The Right Salary for a Startup Founder

We’ve seen a wide range of CEO salaries at venture backed companies, from as low as $35k annually to as much as $325k (plus bonus).  The inconsistency has led us to ask what an appropriate salary for a startup CEO really is.  While there is no dataset explicitly outlining salary levels at early stage companies, we can use the salaries from tech companies at IPO to get a sense for what the salary should be for a successfully exiting CEO.  The data below shows the salaries of 101 tech company CEO’s at IPO.

 

    Year of Salary Bonus/Other Options Total
Company CEO S1 Comp Comp Comp Comp
SaaS            
2U Christopher Paucek  2013 $300,000 $450,000 $4,086,606 $4,836,606
Acacia Murugesan Shanmugaraj 2016 $246,750 $122,045 $13,363 $382,158
Appfolio Brian Donahoo 2014 $250,000 $1,763,000 $369,000 $2,382,000
Athenahealth, Inc. Jonathan Bush 2007 $298,077 $0 $81,921 $379,998
Atlassian Scott Farquhar 2015 $264,862 $23,041 $0 $287,903
BazaarVoice Brett Hurt 2011 $250,000 $141,092 $0 $391,092
Benefitfocus, Inc. Shawn Jenkins 2013 $510,513 $0 $370,420 $880,933
Box Inc Aaron Levie 2014 $150,833 $38,750 $87 $189,670
BroadSoft, Inc.  Michael Tessler 2010 $276,058 $191,120 $493,176 $960,354
Castlight Health Giovanni Colella 2014 $200,000 $0 $41,661 $241,662
Cornerstone Adam Miller 2011 $310,000 $0 $3,664,591 $3,974,591
Cvent, Inc.  Rajeev Aggarwal 2013 $365,796 $97,020 $803 $463,619
Demandware Thomas Ebling 2012 $275,000 $0 $211,680 $486,680
Fitbit James Park 2014 $221,179 $80,000 $7,543,446 $7,844,625
Five9, Inc.  Michael Burkland 2014 $366,212 $49,462 $1,932,377 $2,348,051
GoPro Nicholas Woodman 2014 $800,000 $1,003,200 $49,591 $1,852,791
HortonWorks Robert Bearden 2013 $166,667 $166,667 $727,292 $1,060,626
Hubspot Brian Halligan 2013 $238,183 $1,212 $132,376 $371,771
Instructure Joshua Coates 2015 $1 $0 $0 $1
Intralinks J. Andrew Damico 2010 $325,000 $227,000 $11,921 $563,921
Jive Software, Inc. Anthony Zingale 2011 $255,769 $0 $2,761,632 $3,017,401
Lifelock Todd Davis 2012 $408,462 $0 $239,277 $647,739
LinkedIn Jeffrey Weiner 2010 $250,000 $1,242 $211,055 $462,297
LivePerson Inc. Robert Loscascio 2000 $108,000 $50,000 $0 $158,000
LogMeIN, Inc. Michael Simon 2009 $265,000 $299,118 $72,686 $636,804
Marin Software Christopher Lien 2013 $275,000 $0 $2,735,708 $3,010,708
Marketo Phillip Fernandez 2012 $325,000 $308,750 $1,852,900 $2,486,650
Match Group Sam Yagan 2016 $500,000 $600,000 $3,719,992 $4,819,992
Medidata Solutions Tarek Sherif 2009 $360,000 $448,000 $58,136 $866,136
MindBody Richard Stollmeyer 2014 $360,000 $106,484 $699,668 $1,166,152
MobileIron, Inc. Robert Tinker 2014 $270,000 $0 $13,500 $283,500
Nant Health Patrick Soon Shiong 2016 $0 $0 $0 $0
Netsuite Zachary Nelson 2006 $300,000 $12,591 $143,000 $455,591
New Relic, Inc. Lewis Cirne 2014 $240,000 $127,435 $0 $367,435
Proofpoint, Inc. Gary Steele 2011 $300,000 $127,500 $816,884 $1,244,384
Qualys, Inc. Philippe Courtot 2012 $300,000 $103,500 $0 $403,500
RealPage, Inc. Stephen Winn 2010 $400,000 $250,440 $0 $650,440
RingCentral, Inc. Vladimir Schmunis  2013 $325,000 $146,453 $3,166,531 $3,637,984
SalesForce Marc Benioff 2003 $1 $0 $0 $1
Secureworks Michael Cote  2015 $456,924 $3,328,038 $0 $3,784,962
ServiceNow Frank Slootman 2011 $150,000 $116,218 $0 $266,218
Shopify Tobias Lutke 2015 $339,055 $0 $0 $339,055
Splunk Godfrey Sullivan 2011 $250,000 $500,000 $0 $750,000
SPS Commerce, Inc. Archie Black 2009 $276,000 $29,728 $103,406 $409,134
Square Jack Dorsey 2016 $3,750 $0 $0 $3,750
Textura Patrick Allin 2013 $455,000 $698,926 $677,899 $1,831,825
Twilio Jeff Lawson 2016 $299,783 $15,000 $1,938,769 $2,253,552
Ultimate Softare Scott Scherr 1998 $200,000 $0 $318,809 $518,809
Veeva Systems Inc. Peter Gassner 2013 $225,000 $0 $0 $225,000
WorkDay David Duffield 2012 $33,280 $1,500 $0 $34,780
Xactly Chris Cabrera 2015 $342,000 $124,231 $0 $466,231
Zendesk Mikkel Svane 2013 $200,000 $74,906 $0 $274,906
             
