100K Startup Salary Cap

Palmer Luckey shares how Oculus implemented a salary cap in the early days to maintain equity and alignment among employees.

The 100K Club Rule

• Set maximum salary of $100,000 for everyone in the company
• Applied to all employees including CEO and founders
• Called it the "100K Club" internally

Context and Background

• Palmer was making minimum wage before Oculus
• Was living in a 19-foot camper trailer at age 19
• Had only a few hundred dollars in bank account
• Previously made money fixing/unlocking iPhones on the side

Impact and Perspective

• $100K felt "incredible" compared to previous income
• Created salary equality across the organization
• Helped preserve cash in early startup days
• Aligned everyone's incentives toward long-term equity value
• Demonstrated leadership's commitment to company vs personal gain

Results

• Everyone who worked at Oculus achieved financial independence after acquisition
• Many early employees went on to do "incredible things"
• Helped create strong company culture and alignment
• Proved successful as part of overall compensation strategy with equity upside

The 100K Club rule shows how implementing salary caps in early startup days can help create alignment, preserve cash, and focus everyone on long-term value creation through equity.