Compensation stories: How Luminovo built the Rewards structures to grow the team from 35 to 200

Electronics supply chain platform, Luminovo, was founded in 2017 by Sebastian Schaal and Timon Ruban.

The founders have been bullish on company culture from the beginning – with foundational principles like performance-based hiring and cultivating psychological safety within the team having been well-documented over the years. In the early days, as is the case in many early-stage startups, they also owned compensation decisions. 

More recently, as the team began to grow more quickly, the need to formally define the company’s approach to compensation, and how it fits alongside values and culture, became more and more pressing. 

Hannah Reif – at the time Founders’ Associate, now People Lead – took on the project of formulating Luminovo’s compensation strategy and putting structures into place that would enable consistent compensation decisions as the team grew. 

For this instalment of our ‘compensation stories’ series, we spoke to Hannah to find out how she approached the project, and get a behind-the-scenes glimpse at how compensation works at Luminovo today. 

Luminovo’s values, culture, and compensation philosophy

How compensation decisions are made is heavily influenced by a company’s values, culture, working practices, and business goals – and the importance of this tailored approach is clear from Luminovo’s story.

Company culture at Luminovo: core operating principles 

At Luminovo, there are two operating principles that guide how the team works: putting people first and building great things. 

These operating principles are embedded throughout Luminovo's culture and ways of working, from how they hire to how they develop their team members.

In terms of ‘putting people first’, one particularly notable aspect of Luminovo's culture is their focus on psychological safety – cultivating a work environment where all team members feel safe to take risks. 

In his blog on the subject, Founder Timon Fuban explains that psychological safety is a vital enabler for effective working and for retaining top employees, citing research by Google too. 

Luminovo builds psychological safety through practices such as:

• Building shared understanding through communications – explanations of the concept are included in onboarding for all team members and the concept is referenced regularly in internal communications
• A culture of continuous feedback, where all team members are encouraged to give and readily receive feedback in a direct manner – with guidance on what ‘good feedback’ looks like too
• Living it through actions – managers admitting when they're wrong to reflect the desired behaviour, conducting post-mortems on failures, and encouraging feedback during 1:1s. 

When it comes to ‘building great things’, another foundational element of Luminovo's culture is their performance-based hiring approach, which supports the development of a high-performing, innovative team. 

Instead of focusing on requirements like years of experience or specific degree qualifications, they emphasise the skillset that Luminovo needs for a role and the responsibilities that will be expected, to ensure they can find the best-fit candidate.

In his blog on the subject, co-founder Timon Ruban gives the example of hiring for a Software Engineer role. Instead of a job description listing ‘good communicator with proficient Python programming skills and a Master’s degree in Machine Learning’, Luminovo might instead list ‘implement and tune state-of-the-art ML models to get the best possible results given a dataset and metric to optimise’.

Framing roles in this way also helps high-performing candidates to evaluate how the role aligns with their personal ‘opportunity gap’ i.e. whether the role will help them progress their career in the direction they want to, with the right stretch projects and growth opportunities.

How do those principles manifest in Luminovo’s compensation approach?

Hannah used these cultural principles to inform Luminovo's overall compensation philosophy, in two key ways.

Firstly, the focus on high talent density and building a high-performing, innovation focused team leads to a compensation approach that is:

• Fair and competitive to secure high performers – with salaries benchmarked at or above market rates
• Inclusive of competitive equity options, so employees benefit from company success
• Inclusive of benefits like flexible working and childcare support
• Structured to avoid inconsistencies and pay equity issues – with sub levels for performance and progression, and no salary negotiation for new hires
• Location-based to maintain competitiveness in the context of a remote-first team.

Secondly, the company’s commitment to openness and psychological safety is reflected in:

• A transparently communicated compensation approach shared internally,  to ensure employees understand how decisions are made 
• A clear level framework with defined expectations for each role to support progression conversations.

Let’s take a closer look at how Luminovo’s compensation structure actually works. 

Luminovo’s level framework

Job levelling at Luminovo centres around the question: “How much business impact does the Luminerd create?”

Employees are leveled during hiring based on their skillset, capabilities, impact, and scope of work.

Luminovo has eight job levels in total (and three sub-levels within each level, as we’ll see in the next section), with some overlap within this between Individual Contributor (IC) and Manager (M) levels:

• L1 (IC) – mostly operational decisions
• L2 (IC) – more tactical than L1
• L3 (IC/M) – focused on strategy not operations
• L4 (IC/M) – budget responsibility for a department
• L5(IC/M) – the highest level of seniority

Detailed descriptions of the responsibilities and impact expected at each level are outlined within Luminovo’s Candidate Handbook to ensure strong employee understanding.

