Visit www.compstudy.com and register to receive full access
Special Access Code
Abbreviated Edition
A SERVICE FROMPARK SQUARE
EXECUTIVE SEARCH
technology 2013
www.compstudy.com© Copyright 1999-2013, Park Square Executive Search LLC. All Rights Reserved
cs2013tech
Sponsored By:
2013 Compensation & Entrepreneurship Report in Technology2013 Compensation & Entrepreneurship Report in Technology
www.compstudy.com | www.parksquare.comwww.compstudy.com | www.parksquare.com# #
TABLE OF CONTENTS
Demographics 3
Cash Compensation 4
Equity and Severance 5
CEO Compensation by Headcount 6
Founder Compensation and Sponsor Information 7
Founder Compensation and Sponsor Information
7
Sponsor Information
Park Square Executive Search is a retainer-based executive search firm located in Cambridge, Massachusetts and in Menlo Park, California. Park Square serves clients and institutions that are changing the world through discovery, innovation, and growth.
www.parksquare.com
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
www.ey.com
WilmerHale offers unparalleled legal representation across a comprehensive range of practice areas that are critical to the success of our clients. We practice at the very top of the legal profession and offer a cutting-edge blend of capabilities that enables us to handle deals and cases of any size and complexity.
www.wilmerhale.com
17 16.3
USD 1,000’s
$0
$50
$100
$150
$200
$250
$300
$350
240.6
182.8191.3
206.6
34.5
260
164.7 164.7
192.8174.6 180.8
18.5
152.3 148.7
47.8
64.826.3
30.8
199.5
51.936.9
19.5
35.326
72
257.5
28
205.4
83.8
29.6
19
2419.3
63.4
57
34.9
87.5
248.4
2012 Base Salary 2012 Bonus Received 2012 Unachieved Bonus 2013 Base Salary 2013 Target Bonus
CEO Head ofFinance/CFO
Head ofBus Dev/CBO
Head ofClinical Research
Head ofRegulatory Affairs
Research &Develop/CSC
Head ofPlatform Tech/CTO
Head ofEngineering
9.36
Founder Total Cash
• Founder CEOs received a more substantial raise than their non-founder peers: 2.5% vs 0.8%.
Founder Equity Holdings
• On the average, founders of technology companies hold significantly more equity than their life science peers – largely due to the less capital-intensive nature of most technology start-ups.
Founder Cash CompensationLetter to the Industry
On behalf of Park Square Executive Search, EY, WilmerHale, and Professor Noam
Wasserman of Harvard Business School, I’d like to welcome you to the 2013 edition
of our annual Compensation and Entrepreneurship Report in Technology. This
report—our fourteenth annual and largest to date—includes summaries and analysis
of compensation data collected from executives at more than 550 private companies
from across the country in software, hardware, content, clean tech and other
industries. The survey data for this edition were collected between May and August
of 2013.
This survey responds to our clients’ continuing need for better access to reliable,
comparable compensation data to assist them in the critical decisions involved in
attracting, motivating and retaining key executives at private companies.
We are able to present correlations between executive compensation and a number
of variables, including: financing stage, company size both in terms of product stage
and headcount, founder/non-founder status, industry segment and geography. We
also provide a number of analytics on Board of Directors compensation and make-
up, company equity plans, and a look at how organizations develop as they raise
additional financing.
This summary document provides only high level excerpts from the detailed analysis
available on-line at www.compstudy.com. Complete access to the data is available
free of charge to survey participants and is also available as a paid subscription.
Thanks for reading,
Aaron Lapat
Managing Partner
Park Square Executive Search
2013 Compensation & Entrepreneurship Report in Technology2013 Compensation & Entrepreneurship Report in Technology
www.compstudy.com | www.parksquare.comwww.compstudy.com | www.parksquare.com# #
Geography Financing Rounds Raised
Business Segment Headcount by Number of Full-Time Employees
28.2
15.1
12.2
11.3
7.6
25.6
% respondents in this range
California
New England
Mid Atlantic
Midwest
West
South
9.2
1.5 3
3.9
8
14
7.5
52.9
% respondents in this range
Software
Communications
Hardware/Semi
IT Services/Consulting
Digital Media/Content/Information
Clean Tech
Healthcare IT
Other
0
10
20
30
40
50
44.9
14.42218.8
% respondents in this range
1–20 21–40 41–75 76+
0
5
10
15
20
25
17
22.3
16.311.6 11.8
21
% respondents in this range
0 1 2 3 4 5 or more
0%
2%
4%
6%
8%
10%
12%
14%
% F
ully
Dilu
ted
Sha
res
50th25th Mean 75th
51–20 FTEs 6.2 10.4 11.6
3.621–40 FTEs 5 5.3 7.4
3.741+ FTEs 5 5.3 6.2
$0
$50
$100
$150
$200
$250
$300
$350
1,00
0’s
US
D
50th25th Mean 75th
123.81–20 FTEs 181.5 183.7 226.3
22521–40 FTEs 250 260.7 289
24541+ FTEs 275 281.5 306 The geographic distribution in 2013 closely mirrors venture capital funding trends, and the universe of private companies at large.
Screenshot of online reporting tool
The companies in this year’s survey are at roughly the same stage as in last year’s survey, when measured by the number of financing rounds raised.
Software companies continue to make up half of the population; Clean Tech has been the fastest-growing segment over the past three years.
Respondent company headcounts were distributed similarly to those in the 2012 survey, with a slightly higher percentage of large companies this year.
