For 2022, we analyzed CEO pay at over 250 seed and venture-funded startups, and we noticed an interesting trend taking shape. Or even a few dozen million? There were more than 100 CEOs who made over $19 million in 2020 in salary, bonuses, stock awards, and other forms of compensation. Using data from Aons Total Compensation Measurement (TCM) database, we took an early look at 2020 CEO pay disclosures from 178 companies to provide guidance to companies in their compensation planning. Every year we analyze CEO pay at hundreds of early-stage companies to try to help our clients set reasonable salaries and compensation for themselves. More, Recently searched related titles: The companies surveyed report modest pools for the sharing of value creation relative to publicly traded peers. Thats why its critical you have the salary discussion before you sign the term sheet and close on that investment. Betterment, SoFi, and WeBull, and more than 20 million of our clients' customers. Based on our analysis of the data, this small difference can be explained by the fact that the female CEOs in our dataset are predominantly running earlier stage companies. Upon digging deeper, we realized that this is because of the rise of D2C healthcare companies, which tend to seem more like SaaS businesses and less like a healthcare company with a CEO who has an advanced degree. CEO compensation at the top 350 companies jumped nearly 19% in 2020 to an average $24.2 million, according to the Economic Policy Institute, a liberal-leaning think tank. SaaS was the top performing industry by CEO salary in 2020. Bonuses and stock options can lure talent to such organizations even if they are slow growers and unlikely to become blockbusters. The highest average wages were in San Francisco, where the salaries were at $198,164. Pay ratio: 106. quote: It's a very well-run company with no debt so earnings are probably not going to be as high as $3m but maybe towards $1.5-$2m. 1, 603, 933. . A CEO with a $1 million salary may also receive a $700,000 bonus. Base Salary. Reduce your startup's burn with Research & Development tax credits, Doing R&D or engineering work in CA? Interested in other data on startup spending? From compensation planning to variable pay to pay equity analysis, we surveyed 4,900+ organizations on how they manage compensation. The total cash compensation, which includes base, and annual incentives, can vary anywhere from $849,258 to $2,050,264 with the average total cash compensation of $1,317,449. Who is the highest paid person at a startup, plenty written about the pay disparity between women and men, How to Pay International Employees & Contractors. Series B CEOs are paid, on average, about $250,000 to $260,000 - but once again, there is a tremendous range of compensation based on the industry, amount of funding raised, etc. that oversees more junior Chief Executive Officer (CEO)s, this experience can increase the likelihood to earn more. Defines corporate vision and strategy establishes company direction and focus. Additionally, you can read a opinion piece by Scott Orn, Kruzes COO, about what salaries early-stage founders should take after theyve raised funding. In many cases, an annual bonus is nothing more than a base salary in disguise. Some related job titles are.css-123ngk9{cursor:pointer;font-size:15px;line-height:24px;color:#1861bf;}.css-123ngk9:hover{color:#0c4085;}Chief Executive Officer Salaries with median pay of $406,678,Presidente & CEO Salaries with median pay of $435,037,Chief Operating Officer Salaries with median pay of $354,082. Not the job you're looking for? Not paying yourself enough can turn you into a bad decision-maker. If you are thinking of becoming a CEO or planning the next step in your career, find details about the role, the career path and salary trajectory of a CEO. That is a significant growth compared to 2018 when a typical small business executive usually earned $131,729. said Vanessa Kruze, CEO of Kruze Consulting. Included in the equation that VCs use to make investment decisions is CEO salaries, and experienced startup CEOs realize that. Pay, Whether you are hiring a single employee , or an entire department of, The labor market is a strange place right now. Many CEOs scrambled during COVID to try to stretch their companys runway by slashing costs, including their own pay, said Scott Orn, COO of FP&A at Kruze Consulting. But this might change over time considering the rising trend toward remote work. Carnival Corp : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) AQ. In the past 10 years, CEO pay at S&P 500 companies increased by more than $540,000 a year to an average of $18.3 million in 2021. CEOs at manufacturing companies saw the highest prevalence of salary reduction. The average S&P 500 company CEO made 299 times the average worker's salary last year, according to AFL-CIO's annual Executive Paywatch report. Hardware companies tend to require larger than average amounts of venture capital funding to get to a meaningful size. Photo: Patrick T. Fallon/Bloomberg via Getty Images. And familiar names like Jeff Bezos and Elon Musk are nowhere on that list. $20M. The goal it set for executives to get bonuses: Sales had to fall less than 28% on the year. Startups with $10 million or more in funding saw their average Chief Executives pay rise 8% from $160,000 in 2018 to $173,000 in 2019. Commission. The largest growth appeared among companies who raised between $5-10 million among this group, average CEO salaries jumped 12% from $145,000 in 2018 to $162,000 in 2019. There has always been an underlying (unsaid) belief that startup CEOs and founders