Company offers sweet perk: College tuition for your kids

As a growing number of startups compete for talent with giants such as Google and Facebook, they seem to have entered an arms race of showering employees with lavish perks - whether free lunches, free housecleaning services or sending employees on free international vacations.

Now the chief executive of Boxed, an online seller of bulk household goods, has told employees he'll do something much bigger: pay for their children's college tuition.

About a month ago, co-founder and CEO Chieh Huang said he would set aside a double-digit percentage of his stake in the company to pay for the benefit.

"I actually don't think of it as a perk," he said in an interview, noting that the benefit will be funded by his own money rather than company funds, as well as investors whom he has asked to contribute. "I tell them I love that you're investing in me and us, but you have to value the employees as much as me."

Perk or not, what Huang is doing is certainly generous. The program covers four years of tuition (not room and board, say, or books). He said it is designed to help employees who chose to work at Boxed before the company goes public. Huang, whose decision was first reported by Forbes, said he plans no eligibility requirements in terms of length of tenure, or a cap on tuition.

Huang has started a nonprofit foundation, funded with a chunk of his shares in the company that is valued at between $1 million and $2 million, along with some cash to meet short-term obligations, to administer the program. The company now has only 12 children among the families of its roughly 100 employees.

While some details are unclear - such as possible tax implications for those who receive a grant - Huang said his goal is to give back to early employees as long as his stake doesn't significantly decrease in value. "If you're along with us for a ride, you deserve us investing back in you and your family's upward mobility," he said.

In addition to being generous, it's also unusual. Many companies help with tuition assistance for employees (companies such as Starbucks and Fiat Chrysler have recently grabbed headlines for their college-tuition programs). But funding employees' children is far less common. Only 17 percent of corporations offer scholarships for employees' family members, according to Bruce Elliott, the manager of compensation and benefits for the Society of Human Resources Management. And the scholarships that are given tend to be smaller in value and require an application.

A program such as Huang's, say Elliott and others, is almost unheard of. "Outside of higher ed, I've never seen that," said Carol Sladek, who heads up work-life consulting at Aon Hewitt.

However, it's certainly the kind of thing that could help companies stand out. Sladek said a health care and retirement plan are mere table stakes these days, and "the way to differentiate yourself is through these work-life benefits. The crazier you can come up with, the more attention you're going to get."

Huang said his chief motivation was wanting to help employees become upwardly mobile, as someone who was raised by working-class parents himself. He adds that he hasn't taken a salary in the past two years and doesn't anticipate any tax advantage for setting up the foundation. Huang came up with the idea after noticing that many employees weren't able to attend an evening company event because they had limited transportation options.

"We'd just opened the Atlanta warehouse, and I realized a lot of folks didn't have cars," he said. "I could have started doing the Oprah thing, but that doesn't contribute to long-term mobility for their families. The common factor that does was education, and that was the one that resonated most."

When asked why he doesn't just pay more, he said he felt education would have a bigger impact. "Even if we gave everyone a 50 percent raise, it's not a game changer for the future trajectory of their families."

In fact, Huang seems almost dismissive of the perks arms race among startups. "We're one of the few companies that don't offer free lunches," he said. "You won't find a lot of swag around here."

Rather, he said he's making an investment in the families of the people who's helping him get the company off the ground, one he hopes will draw other chief executives' attention to the issue of inequality. "If they don't go through college, it's not someone else's problem," he said. "As the leader of this company, it should be my problem, too."