It’s good to be a Spotify employee. The average annual compensation for a full-time worker at the music streaming company was €151,180 ($168,813) last year, according to the firm’s latest accounts, published yesterday (May 23).
Spotify added 300 more staffers to its payroll last year, compared to the previous year, taking its headcount to 1,610 full-time employees. The compensation figures the company reports include salaries, pensions, social security expenses, and share-based payments.
Average compensation per employee has been climbing at the company, in tandem with revenues, even as its losses continue to widen. In 2010, average compensation was just €60,000 per annum. Losses, meanwhile, grew from €28 million in 2010 to €173 million last year.
Of course, these averages are company-wide, and do not account for the pay gap between most employees and upper management. Removing executive committee and board compensation from the total compensation bill reduces the estimate for the average worker’s compensation to about €140,000.
Spotify’s executives and its board received €16.9 million in compensation last year, out of the company’s total 2015 compensation bill of €243.4 million. That’s four times the amount paid out to the company’s top echelon in 2014, and it accounts for a big chunk of the extra €63 million that showed up on 2015’s total compensation bill, compared to a year before. (Average compensation rose only 13% in that period.)
Spotify is still losing money, but at least those losses are slowing. It lost €170 million last year, which was €10 million more than in 2014. At the same time, it grew revenues by about €900 million. Compare that to the 2013-14 period, when its losses jumped threefold on the back of revenue growth of about €260 million.
A big reason for Spotify’s unprofitability is because it pays out a great deal of revenue to the music industry. Most of the millions it earns in revenue flows out as royalties to record labels. Of the €1.9 billion it earned last year, €1.6 billion was spent on royalty payments.
Why is Spotify’s wage bill growing so substantially? In its note to investors in its latest filing, it offers an explaination: “We depend on key personnel to develop great products and services, as well as operate our business, and if we are unable to retain, attract and integrate qualified personnel, our ability to successfully grow our business could be harmed,” the board writes. “If we cannot maintain Spotify’s culture as we grow, we could lose the innovation, teamwork and focus that contribute crucially to our business.”