Job Hunting

Survey: Venture CEOs Making Out Just Fine

Salaries for CEOs at venture-backed business holding steady; new hires getting more equity.
Lisa YoonMarch 20, 2003

Recession? What recession?

It seems the stalled economy and the stock-market bust aren’t cutting into executives’ paychecks — at least, not at venture-backed startups.

According to the latest executive-compensation survey from VentureOne, a VC research group, executives at venture-backed companies are making at least as much money this year as last — or even more.

The survey, which looked at executive-pay trends at 800 venture-backed companies, compared compensation of veteran executives with those hired during the past six months. Judging by the results, joining a startup doesn’t necessarily mean taking a pay cut.

For example, the median base salary for CEOs at venture-backed companies last year was $200,000, the same as 2001. The number holds true for both longtime chief executives and recent hires.

New CEOs, however, received a bigger chunk of the company. The study found that newly hired chief executives at venture-backed businesses received a median of 15 percent of their company’s equity. That’s compared with the 11.7 percent equity stake held by CEOs who had been with their employers longer.

Vice presidents and directors fared even better; median salaries of those hired in the past six months were higher than those of their veteran counterparts. New VPs’ total cash compensation (including salary and bonus) was $165,000; veteran vice presidents at venture-backed companies were earning $160,000. Newly appointed directors earned a median $125,000, compared with existing directors, who were making $120,000.

Interestingly, compensation for rank-and-file jobs, like engineer or administrative assistant, remained steady. John Gabbert, VP of research at VentureOne, attributes the higher pay for executives at venture-funded companies to the special expertise required in top jobs. “Good people are still valued,” he says. “The responsibility carried by individuals in these positions continues to demand a certain level of expertise and/or leadership, and those qualities have a true market value that is not subject to the vagaries of the economy.”

As for equity stakes, the West Coast still leads the country in equity compensation. CEOs in Southern California, for instance, held a median 16.3 percent in equity — the most compared with their counterparts nationwide. CEOs at New York-based venture-backed businesses, on the other hand, received only 4.8 percent.

Short Take

There may be such a thing as too much information — even for the Securities and Exchange Commission. To wit: in its most recent annual report, Progressive Insurance Co. laced the financial report with pictures of a nude elderly man. Granted, not all the man’s assets are on view. His hands and knees are strategically placed throughout the annual. President Glenn Renwick told the Associated Press the nudity is in keeping with the company’s theme of transparency in its financial dealings.