There is no dataset explicitly outlining salary levels at early stage companies, but we can see salaries from tech companies prior to IPO. The data below shows the salaries of 162 tech company CEO’s at IPO. A few observations stand out:
Some of the best CEO’s take the lowest salaries. For instance, Marc Benioff of Salesforce took a salary of $1 at IPO, Patrick Shiong of Nant Health took no salary, Jack Dorsey at Square took only $3,750, and Jeff Bezos at Amazon took only $64,333. That said, these individuals were independently wealthy before the IPO, but it’s always good to see a CEO pass up a big salary if he/she doesn’t need one.
$325k is the median for a very successful company. Keep in mind, the median salary of $325k is for the CEO of a company about to go public.
Other forms of comp include options and bonuses. Note the median bonus was $136k and median option grant had a value of $70k. It’s not unreasonable to take a bonus and it’s also expected that a founder will be granted stock as the Company matures and becomes more successful, especially if their salary is low.
Before the IPO, some of the founders took options worth fantastic sums. For instance, James Park of Fitbit ($7.5mm), Dick Costolo of Twitter ($11.3mm), Scott Painter at True Car ($5.2mm), Brian Armstrong at Coinbase ($59mm), and Drew Houston at Dropbox ($109mm, not a typo), among others all took home nice option packages the year before IPO. As a CEO, so long as you’re driving fantastic growth and value, it’s not out of line to expect additional option grants as a CEO. It’s actually market, and good investors have no problem rewarding CEOs that are performing.
Salaries have gone up over time. The median level of CEO ownership has risen since 1998. From 1996 to 2007, the median during that period was $214k. From 2008 to 2019, the median was $430k. It’s a good time to be the boss.
We hope the data above is helpful in setting salary expectations as you become successful and headed towards IPO.
Visit us at blossomstreetventures.com and email us directly at firstname.lastname@example.org. All founders welcome! We invest in companies with run rate revenue of $2mm to $30mm, with year over year growth of 20% to 50%+ depending on revenue. We lead or follow in growth rounds and special situations like inside rounds, small rounds, rushed rounds, corralling investors with our term sheet, bridges, inbetweeners, cap table clean up, and founder secondary. We can commit in 3 weeks and our check is $1mm to $2mm. Email us!