should have to make personal sacrifices and pour their blood, sweat and tears into their business. Your input helps Glassdoor refine our pay estimates over time. Weather it be the main wheel to run 20 million in profitable sales helping Lloyd's Refrigeration Inc. reach their second highest yearly earnings since 1966, in 2008. Average COO (Chief Operating Officer) Salary by Company Size . Reports 45,439,650. Lehi, UT, GovAssist - We take a deep dive into what's impacting employee retention and what employees are looking for in their new role. $5k - $144k. The average President / CEO in the US makes $332,929. Chief Technology Officer (CTO) $234,700. And in 2021, the average salary popped back - but thats not the full story, as youll see as we dig into the numbers. Granted, for the later stage companies its a different story while these CEOs tend to make more, there are fewer female CEOs in this group. Whats the best way for a remote company to handle mail? In 2018, the small business CEO earned between $25,486 and $678,008, with a median pay of $122,107. A chief financial officer in the U.S. can expect to make anywhere from $130,000-$462,923 per year. The average salary for a COO (Chief Operating Officer) in US is $200,603. Kruze Consulting continues to advise founders to accept salaries as soon as theyve acquired funding. From compensation planning to variable pay to pay equity analysis, we surveyed 4,900+ organizations on how they manage compensation. Not only does a market salary enable you to cover the cost of living and a good housing arrangement, it also ensures the financial stress doesnt lead to bad decisions at the company. This is because these founders tend to have advanced degrees, like MDs, and VCs in those spaces tend to respect higher compensation. Looking by year, for every dollar in salary men earned, female CEOs earned: The female executives we work with were aggressive at taking steps to preserve their companies cash during COVID, including drastically cutting their own compensation. Average startup CEO salary is $150,000 in 2022. Kruze is a leader in accounting services for startups. A shift towards, Handling involuntary termination is a likely occurrence for human resources managers and, Return better results with Payscale job search, Compare real living costs across different states, Consider potential directions your career can take, Calculate the 20-year net ROI for US-based colleges, Are you the kind of person who struggles to get a handle, Learn where the best career earners attended college, The average salary for a President and CEO is $173,422, An entry-level President and CEO with less than 1 year experience can expect to earn an average total compensation (includes tips, bonus, and overtime pay) of $90,000 based on 6 salaries. New research on who's asking for raises and who's getting them as well as advice on how to ensure you're getting the salary you deserve. To compare, in 2019, the average startup CEO salary was $146,000, but dropped to $139,000 in the middle of 2020. Company pay ratio data is important. Still, its always nice to see a CEO decline a large compensation if they dont need one. Brex vs Ramp - Which card is best for startups? However, during the COVID pandemic in 2020 the pay gap expanded again throughout corporate America, and our research on startup companies also reflects that trend. The following takes a closer look at each position, examining how role-specific duties and other factors can impact compensation levels. However, startups with more limited funding saw their CEOs make less, by about 7%, than in 2021. Relationship Management, Project Management, Organizational Policy Development, Risk Management Looking by year, for every dollar in salary men earned, female CEOs earned: The setback in salaries for female startup CEOs is troubling, especially considering that the market was much closer to parity in 2019, prior to the COVID crisis, said Vanessa Kruze, CEO of Kruze Consulting. There's no accountability for mistakes made under the watch of the CEOs. For every dollar paid to an eBay employee on average, Donahoe made $106. Chief Executive Officer is responsible for the short and long-term profitability and growth of the company. We may monetize some of our links through affiliate advertising. With more online, real-time compensation data than any other website, Salary.com helps you determine your exact pay target. We hope this report simplifies your startup CEO pay decision! Managing Experience: If you are a President and CEO Theres been plenty written about the pay disparity between women and men in the U.S. And when it comes to the startup world, that pay gap has remained stubbornly high. Having said that, these people were already affluent before the IPO. So if your company brings in $10 million in revenue, limit your focus to companies between $5 million and $20 million in revenue, give or take. CEOs are the highest ranking corporate executives and their compensation often reflects as much. By company size, base, bonus, and total cash compensation all rise as revenue does, with total median cash compensation coming in at $1,639,000 at companies with revenue above $1 billion. Seed and early-early-stage founders are raising less capital, meaning they will be taking a smaller starting pay. Weve found that there are a variety of factors that can influence the salary of a startup CEO. SaaS was the top performing industry by CEO salary in 2020. Use our tool to get a personalized report on your market worth. These numbers represent the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users. Median chief executive officer