Raw capture — raw/the-mario-meeting.md
url: https://randsinrepose.com/archives/the-mario-meeting/ title: The Mario Meeting author: Rands (Michael Lopp) site: Rands in Repose date_published: 2026-07-06 date_fetched: 2026-07-18
Tagline: "Follow the money backward"
Review season is here, and for early-career employees, a review feels like the year's most important milestone. But they only see the compensation — salary, bonus, stock. Senior leaders must understand where that money came from and how it was determined, a process that began over a year prior.
In any given summer, two budgets move simultaneously: one being spent (this year's raises, locked in a year ago) and another being built (next year's budget).
Fall – Reviews: Employees receive a letter with words and numbers. As a Senior Leader, the number usually goes up while explanatory words decrease. Fall is the last moment the company can pay out against a budget defined a year ago.
Earlier that Summer – Talent Planning: Senior Leaders debate ratings. Employees at each level (senior, mid, junior) are placed into one of four performance buckets: Exceptional, Strong, Fine, Needs Work.
"The money you're allocating in this room was decided roughly a year ago. You are dividing up a pile whose size is already fixed."
These constraints exist to enforce a curve for ratings ("Yes, a curve" — though bosses lie about this) and to enable budgeting (X humans at Y compensation equals total raise budget).
The Lake Wobegon effect — every manager believes their team is above average — is why constraints exist: "Your team's work is vivid because you're standing next to it; everyone else's is a bullet on a slide."
A recurring peer named Mario — a Senior Director — treats Talent Planning as a budget negotiation. The core message: "this is not a budget meeting."
Occasionally hidden dollars exist from CFOs or VPs, but those were reserved for "one-off special circumstances." The job is to hit the number, not argue for more.
In the same July as Talent Planning, a separate set of meetings begins constructing next year's budget. Mario never attends.
The cascade: - Strategy meetings — Big swings from the CEO or VP of Product - Product planning meetings — Product, Design, and Engineering build concrete ideas from dreams - Finance meetings — Hard questions about costs, hardware, headcount. "Get comfortable with swags" (well-informed guesses)
Further cascade: - Finance builds forecasts connecting features, costs, and business impact - The CEO creates working groups, including a Compensation Committee that determines next year's merit budget based on finance guidance (e.g., "a 3.5% merit budget")
"Every meeting I just described happens months before anyone writes a review."
After three cycles, Mario still hasn't realized the time to argue for more budget was during Product Planning meetings, which he never attended. Mario's thinking: "I'm not a product guy — just tell me what you want me to build."
Planning meeting decisions define the budget for the entire year, and leaders who don't show up to argue for headcount growth by connecting strategy → product → features → resources will feel the consequences.
"Arguing for a budget during a Talent Planning meeting demonstrates a profound lack of understanding of how business works."
Closing warning: "as a Senior Leader, no one is going to take the time to explain all of this to you. They are assuming you will take the time to figure out how the system works."
"I'm looking at you, Mario."