Average SaaS CEO salaries
Sammy is the Managing Director and Cofounder of Blossom Street Ventures. Connect on LinkedIn or email him directly at firstname.lastname@example.org, especially founders at all stages.
We’ve seen a wide range of CEO salaries in our portfolio, from as low as $35k annually to as much as $400k (plus bonus). While there is no dataset explicitly outlining salary levels at early stage SaaS companies, we can use the salaries from tech companies at their IPO to get a sense for what the salary should be for a successfully exiting CEO. The data below shows the salaries of 87 SaaS company CEO’s at IPO.
A few observations stand out:
Some of the best CEO’s take the lowest salaries. Marc Benioff of Salesforce took a salary of $1 at IPO, Patrick Shiong of Nant Health took no salary, Dustin Moskovitz from Asan took $1, and Thomas Siebel of C3 gets paid about $6k. These individuals were independently wealthy before the IPO, but it is refreshing to see a CEO pass up a big salary if they can. It sets an example for the rest of the company, establishes a culture of cash frugality, and shows a founder putting the company ahead of themselves. Founders taking low salaries also show very well when going to raise money. VC would much rather back a scrappy, frugal founder than one that spends gratuitously and the CEO salary tells you a lot about the CEO’s mantra.
$320k is the median for a very successful company. Keep in mind, the median salary of $319,292 is for the CEO of a SaaS company about to go public. In other words, these companies were all tremendously successful up to the point of going public, yet the CEO’s salary was still lower than that we’ve seen for some venture backed large startups. Be sure to temper your salary accordingly based on the stage of your company.
Other forms of comp include options and bonuses. Note the median bonus was $125k and median option grant had a value of $84k. A performance bonus annually is expected, and a founder will be granted stock as the Company matures and becomes more successful, especially if their salary is low (note the average options comp is $4.7mm).
Before the IPO, some of the founders took options worth fantastic sums. Drew Houston at Dropbox took options worth $109mm the year before IPO. Ryan Smith at Qualtrics took $142mm. As a CEO, so long as you’re driving fantastic growth and value, it’s not out of line to expect additional option grants. Good investors have no problem rewarding CEOs that are performing.
We hope the data above is helpful in setting salary expectations. Keep it as low as possible, expect option grants and bonuses for success, and keep in mind the real source of value is your equity.