Payments            
Square Jack Dorsey 2016 $3,750 $0 $0 $3,750
             
Social            
Facebook Mark Zuckerburg 2012 $483,333 $220,500 $783,529 $1,487,362
Linkedin Jeffrey Weiner 2011 $250,000 $211,055 $1,242 $462,297
Snapchat Evan Spiegel 2016 $503,205 $1,000,000 $901,635 $2,404,840
Twitter Dick Costolo 2013 $200,000 $0 $11,305,740 $11,505,740
             
Marketplaces            
Priceline Richard S. Braddock 1998 $112,500 $0 $5,000,000 $5,112,500
Sabre Tom Klein 2014 $711,923 $0 $3,724,632 $4,436,555
Shutterstock Jonathan Oringer 2012 $250,000 $0 $0 $250,000
Etsy Chad Dickerson 2015 $300,000 $247,500 $0 $547,500
Lending Club Renaud laplanche 2014 $314,583 $203,625 $0 $518,208
Angie's List William Oesterle 2011 $254,995 $1,440,847 $141,586 $1,837,428
Zillow Spencer M. Rascoff 2011 $215,780 $0 $351,200 $566,980
Groupon Andrew Mason 2011 $180,000 $0 $4,599 $184,599
GrubHub Matthew Maloney 2014 $265,000 $0 $417,827 $682,827
Care.com Sheila Marcelo 2013 $259,167 $125,000 $78,750 $462,917
Elevate Credit Kenneth Rees 2014 $409,231 $0 $536,957 $946,188
Redfin Glenn Kelman 2016 $250,871 $0 $68,258 $319,219
             
             
             
Content Distributors            
Google Eric Schmidt 2004 $250,000 $301,556 $2,894 $554,450
Yelp Jeremy Stoppelman 2011 $220,000 $0 $0 $220,000
TrueCar Scott Painter 2014 $313,186 $231,918 $5,201,179 $5,746,283
WEbMD Jeffery Arnold 1999 $214,302 $6,000 $1,000,000 $1,220,302
Netflix Reed Hastings 2000 $12,698 $0 $1,550,000 $1,562,698
Pandora Joseph Kennedy 2011 $325,000 $175,000 $0 $500,000
             
Gaming            
Zynga Mark Pincus 2011 $301,154 $135,000 $0 $436,154
             
Ecommerce            
Amazon Jeff Bezos 1996 $64,333 $0 $0 $64,333
Blue Apron Matthew Salzberg 2016 $214,560 $201,000 $0 $415,560
Carvana Ernie Garcia 2016 $400,000 $0 $54,008 $454,008
Shutterfly Jeffrey Housenbold 2005 $263,542 $137,500 $0 $401,042
Blue Nile, Inc. Mark Vadon 2003 $249,499 $100,000 $5,107 $354,606
U.S. Auto Parts Network, Inc.  Mehran Nia 2005 $400,000 $0 $0 $400,000
StitchFix Katrina Lake 2017 $534,955 $744,357 $7,836,827 $9,116,139
Alibaba Jack Ma 2014 --- --- --- ---
1-800 Flowers.com, Inc. James McCann 1999 $1,229,930 $0 $0 $1,229,930
Wayfair, Inc. Niraj Shah 2014 $480,000 $11,000 $3,130,500 $3,621,500
HSN, Inc. Mindy Grossman 2008 $1,000,000 $628,178 $499,331 $2,127,509
             
Hardware            
Fitbit James Park 2015 $222,179 $80,000 $7,542,446 $7,844,625
GoPro Nicholas Woodman 2014 $800,000 $1,003,200 $49,591 $1,852,791
TiVo Corporation Michael Ramsay 1999 $150,000 $0 $0 $150,000
Garmin Ltd Min Kao, Gary Burrell 2000 $166,270 $14,330 $51,879 $232,479
Roku Anthony Wood 2017 $750,000 $13,255 $22,380 $785,635
             
Median   2013 $265,000 $49,462 $54,008 $547,500

 

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 refreshing to see a CEO pass up a big salary if he/she doesn’t need one.  It sets an example for the rest of the company, establishes a culture of cash efficiency, and shows a founder putting the company ahead of himself/herself.  Founders taking low salaries also show very well when going to raise money. 

 

-$265k is the median for a very successful company.  Keep in mind, the median salary of $265k is for the CEO of a 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 Series A startups, especially on the West Coast.  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 $49k and median option grant had a value of $54k.  Indeed, it’s not unreasonable to take a performance based 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.  Equity, not salary, should be your main focus. 

 

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: Benioff, Shiong, Dorsey, and Bezos owned 32%, 57%, 24%, and 48% of their respective companies at the time they went public.  It goes without saying they made a lot more money on their equity than they did on salaries.  

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