Do CEOs earn more on their second or third lap? Let’s find out using analysis from the Thelander Private Company Compensation dataset. Below is a break down of each comp lever to get the full picture.
How does startup CEO total cash change with experience?
- Total cash increases with CEO experience.
- At the median, second-time CEOs earn $342,000 in total cash, about 14% more than first-time CEOs.
- The 75th percentile is a slightly different scenario. Total cash rises from $435,000 for first-time CEOs to $534,000 for second time CEOs, then drops to $500,000 for CEOs on their third company or more. The deal is the 3rd time CEOs typically exchange cash for more equity, likely because they no longer need the money. And, if they’re doing this CEO thing for another round, they believe in the company, want the equity and can afford the trade-off. More on that later.
How does non-founder equity change with CEO experience?
- Non-founder equity also increases with CEO experience. The median holds at 5.00% across all three experience levels.
- At the 75th percentile, non-founder equity increases only slightly between first time CEOs (5.00%) and second-time CEOs (5.4%). It then increases more significantly for CEOs on their third company or more (7.2%), consistent with the trade-off of taking lower cash and opting for higher equity.
How does founder equity change with CEO experience?
- Founder total equity decreases between first-time and second-time CEOs. It falls from 16.2% to 11.7% at the median and from 30.0% to 26.4% at the 75th percentile. This may reflect a preference for cash for CEOs on their second go around, while still balancing their equity position.
- Founder CEOs on their third company or more have the highest founder total equity: 20.0% at the median and 34.0% at the 75th percentile. This suggests that their successful track record allows them to leverage their experience to demand higher cash and equity than their less experienced counterparts or choose the mix that works best for them.
What’s the bottom line on startup CEO compensation?
Experience matters and impacts the mix of cash and equity. While each scenario is unique, the Thelander data tells a consistent story that allows you to understand market practices and decide what works best for you and your company.
This data is a preview of the Thelander’s upcoming Startup CEO Compensation Guide. You can secure the report by completing the compensation survey today. Plus, lock in real-time comp data for the rest of your team. The more you give, the more you get – for no charge!
Frequently asked questions
How much do first-time startup CEOs make?
- First-time CEOs earn a median of $300,000 in total cash, and $435,000 at the 75th percentile.
Do repeat founders take less equity?
- Second-time founder CEOs hold less founder equity than first-time founders: 11.7% vs. 16.2% at the median. Founders on their third company or more hold the most, at 20.0%.
What is the difference between founder and non-founder equity?
- Founder equity is the ownership held by CEOs who founded the company. Non-founder equity is the equity granted to CEOs who were hired into the role.
Where does this data come from?
- The Thelander Private Company Compensation Survey, which collects data directly from private companies. Data is published in aggregate, with no individual or company names reported.