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/frugality, and shows a founder putting the company ahead of himself/herself. 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.
Other forms of comp include options and bonuses. Note the median bonus was $102k and median option grant had a value of $50k. Indeed, it’s not unreasonable to take a performance bonus annually 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.
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 $300k. It’s a good time to be the boss.
sammy@blossomstreetventures.com
Enjoyed this post?
Share it using the links below.