Force of Good

Startup Compensation

Apr 18, 2011

From time to time I get questions about startup compensation. To gain some insights into the matter I am planning to attend a special session of the Technology Executive Roundtable on Atlanta technology executive compensation tomorrow. To set the table I wanted to share some national startup compensation data.

Over the years I have found CompStudy to be the best source for equity and cash compensation for top management at technology startups across the nation. Respondents to the survey are spread out geographically pretty much like venture capital funding. Half of the companies have fewer than 20 employees and 70% had less than $5 million in revenue. For the most part these are early stage technology startups that have received institutional financing. And here, with some rounding, is what the survey said, broken into founder and non-founder comp.

Founder Compensation

Title

Cash

Bonus

Equity

CEO

 $170,000

 $75,000

28%

COO

 $165,000

 $85,000

16%

CFO

 $135,000

 $50,000

10%

CTO

 $150,000

 $40,000

13%

Head of Sales

 $150,000

 $60,000

11%

Head of Marketing

 $150,000

 $50,000

11%

Head of BizDev

 $160,000

 $50,000

7%

Non-Founder Compensation

Title

Cash

Bonus

Equity@Hire

CEO

 $230,000

 $95,000

6%

COO

 $185,000

 $55,000

3%

CFO

 $165,000

 $45,000

1%

CTO

 $160,000

 $45,000

2%

Head of Sales

 $165,000

 $100,000

2%

Head of Marketing

 $160,000

 $40,000

2%

Head of BizDev

 $160,000

 $60,000

2%

No big surprise that founders made less money but have considerably more equity than their non-founder counterparts. The equity for the non-founders is at time of hire and is generally diluted over time. In my own experinece I have found that the people that report into the executive team generally make 30% - 70% less then these figures in cash comp depending on the stage of the startup, experience, and skill set.

Some other interesting tidbits.

About 70% of executives are bonus eligible led by the sales, marketing, and business development types. The sales folks had about a 60% of base bonus target while the marketing/bizdev people were at 30%.

About 20% of executives had severence packages. 

Just a third of the companies in later financing stages had the founding CEO in control.

The most common equity vehicle used are incentive stock options.

CTOs get diluted a lot more than CEOs.

While researching this I came across Noam Wasserman's Founder Frustrations blog. Nice resource for co-founder issues, compensation, board management, and investor issues.

Here is the latest complete CompStudy report if you care to read it. In a day or so I will post about Atlanta technology compensation and how it compares to the national numbers.

Posted in Management, Startups
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