The pay problems of a fintech with too many top performers

Fintechs are capable of attracting top talent, but can you have too much of a good thing? Speaking at the 2023 fintech festival, Samuel Rhee, former Morgan Stanley investment management CEO and co-founder of WealthTech firm Endowus, said it can be a "challenging scenario when everyone is a high performer."

People join fintech for the culture, but high performers are demanding. Rhee said they want "career growth, higher base pay." But there's only so much money to add to the wage bill and only so many promotions to go around.

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Endowus rectifies this with "distributed ownership." It gives staff opportunities to "buy in" and "own more of the company." Rhee jokingly said, "we hire them, then we take their money." Endowus partnered this month with Carta with the aim of giving employees more regular opportunity to provide liquidity and access. This means stock owners have a far greater chance of getting their cash back than they would get at another private fintech. 

While this structure can "create a much more stable environment," it's an inherently risky practice that has backfired on multiple occasions elsewhere. Publicly traded crypto firm Coinbase saw over $1b of its equity compensation go up in smoke after going public and even Stripe had to halve its valuation to allow its employees to cash out.

Business appears to be booming for Endowus. In August, it announced a funding round of $35m, an amount higher than the $25.6m it raised in its previous funding round in 2021 amidst the fintech boom.

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