Using the private company compensation dataset from the Thelander platform, we looked at compensation for startup founder and non-founder CEOs at companies that have raised less than $50 million and $50 – $149.9 million. What does the data tell us?
Non-founder CEOs earn more total cash than founder CEOs at every percentile and both financing levels. But the tradeoff is that founder CEOs hold significantly more equity. How large the gap is depends on how much capital the company has raised. This is exactly why the total financing is such an important filter to utilize when customizing data for the executive team: it changes the mix of cash and equity – for founders and non-founders.
This week’s data drop is a preview of the Thelander’s upcoming Startup CEO Compensation Guide. You can secure the report by completing the compensation survey today.
What about CEOs of companies that have raised less than $50 million in total financing?
- At the median, non-founder CEOs earn $273,000 in total cash, compared with $257,500 for founder CEOs.
- Equity runs the other way. Median founder CEO total equity is 20.00%, four times the 5.00% held by non-founder CEOs.
- Founders typically start with higher equity and lower cash, aligning their interests with the company’s success as they continue to focus on fundraising.
What about CEOs of companies that have raised $50 – $149.9 million in total financing?
At the next financing bracket, the cash gap is much wider.
- Median non-founder CEO total cash is $490,000 compared with $400,000 for founder CEOs. That $90,000 is a 22.5% premium.
- The difference is 13.3% at the 25th percentile and 17.4% at the 75th percentile, so no matter the percentile, non-founder CEOs make more.
The equity gap narrows but remains substantial.
- At the median, founder CEOs hold 6.87% compared to 5.00% for non-founder CEOs. So, while non-founder CEOs are making more in cash across all percentiles, founders are making it up in equity.
What’s the bottom line?
Founder CEOs have more of their compensation in equity. Non-founder CEOs are paid more in cash, and that cash trade-off becomes a larger portion of the comp package as companies scale.
This trend continues as companies raise more capital, compensation packages overall tend to be more cash rich while equity is at a higher premium. Dilution is inevitable and planning for the right mix of cash and equity is extremely important. Elite founders know the deal and plan so when there is liquidity, there are no regrets.
The best data comes from companies willing to share theirs. Complete the compensation survey today to secure the Startup CEO Compensation Guide and access real-time comp data for no charge for every job title you contribute in the meantime.