Below is the data on CEO/founder salaries at 95 publicly traded tech companies the year they went public. The data should give you a good feel as what a CEO/founders’ salary can become as your tech business grows.
A few observations stand out:
-The median salary is $275k. The median CEO salary was $265,000 and the average was $312,770. The range was wide: one CEO took no salary and another took an egregious $1,200,000.
-Scrappy CEOs run the most dominant companies in the world. Certain companies and CEOs stand out: Joshua Coates of Instructure took a salary of $1, Patrick Shiong took no salary, Marc Benioff of Salesforce took $1, Jack Dorsey of Square took $3,750, Reed Hastings of Netflix took $12,698, and Jeff Bezos of Amazon took $64,333. Some of the aforementioned companies are the biggest and most dominant in their space and we do believe there is a correlation between scrappy, frugal CEOs and success.
-Options are important. Options and “other compensation” can represent a significant source of income prior to going public. When you’re a successful CEO that either controls the board or has reasonable board members, the board will refill your equity along the road to going public and at the time you go public as a way of making sure the leader that got them to the promised land is properly rewarded.
In summary, as the business grows you can expect to reward yourself handsomely with a nice salary. But, we do believe it’s no coincidence that some of the most successful companies in the world had some of the most modestly paid CEOs. Scrappiness is valuable and permeates the culture, and there is nothing more attractive to investors than a founder that runs lean and cares about cash efficiency. Take as low a salary as you can reasonably live with, and make sure that mentality permeates your culture.