In terms of Salary I would recommend a review of "Inequality at Work:
The Effect of Peer Salaries on Job Satisfaction" - . A randomly chosen subset of employees of the University
of California was informed about a new website listing the pay of University employees.
All employees were then surveyed about their job satisfaction and job search intentions.
We find an asymmetric response to the information about peer salaries: workers with
salaries below the median for their pay unit and occupation report lower pay and job
satisfaction, while those earning above the median report no higher satisfaction. Likewise,
below-median earners report a significant increase in the likelihood of looking for a
new job, while above-median earners are unaffected. Those negative treatment effects are
concentrated among employees in the first quartile of each pay unit. Differences in pay
rank matter more than differences in pay levels. Our findings suggest that job satisfaction
depends on relative pay comparisons, and that this relationship is non-linear.
On the topic of equity, it always get sticky early on. So create a pool over time from which you can reward participants on a quarterly basis for their contribution rather than giving away equity away to new employees. Set up an equity sharing pool to be allocated based on participation every quarter where the allocations on a per quarter basis are the same for each quarter allowing for early employees acquire to acquire more at a rapid rate when they make a larger contribution. Total dilution of the equity pool will not have to be discussed with each employee. Re-Negociating Employee equity percentages is inevitable if you grow, expand, and take on partnerships for funding. This pool protects the entire employee at a constant dilution rate . The "total pool" may have to get diluted, but there is no "per employee" discussion about how much they are being diluted and why, and if you refer to the salary discussion at the top of the article job satisfaction goes up with employees feel rewarded, not by the size of the reward as much as the relative rewards.