How much should you pay an executive in a startup company?

May 1, 2009

CompStudy publishes an annual report of equity and cash compensation that provides compensation data on top management positions and Boards of Directors at private companies in technology and life sciences.  CompStudy covers more than 25,000 executives at 5,000 companies and is the largest study of its kind.

Data is analyzed by: founder/non-founder status, company revenue and headcount, geography, business segment, and number of financing rounds raised. Additional detail is provided on compensation for the Board of Directors, general organizational changes over time and other compensation trends.

The survey consists of a Web-based questionnaire, which can be filled out by a single member of a company’s executive team and takes approximately 45-60 minutes to complete.

CEOs or CFOs of startups in the US, China, India, Israel, or the UK in the technology or life science industry should consider taking the survey.   Participants who complete the survey will receive the full results at no cost. 

The 2008 results are available on Altgate and are also embedded below.

For example, below are the 2008 results for average equity granted at time of hire in IT companies:

  • CEO 5.40%
  • President/COO 2.58%
  • CFO 1.01%
  • Head of Technology/CTO 1.19%
  • Head of Engineering 1.32%
  • Head of Sales 1.20%
  • Head of Marketing 0.91%
  • Head of Business Development 1.23%
  • Head of Human Resources 0.24%
  • Head of Professional Services 0.60%

2008 CompStudy Report in Technology

Publish at Scribd or explore others: Law & Government Business & Law startup equity

2008 CompStudy Report in Life Sciences

Publish at Scribd or explore others: Law & Government Business & Law startup equity

Comments

  • Runet_startup_founder

    Yokum, what have you seen as an appropriate range for advisors to a pre-Series A startup? I would like the advisor in question, who has considerable interactive marketing expertise, to commit 1 hour a week for 1 year (so 52 hours total) to provide strategic marketing advice, make introductions to key people, etc. and suggested an equity grant (subject to vesting over that year) of 0.25%, which the advisor thought was too low. Thanks in advance for your thoughts.

  • http://www.startupcompanylawyer.com Yokum

    @Runet – 0.10% to 1.00% seems like a fair range. 52 hours/year seems like a lot of time. I think 0.25% seems like it is on the low end for that much of a time commitment.

  • SHELL123

    What should a startup company offer me in stock if salary is 1/3 of my market value,10% commission per deal ..They are offering 1% stock vesting in 4 years in 48 installments..I have to head and execute all sales research job in an asian country market.Please suggest.

  • http://www.startupcompanylawyer.com Yokum

    @Shell 123 – I'm a lawyer not a comp consultant. It's hard to tell what is appropriate without more facts, such as stage of company, your title, background, etc.

  • http://www.startupcompanylawyer.com Yokum

    @Shell 123 – I'm a lawyer not a comp consultant. It's hard to tell what is appropriate without more facts, such as stage of company, your title, background, etc.

  • http://www.socialvolt.com Scott Oppliger

    Yokum, I downloaded and read the entire compstudy document for technology and found it incredibly useful. I have one comment and one question for you. All of the salary and equity numbers made sense and seemed reasonable with one exception. I thought the pre-revenue salary numbers for founders in the <=1 funding stage to be almost unbelievable. I am smack in middle of our angel investor talks and am positive that they would find it unacceptable to pay founders salaries in those ranges pre-revenue. I'm not sure if I'm misunderstanding the numbers or not, but our entire founding team is planning on only paying ourselves a fraction of what we normally earned during our pre-revenue phase. I know you're not a compensation consultant, but I would love to hear any thoughts or experience you might have on that topic.

    My question is regarding equity for my co-founders. Only two of us have left our jobs to work full-time. The other two cannot join full time until the company can pay them a salary, but they're contributing a great deal of software development “evenings and weekends”. I'm trying to determine what equity and vesting works best. My discussions to-date have mentioned numbers varying between 2% and 7% for the three other people. Thanks in advance for your thoughts.

  • http://www.startupcompanylawyer.com Yokum

    @Scott – I think $5K/month after raising a $500K seed round seems okay. The equity ranges that you mention don't seem out of whack one way or the other.