total direct compensation (the sum of salary, short-term incentives and long-term incentives) is $425,000 for the entire survey population of family businesses. Logan, UT. By contrast, the top-paid bank CEO was Wells Fargo & Co.'s . But before we get blindsided by the numbers, we need to take into account the experience and skills required to succeed in this role. Boeing's CEO at the time, Dennis Muilenburg, was fired and walked away with about $58.5 million. EdTech and Hardware startups saw the biggest declines in CEO salary and eCommerce startup CEO salaries went up the most in 2020. Sue Nabi's Salary and Perks. As the urgency of the COVID situation decreased, and many early-stage companies saw their financial situation stabilize, a number of the companies that reduced their executive pay reversed the situation. Elevate Credit Union - Infographics Theyre responsible for fundraising, reporting to the board and other stakeholders, providing direction to the company, and making operational decisions. Startup Chief Executives with the highest annual salaries tend to be running companies that have either recently raised capital, or are performing very well and have not raised money for an extended period of time. Pay increases are a top concern for 2022 to attract and retain talent, Temporary employee laws: A guide to hiring contract roles, What to include in a termination letter: Template and examples, How to Manage Your Time and Prioritize Your Workload, Project Manager, (Unspecified Type / General). This article offers a first look at key data points to help serve as a guide. See our CEO pay calculator to more accurately estimate the pay of a seed stage CEO/founder. CFOs for private companies with $21-$99MM in annual revenue make an average of $237,983 in base salary. PRESS RELEASE. Male CEOs saw a $5,000 salary increase. MarketWatch provides the latest stock market, financial and business news. All personal information is collected and used in accordance with our privacy statement. As weve seen in the past, biotech and pharmaceutical companies tend to have the highest CEO compensation, with seed funded companies paying their Chief Executives $161,000. Interestingly, Female CEOs were more likely to take a pay cut during the pandemic. Lets dive into why we think there are notable difference by industry. The specific job duties that are required from a CEO will vary depending on what type of organization they happen to be the leader of, as there could be a wide range of job Read more, Our data indicates that the highest pay for a Chief Executive Officer (CEO) is $312k / year, Our data indicates that the lowest pay for a Chief Executive Officer (CEO) is $75k / year. Performance & Analytics, Contact Us The economy and VC fundraising environment is obviously channeling, and later stage founders are likely to have reduced their salary increases, and not raised an additional round (at which theyd give themselves a pay boost). Bonuses. Transform pay with our enterprise-grade comp platform, Automate compensation with our full-suite solution, Payscale's employer-reported salary data network, The world`s largest employee-submitted pay database, Annual survey salary data from HR industry publishers, The crowdsourced compensation data API for developers, 100% company submitted data from 2,000+ businesses, Schedule a personalized demo to feel the power of Payscale, Find salary information for similar job titles and locations, Comp Planning Business Case Pitch Deck By clicking Download Pitch Deck, you. . Adjustments were roughly the same on average across all revenue sizes. Becker says companies may start increasing CEO salaries above $1 million now that the . You may be eligible, CA hardware startups doing R&D can pay less sales tax, Eligibility requirements are challenging for most VC-backed companies, Experts in raising capital and working with VCs, Venture Debt fundraising advice for VC backed startups, Experience helping funded startups navigate the M&A diligence process, High quality 409A's at a discounted price, Kruze's clients raise $1B+ a year in VC funding; this checklist will help you prepare. Therefore, how much does a CEO in a small company earn? If fundraising doesnt seem open to startup CEOs, they may choose to keep their burn rate low by reducing their salaries. The SBA reports that most small business owners limit their salaries to 50% of profits, Singer said. Meanwhile, those of SaaS companies made on average $113,000 in 2018, which rose 7% to $121,000 in 2019. However, the true figure is roughly ten times higher. Being a Chief Executive Officer ensures appropriate governance and controls. When we compared the salaries of male Chief Executives versus females, we found that the numbers were roughly the same $138,000 per year for women versus $143,000 for men. What do you believe the typical CEOs salary is? One of the most common questions CEOs ask us at Kruze Consulting is: How much should my salary be? Since the Kruze team helps run startups books and payroll, its natural that wed get this question. Big bank execs: What they take home When times were good, the top executives from the largest U.S. banks made a mint. Additional pay could include cash bonus, commission, tips, and profit sharing. The United States remains the best place to be working as a CEO, at least salary-wise. Close the Future Skills Gap In 2018, CEOs of hardware startups had an average salary of $118,000, which rose 14% to $135,000 in 2019. Company Pay Ratios. is pretty wide and is more driven by the absolute dollar amount raised, pay does vary by stage. 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