Thelander PC Digest: May 2024
You’re Expanding Your Team and Need Pay Bands for Your Entry Level Employees. Where Do You Start?
It’s commencement season, which means many college graduates will soon be on the hunt for their first career jobs – with many looking to the private capital markets to jumpstart their careers.
This could prove challenging in this economy, where landing a well-paid job is extremely competitive, coupled with fewer entry-level job openings. However, for companies competing for talent, it’s important to know how much money you can potentially pay for a particular role and what levers you have to negotiate in extending an offer. For most startups, this includes equity, which is a percentage of a company’s shares, not a dollar amount. Having pay bands for entry level to director roles is a necessary protocol so you can hire and keep your company’s compensation in order. for most startups, this includes both cash and equity (which is a percentage of a company’s shares, not a dollar amount).
According to data from the Thelander Private Company Compensation Survey, median compensation for entry-level admin specialists hovers around $84,109, up from $80k in 2022. Graduates seeking this kind of role can also expect to earn roughly 0.02% of fully-diluted shares – a figure that has trended down over the last three years.
These figures change when taking into account a companies total amount of financing. Graduates who join a startup that has raised less than $50 million in financing can expect to earn $79k, while those who join startups that have raised between $50 million and $149.9 million can expect to earn $85k. But, what early-stage employees lose in base pay and bonuses, they make up for in equity. Graduates who join startups with less than $50 million in financing earn an average of 0.045% in equity compares to 0.024% at later stage companies.
Let’s look at another department: engineering. The median compensation for associate engineers is $82,500 at companies that have raised less than $50 Million, which has steadily increased YoY since 2022. Alongside base pay and bonuses, median equity for associate engineers is 0.034%, up slightly from the last two years.
Interestingly, associate engineers at early stage startups, those that have raised less than $50 million in financing, earn more than those at later stage startups and they earn more in equity. Median cash compensation for this role at early stage startups is $82,500, compared to $81,130 at later stage companies. When it comes to equity, early stage startups shell out 0.0450% in equity to associate engineers whereas later stage companies tend to offer 0.0248%.
As engineers ascend the career ladder, so does their earning potential. Median compensation for staff level engineers is $114,719, up 33% from associate engineers. They can also earn .087% in equity, at the median. Thelander data shows that staff engineers at early stage companies can earn less in pay than staff engineers at later stage companies, but earn more equity than their late-stage counterparts. Deciding what percentiles and levers to utilize depends on your company’s compensation philosophy and the financial needs of the individual in the role (if they are more cash or equity driven).
As new grads enter the job market, it’s important to know where they stand using real-time market data. Tools like J.Thelander Consulting and Complanderexist for you to make educated decisions on all aspects of compensation for your current and future hires.
The Thelander Digest is powered by the no-cost Thelander Private Company Compensation Survey. We invite you to participate and secure your free subset of the results on our platform and see how your base salaries, bonuses, annual cash, founder and non-founder equity, option pool, non-investor board comp and more compare to market. If you’d like to learn more about Thelander or schedule a demo or discuss our consulting services, you can email or call us: +1.305.793.8605