Stephen Curry and the Golden State Warriors just won the NBA Championship. With players like Kevin Durant, Klay Thompson and Draymond Green, that was hardly a surprise. The Warriors nearly swept the entire Finals series, losing only game four to Cleveland. (Even though they did let that one game slip away, that's nothing compared to the story behind how Nike let Curry slip away.)
Yep: The two-time NBA champion, two-time NBA MVP, arguably one of the top four or five players in the world... just got paid like he was the 73rd best player in the league. (In case you're interested, LeBron James was the highest paid player, in terms of salary, at nearly $31 million -- and Curry's teammate, Kevin Durant, made over $26 million.)
Granted, NBA salaries aren't recalculated every year based on results. And he did make over $12.1 million for the year (plus a share of something over $4 million in playoff bonuses that gets split among players, coaches, and staff)... but still: 72 other players were paid higher salaries.
Not that you should feel too bad for him, of course. His total earnings raised his annual compensation considerably. He has endorsement deals with companies like JPMorgan Chase, Brita, Vivo and PressPlay. And his Under Armour deal has also paid off handsomely, both for Curry and Under Armour.
In total, his endorsements add up to an estimated $35 million. But those are endorsements.
Fortunately for Curry, next year will be different. Starting next season Curry's salary should be in line with his performance; the NBA's new collective bargaining agreement has dramatically increased each team's salary cap and Curry is expected to make over $200 million over the next five years. Under the "designated player exception," $47 million is the highest expected yearly salary for a new contract, an amount Golden State would be foolish not to pay in order to keep him.
Curry will stay. He can make more with Golden State than he can elsewhere. And while he probably wasn't happy to be paid by like the 73rd best player in the league when he's clearly in the top 5, that's how the world works for professional athletes. You sign a contract and abide by that contract unless your team decides to re-negotiate early, and bringing in Kevin Durant made renegotiating Curry's contract early highly problematic due to the salary cap.
So while Steph probably wasn't happy with his his four-year deal worked out, I feel sure he understood.
But that's not true for your superstar employees.
When an employee feels she is worth more, maybe you use pay scales (your own version of a "salary cap") to justify not paying her a higher salary. And oftentimes that's even an appropriate response... but not where a genuine superstar is concerned.
When you have a superstar on your staff, forget pay scales. Forget industry benchmarks. Forget thinking, "I can't afford to pay any employee that much."
You can never overpay a great employee.
You can only overpay a mediocre employee.
A great employees is worth significantly more -- to teams, to customers, and to the bottom line -- than average or even above-average employees. Sometimes they're worth twice as much, or three times as much... and sometimes even more. Sometimes the only way to truly calculate their value is not to compare them to what average employees make but to assess their actual value to your business.
Truly outstanding performers are rare. Pay your superstar not just as if you want to keep her... but as if you desperately need to keep her.
Because you do.
And because, if you don't, someone else will. And not when her NBA contract expires.
They'll pay her more tomorrow.