VDP 108 [Governance] - Compensation Review

[Taliskermalt]

Summary

This proposal initiates the annual review of compensation and governance allocations as required in VDP-72, and seeks to appoint a review squad made up of resources with verifiable experience in compensation design to review the compensation and governance allocations defined in VDP-72.

The output of the review will be a report back to the community with proposed adjustments to VDP-72 for community vote.

The deadline for the completion of the review is September 7, 2023.

Team

Todd White, Paul Kohlhaas, Alex Dobrin

Motivation

VDP-72 outlined a compensation framework for VitaDAO which addresses the different types of contributors and their roles and opportunities for both compensation as well as governance allocations.

VDP-72 requires that an annual review be conducted to reassess compensation for the following year, and while VDP-72 itself was brought into force earlier this year, the annual review was intended to align roughly with VitaDAO’s anniversary of June 23rd. The basis for the current figures in VDP-72 were based on work done between July 1, 2022 and December 2022.

Additionally, as part of the review, there is a desire to have a more holistic view of compensation for VitaDAO within the context of the wider web3 eco-system and startup biotech organizations.

This proposal initiates the annual review of compensation and governance allocations as contemplated in VDP-72, and seeks to appoint a review squad made up of resources with verifiable experience in compensation design.

Specification

1. This proposal serves as notice to the community that VitaDAO is seeking expressions of interest for participation in the compensation review squad.

2. The squad shall consist of a minimum of 5 and no more than 9 members.

3. Squad members shall self-organize and may request support from the Coordination Working Group including access to historical data, and other information deemed relevant.

4. Squad members shall receive a bounty which shall be established as part of the VDP enacted as a result of this review.

5. Governance allocations under the L-TIP program of VDP-72, Appendix E shall be paused effective July 1, 2023 until the completion of this review and any subsequent changes are implemented. Governance allocations will be allocated retroactively based on the results of this review. Amounts vesting under VDP-67 and VDP-97 are unaffected.

Implementation

1. Interested parties shall send an e-mail to compensation@vitadao.com by July 14th, 2023 indicating their interest in participating, and providing a brief bio identifying their experience in developing and administering compensation policy and design. References may be requested to verify this experience.

2. The pre-qualified candidates for the squad shall be presented to the community on July 18th on Discourse, and move to a ratification vote on Snapshot.on July 22nd

3. The target start date for the squad is on July 29, 2023.

4. The squad will be required to report to the community on or before August 22, 2023.

5. A community call or other engagement with the community to discuss the report is anticipated on or before August 25th.

6. Any proposed changes to VDP-72 will be put forth in a proposal to be published on Discourse on or before August 29th, for ratification by tokenholders by on-chain vote via Snapshot.

Timeline

• Expression of Interest to Participate in Compensation Squad July 14, 2023
• Announcement of Pre Qualified Candidates on Discourse July 18, 2023
• Ratification Vote on Snapshot for Squad July 22, 2023
• Squad commences work July 29, 2023
• Report from Squad due August 22, 2023
• Community engagement/call August 25, 2023
• VDP Proposal to implement changes August 29, 2023

• Agree
• Revisions Requested (Detail in Comments)
• Disagree

[vincent]

Great work on the proposal, @Taliskermalt, @PaulHaas, and @alexdobrin! I believe it’s crucial to periodically review and update our long-term compensation and incentives to ensure they align with VitaDAO’s broader vision and strategies. This proposal could be a great step in the right direction of improving our overarching compensation and incentives through the upcoming OBRA proposal.

There are a few additional considerations I propose we include:

1. To maintain objectivity, those serving on the compensation committee shouldn’t directly benefit from the plans they propose. Active contributors are welcome to provide input, but they shouldn’t make the final decisions on compensation plans, especially those that may apply to them, aside from those that receive a bounty for this compensation review work.
2. Ideally, the squad members responsible for this task should be highly aligned token holders, without compensation, but rather strong alignment as they might represent large token holders that contributed financially.
3. The revised compensation plan should undergo public discussion as a governance proposal. However, we should respect privacy and operational security by not revealing the names of contributors.