Employees can choose between the Individual Contributor (IC) or Manager track, but the company is clear that one is not superior to the other. 

Rather, IC growth is focused on technical expertise and manager growth centres on leading people and taking responsibility for their work – different pathways, but equally valuable. 

Career progression at Luminovo

There are three sub-levels within each job level at Luminovo, which are used to denote performance and progression within that level.

The sub levels are differentiated as follows:

• .1 new: meets 75% of the expectations for their level
• .2 established: meets 100% of the expectations for their level
• .3 advanced: meets 125% of the expectations for their level – and therefore 25% of the next level.

With more details outlined in the candidate handbook, as below.

Each department then builds their own detailed progression framework with specific descriptions of the skills and capabilities required at each level and sublevel – like this example for the marketing team. 

Employees at the same level and sublevel within a role are paid equally at Luminovo (though differences in working location may lead to variances) – with no salary negotiation allowed for new hires or within performance-related conversations to maintain consistency and internal pay equity. 

This means that performance directly relates to pay progression: as employees grow and excel in their roles, they move up to the next sublevel or level, and this results in a pay increase – there’s no confusion or lack of clarity, meaning employees are able to focus on delivering and developing instead of worrying about increasing their pay. 

Luminovo’s total rewards structure

At Luminovo, total compensation = base salary + equity + benefits (+ OTE for some commercial roles).

Base salaries at Luminovo

In line with their focus on high talent density, Luminovo takes a market-based approach to salaries.

Real-time salary benchmarking data from Ravio is used to understand competitive compensation for each role and level (alongside other data sources for verification). 

Each role then has a set of ‘salary tiers’ which define how pay progression works, in alignment with Luminovo’s level and sublevels structure. 

The market median (at or above) is used to inform the ‘midpoint’ of the salary tier for each role – which is the salary given to employees at the .2 established sublevel. 

Each salary tier has a range of around 10% either side of the midpoint, with the .1 new sublevel salary around 10% lower than the midpoint and the 1.3 advanced salary around 10% lower than the midpoint.

Germany is the core location for benchmarking due to the company’s HQ in Munich, but salaries are adjusted based on location for remote employees through a ‘cost of labour’ multiplier. Market benchmarking data is analysed for each country to determine an overall multiplier which reflects the overall market rate of compensation in that country compared to Germany.

To maintain consistency and avoid inequities arising, salary negotiation is not allowed at Luminovo for new hires or for performance-related conversations. 

New hires are levelled and based on the framework outlined previously, and pay progression is directly aligned to employees demonstrating the skills and capabilities needed to increase their sublevel or level. 

When hiring for new roles, the range of the salary tier for the associated level is transparently shared within the job advert – and the actual salary offer will reflect their evaluated sublevel, ensuring consistency across the team. 

For instance, Luminovo has recently been hiring for a Demand Generation Manager within their marketing team (as of April 2025) – with a salary range of €55,800 to €70,000.

If we look at Ravio’s salary benchmarking data for Performance Marketing roles, we can see that this salary range is roughly in-line (slightly above market) with the market for the P3-P4 levels (data correct as of April 2025). 

This structured approach of using market data to build pre-defined salary tiers for each job role and level in the company’s taxonomy is vital for ensuring consistent compensation decisions for all employees.

For Hannah, a solid compensation foundation consists of: operating principles (compensation philosophy), a clearly defined level framework, and salary ranges based on market data – and that’s exactly how Luminovo’s approach works today.

Equity compensation at Luminovo

Every employee at Luminovo (affectionately called ‘Luminerds’) is treated as a long-term investor in the company who should benefit for the part they play in business success – and this is achieved through equity compensation in the form of virtual stock options. 

Key features of Luminovo's Virtual Stock Option Plan (VSOP) include:

• Vesting schedule: Shares accumulate monthly over 4 years, with a one-year cliff
• No value cap for good leavers: If employees leave on good terms, the value of their vested share options continues to grow even after departure.
• Full acceleration: If the company is sold before all shares are vested, all remaining shares immediately vest to ensure employees can realise the financial upside. 
• Low strike price: The strike price is set to the nominal value of 0.001 EUR per stock option to ensure strong financial upside for employees.

Luminerds receive a new hire equity grant as part of their initial job offer, in line with their role and level. They receive an additional grant to reflect performance and progression, as they increase their sublevel or level – to keep equity competitive against the market for their new seniority level. 

