pay rise every year on their work anniversary.
CEO and cofounder Anton Osika outlined the new policy on X: “Because people get more valuable the longer they stay, and they shouldn't have to worry about getting a raise or not.”
The proposal struck me as generous — and a smart way to quell the water-cooler gossip around salaries.
Employees — me included — feel something close to pain when they suspect a colleague is earning more.
The trouble is, most of us are terrible at talking about money. As Kim Scott, former Apple and Google executive and the author of business book Radical Candor, put it in a 2019 interview with the Financial Times: “We behave about money the way the Victorians behaved about sex.”
I’ve seen this firsthand. There was an experiment in one office I worked at where colleagues took matters into their own hands and voluntarily shared their salaries with each other.
It was a useful exercise to the extent that it motivated some to go after more money. But it was also traumatic to learn how far apart some colleagues were on pay. Cue disgruntled workers and a dip in morale.
Companies generally don’t like you to know how much employees earn. In fact, they work hard to make pay opaque. Some workers have gag clauses in their contract, effectively banning them from talking about pay. I recently studied the careers pages of 100 startups — almost none offered a pay range for open roles.
Lovable’s idea, then, feels like a step towards transparency and potentially a good way of snuffing out the internal salary whisper network, which can poison an office.
Just don’t expect many startups to follow.
’Not a prescription for all’
I quickly learned this was not a policy for everyone. “I’d also be comfortable doing this if I was the CEO of one of the world’s fastest-growing companies,” says Andy Shovel, who is building an AI law company called Keith. “I think it’s a product of circumstance, personally.”
Lovable, which launched in 2023, was valued at $6.6bn in December.
“The company has been raising limitless money, doing amazingly and are able to offer compensation that’s not linked to performance,” Shovel tells Sifted. “But it wouldn’t be a prescription for too many other firms, in my view.”
Orr Vinegold, cofounder of VC firm Unrest, says Lovable’s policy was “commendable”, but pointed to something he feels matters more.
“What really changes the relationship between a business and its people [is] equity access. A pay rise is welcome, and of course people need them, but the value of owning a genuine stake in something is on a different scale entirely.”
Others were more sceptical. Claire Trachet, CEO of M&A and fundraising advisory Trachet, adds: “Fixed commitments can become difficult to sustain as businesses scale or market conditions change.
“We saw versions of this during the Covid era with policies like unlimited holiday, where some companies eventually rolled things back.” Maryanne Caughey, Lovable’s chief people officer, emailed to say “we’ll evaluate and evolve the model as we grow.”
Tom Hubregtsen, cofounder of autonomous tractor company Voltrac, favours merit over tenure for compensation.
"The large majority of our people are top performers and received 10% increases within their first six months," he tells Sifted.
Lovable staff will still be eligible for merit-based topups. “We run compensation reviews twice a year,” says Caughey. “So the anniversary programme gives everyone a strong baseline, and the biannual reviews are where we address individual growth.”
‘Europeans are poorly paid’
Lovable’s announcement also reignited a familiar debate about pay across European tech pay lagging far behind salaries in the US.
“It's not talked about enough how poorly people are paid in Europe,” Zach Tratar, who works in the AI division of US software company Notion, wrote on X. “Hundreds of early folks at Stripe walked away with $10m+. Lovable touting ’10% raises’ on a base of $75k is comical.”
The cost of living in the US is higher, yes — but even adjusting for that, many Europeans come out worse.
"The biggest opportunity for talented Europeans is to move to America for a decade, then go home to retire," said Kenneth Auchenberg of VC firm Innovation Endeavors.
In response, Caughey told me Lovable “target the 90th percentile of the market for both cash and equity compensation” (in layman’s terms: it wants to beat 90% of the competition).
More pay scrutiny
Whatever its limits, Lovable's pledge will have more tech workers thinking about pay — and some asking for more. It could get interesting.
And frankly, if you’re at a company whose founder is constantly posting about record revenue, they should be ready to open the purse strings.
Finally, for any recruiters paying attention, Lovable's policy is a gift. As Todd Saunders, CEO of software company Broadlume, noted: "Recruiting hack. Offer Lovable employees a 20% raise — you know it'll take them two years to get there anyway.”