Please indicate your views on the suggested revisions by voting in the poll below.

• Agree
• Revisions Requested (Detail in Comments)
• Disagree

[Taliskermalt]

I don’t think these are actually revisions per se:

'1) is a clear conflict of interest, and wouldn’t be allowed - it’s the whole point of the VDP to bring in outside knowledge to this process. I agree that there needs to be room for input from current contributors, but the structure of that input should be clearly defined. I would hope to take the lead from the squad as to how they wish to receive any such input.

'3) is implicit in the community engagement stage and publishing of the report and subsequent second VDP in August. It was expected that privacy and operational security would be managed by the Coordination working group and this would include a confidentiality / NDAs around wallet addresses, etc. VDP-72 currently does not name people.

On 2) I would suggest it is more important to ensure that squad members have experience in compensation design, than over-optimize for tokenholder involvement. I believe we have some parties that have both the experience and alignment, and I hope they put themselves forward for consideration. But I also think we need to leave the door open to others from outside of VitaDAO who may have the experience in other projects to step forward.

So I support 1) and 3) unreservedly. 2) I would just ask we leave the door open to people from outside out immediate sphere of influence.

[timrpeterson]

Thanks @Taliskermalt @alexdobrin @PaulHaas for putting this together.

#6 is punitive. We should remove this clause. The most active contributors are relying on USD as salary for living expenses. The issue is VITA compensation so that’s what this proposal should focus on.

[bowtiedshrike]

Agree with Tim. If the review is due Aug 30, earliest the revised policy should go into effect is Sept 15, more likely Oct 1, so that there is no disruption to current operations.

If there is a problem that warrants stopping someone’s pay before that, it should either be handled by VitaCore and/or get it’s own VDP/investigation.

[Max_Unfried]

Agreeing on Tim with that. There is not much disparity on USDC payments, as the Compensation Policy that Todd put together is quite clear.

Frankly I think there should be a linear relationship between USDC and VITA compensation.
As an example, say for each 1$USDC earned one receives 1.5$VITA - adjusted in the future for $VITA price. And performance based bonus every 6-12 months. in $VITA.

[Taliskermalt]

@timrpeterson, @bowtiedshrike, @Max_Unfried - will remove the USDC clause as suggested. Specifically:

“6. USDC compensation for all full-time and near full-time (>80% FTE) contributors shall be paused effective July 1, 2023 until the completion of this review and any subsequent changes are implemented. USDC compensation will be allocated retroactively based on the results of this review.”

Thanks for the comments.

[scienceman]

Agree with Vincent. Typically there is a compensation committee that benchmarks salaries to industry standards. Then it’s a matter of tweaking around the 50% percentile for industry.

I’m not sure if we have comps? I have no way to really gauge how within or outside of market we are?

If we paid an HR firm for comps and shared the salary bands it becomes very transparent and easy for ppl to vote.

Obviously there is no direct comp for the roles we describe, but I’m sure we can be creative and find equivalent roles to comp to.

Maybe it is a bit of overkill but VitaDAO is maturing into a multi-million dollar market cap operation. Might be a good investment for talent retention.

Happy to make an intro to some of the HR firms we use in Pfizer Ventures if we go this route.

[proofofsteve]

@Taliskermalt

2. The pre-qualified candidates for the squad shall be presented to the community on July 18th on Discourse, and move to a ratification vote on Snapshot.on July 22nd

Was this ever posted?

[Taliskermalt]

Unfortunately, due to summer vacations and coordination around other events the schedule has been revised:

• Squad commences work August 20, 2023
• Report from Squad due September 7, 2023
• Community engagement/call September 10, 2023
• VDP Proposal to implement changes September 15, 2023