Other features of Luminovo’s equity compensation include:

• Retention grant: All employees who reach 4 years tenure at Luminovo, and therefore their new hire grant has fully vested, receive an equity refresh grant as an additional incentive for retention. 
• Cash-equity trades: Employees have the flexibility to trade base salary for additional equity options after their 1 year cliff is complete. 

Employee benefits at Luminovo

Luminovo's employee benefits package reflects their ‘putting people first’ principle, with a strong focus on flexibility, wellbeing, and work-life balance – which are also all elements that make a competitive benefits package today, so support in their high-performance culture too.

Here are a few examples of benefits offered at Luminovo:

• Mental health support: all employees have access to the Bloom mental health platform, supporting healthy work-life balance.
• Remote-first working with flexible hours and a ‘you decide’ approach to productivity 
• Visits to the Munich office fully expensed (flights and accommodation) for remote workers
• Team retreats (including an annual ‘LumiWeek’) and co-working weeks to build in-person connection within a remote-first setup
• Home office equipment funded as needed
• Flexible leave, with 28 days paid time off per year and the ability to take as many additional unpaid days as desired
• Childcare subsidies to support parents with childcare costs.

This comprehensive approach to benefits reinforces Luminovo's commitment to creating a positive, flexible work environment that supports their team's personal and professional lives.

Compensation reviews at Luminovo

As we’ve seen, Luminovo has clear and structured level and career progression frameworks – including the sublevel structure which defines how progression works within each job level too.

Compensation adjustments are directly related to job levels at Luminovo, so the only way to increase base salary and equity is for employees to develop and demonstrate the skills and competencies needed to reach the next sublevel or level for their role.

Each employee has a performance review twice a year to keep track of their progress and development, and the timing is defined by each employee’s start date rather than it being a universal review period. 

Six months after their start date the employee will receive 360 degree feedback from their colleagues, and one year after their start date they’ll have a 180 degree feedback session with their line manager which is more focused on reviewing their progression and making level and compensation changes as needed to reflect that progression – and this process continues every six months from there on.

Not only does this structured approach bring much-needed clarity to the team in terms of what their career progression and pay progression could look like at Luminovo, it also supports the company’s commitment to building psychological safety for the team. 

It’s common for companies to have a large-scale merit cycle process, where employee performance is reviewed and pay increases are made based on the outcomes. 

This process can be very stressful for employees, who feel like they need to demonstrate and justify their value. Instead, at Luminovo, the conversations are focused on performance and supporting team members to progress to the next level – and it’s already known that this is how pay increases are achieved.

Pay transparency and pay equity at Luminovo

As we saw earlier, one of Luminovo’s core operating principles is ‘putting people first’ and this includes a focus on building trust through open, honest, respectful communication.

It therefore makes sense that Luminovo is a company that values transparency – and this shines through in their startup compensation structure too.

Luminovo’s compensation approach is openly communicated to employees to ensure they understand how decisions are made. 

The same applies to job candidates when hiring too, with salary ranges transparently listed on job adverts and information in Luminovo’s Candidate Handbook on how those ranges are determined – as well as much more information on the hiring process too. 

Hannah’s personal belief is that more open conversations about compensation are needed – to build understanding and encourage fairness for employees, but also to support business performance: "open conversations lead to stronger employer branding and more productive hiring conversations."

Increased transparency supports pay equity too through bringing to light any discriminatory practices – which is something that Luminovo is also in support of. 

The company’s performance-based hiring approach ensures that the language used within job descriptions is non-discriminatory, focused on skills and objectives rather than types of people. 

Plus, the focus on skills also opens up space for applicants from diverse and varied backgrounds too – keeping the focus on capabilities rather than whether candidates have a prestigious degree, which could bias towards privileged backgrounds.

The future of compensation at Luminovo

As Luminovo continues to grow, the structures Hannah has put in place for their compensation approach will be essential for scaling the team to meet the company’s goals.

There are a few areas where Hannah is already exploring next steps to continue supporting the team effectively – including adding additional levels to their level framework, and increasing the granularity of their location multiplier by accounting for pay differences per role in each location.

But, by using the company’s operating principles as the foundation, emphasising transparency, market competitiveness, and a structured yet flexible framework for progression, Luminovo already has a compensation strategy that can scale with the team.

If you’re looking to learn from Luminovo's approach, here are a few key takeaways:

• Align compensation philosophy with company values and culture
• Create a clear and transparent level framework that defines skillsets, capabilities, and progression pathways
• Use market data to ensure competitive pay – but apply your company's principles to that data
• Balance structure and consistency with flexibility and employee choice.