Could Lovable’s automatic 10% pay raise be the cure for toxic cultures?

Stockholm-based vibe-coding platform Lovable is growing revenue at an astronomical rate — and doing something that few U.S. companies, startup or otherwise, would even contemplate: voluntarily promising annual 10% salary raises for all employees on their work anniversaries.

In the U.S. corporate world, employees don’t generally get built-in raises unless they’ve unionized, and even then, a 10% raise across the board is typically spread over multiple years of a contract, not delivered annually.

While most companies do have stock and profit-sharing plans, what’s different here is that Lovable is sharing the wealth as a direct raise, not contingent on vesting schedules or the employee kicking in cash to convert stock options into actual shares.

Now, it’s true that such a decent raise across the board is made easier — perhaps is only possible — at a smallish company. Lovable said in March that it had 146 employees. It currently has 78 open roles listed on its website, so it appears to be on track to reach over 225 people by year’s end.

But it’s adding revenue so rapidly that it can share the cash with those who are creating it. In some months, it has said, it grew annual recurring revenue by $100 million. Lovable claimed in March that it had already crossed $400 million in ARR and, at one point, projected hitting $1 billion in ARR by around the end of the year. Lovable launched its vibe coding product in late 2024 and has been on a tear ever since.

It’s also true that for many companies, cash may be too precious commit it to the permanent overhead of larger salaries. Equity compensation doesn’t cost them cash out of pocket immediately. That’s a big reason most startups default to loading up employees with options rather than raising base pay.

The bigger point is that this represents a reversal of how Corporate America tends to treat employees by default. The typical process is: get hired (often through a grueling, multi-step, multi-month process) and then go through annual reviews. The message is: prove your worth to earn the offer, then keep proving it repeatedly to keep your job. If you dream of raises and promotions, go above and beyond first, make your case, then … we’ll see.

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