CEO Compensation by Headcount
Equity: By Number of Full-time Employees
Base Salary: By Number of Full-time Employees
Demographics
This survey of executive compensation in privately held technology companies was conducted between May and August of 2013. The questionnaire resulted in 550 companies participating with data from over 3,000 executives in a wide cross section of industry sectors, geographies and stages of development.
When controlling for other variables, headcount has proven to be the best predictor of non-founder cash compensation. Equity holdings tend to be most strongly correlated with the number of financing rounds a company has raised.
36
Slice this data yourself at www.compstudy.com
2013 Compensation & Entrepreneurship Report in Technology2013 Compensation & Entrepreneurship Report in Technology
www.compstudy.com | www.parksquare.comwww.compstudy.com | www.parksquare.com# #
Cash Compensation Equity and Severance
17
11.6 11.8
USD 1,000’s
$0
$50
$100
$150
$200
$250
$300
$350
$400
250
182189
177185
172179
165 169 173 178164
174 176
142 142 158 161188 190
5434
31
483935 43
7
8451
33
168
5627
26
11581
33
48
281956
41
166341
1749
2376
83
54
131
CEO COO Head ofFinance/CFO
Head ofTech/CTO
Head ofEngineering
Head ofSales
Head ofMarketing
Head ofBus Dev/CBO
Head ofHR
Head ofProf Svcs
GeneralCounsel
259
8
2012 Base Salary 2012 Bonus Received 2012 Unachieved Bonus 2013 Base Salary 2013 Target Bonus
17
% equity owned, fully diluted
0
1
2
3
4
5
6
7
8
22.6
0.9 1
2.6
1 1.2 1 1.20.6 0.8 0.7
1.10.5
0.91.1
5
CEO COO Head ofFinance/CFO
Head ofTech/CTO
Head ofEngineering
Head ofSales
Head ofMarketing
Head ofBus Dev/CBO
Head ofHR
Head ofProf Svcs
GeneralCounsel
6.2
2013 Median 2013 Mean
0.1 0.2 0.2 0.3
This data compares 2013 compensation data with compensation data for 2012 non-founding executives. 2012 figures are represented with both actual bonus received and total unachieved target bonus for the year. 2013 bonus figures indicate at-plan target amounts. More granular analysis can be found online at www.compstudy.com.
The CompStudy survey also contains detailed questions around non-cash executive compensation and benefits. The 2013 online reports show base, bonus, equity at hire, current equity, and severance for each executive role. More granular analysis can be found online at www.compstudy.com.
• These equity figures are averages covering companies across the maturity and fundraising spectrum.
• As the chart below illustrates, only CEOs consistently received any severance package.
• Non-founder total target cash compensation was up 1.6% in 2013, down markedly from the 4.8% rate of increase between 2011 and 2012. Many positions saw lower target bonuses in 2013, highlighted by a 4.4% decrease in the target for non-founder CEOs.
• On average in 2012, non-founder executives received 65.5% of their target bonuses, up from 60.3% in 2011.
• Earlier-stage non-founder executives do tend to have more equity, but dilution effects tend to level off after the second round of financing has been raised.
• Nearly all severance packages are granted in three-month increments. The median length of severance for CEOs is six months. For all other positions it is three months.
17 16.3
11.6
% of base salary
0%
10%
20%
30%
40%
50%
60%
70%
31.125.7
38.7
22.2
31.922.3 28
16.225.3
45.8
15.8
27.1
48
22.526 22.9
28.4
17.721.6
16.154.8
17.4
31.8
14.9
63.3
18.6
11
8.69.4
12.1
20
CEO COO Head ofFinance/CFO
Head ofTech/CTO
Head ofEngineering
Head ofSales
Head ofMarketing
Head ofBus Dev/CBO
Head ofHR
Head ofProf Svcs
GeneralCounsel
46.3
2012 Bonus Received 2012 Unachieved Bonus 2013 Target Bonus
17
% eligible for severance
0
10
20
30
40
50
60
70
80
33.326.3
18.1
2621
16.8
25 26.234.333.9
CEO COO Head ofFinance/CFO
Head ofTech/CTO
Head ofEngineering
Head ofSales
Head ofMarketing
Head ofBus Dev/CBO
Head ofHR
Head ofProf Svcs
GeneralCounsel
63.5
Total Cash Compensation: Non-Founders Equity Holdings
Bonus as a Percentage of Base Salary Severance Eligibility
54
2013 Compensation & Entrepreneurship Report in Technology2013 Compensation & Entrepreneurship Report in Technology
www.compstudy.com | www.parksquare.comwww.compstudy.com | www.parksquare.com# #
Cash Compensation Equity and Severance
17
11.6 11.8
USD 1,000’s
$0
$50
$100
$150
$200
$250
$300
$350
$400
250
182189
177185
172179
165 169 173 178164
174 176
142 142 158 161188 190
5434
31
483935 43
7
8451
33
168
5627
26
11581
33
48
281956
41
166341
1749
2376
83
54
131
CEO COO Head ofFinance/CFO
Head ofTech/CTO
Head ofEngineering
Head ofSales
Head ofMarketing
Head ofBus Dev/CBO
Head ofHR
Head ofProf Svcs
GeneralCounsel
259
8
2012 Base Salary 2012 Bonus Received 2012 Unachieved Bonus 2013 Base Salary 2013 Target Bonus
17
% equity owned, fully diluted
0
1
2
3
4
5
6
7
8
22.6
0.9 1
2.6
1 1.2 1 1.20.6 0.8 0.7
1.10.5
0.91.1
5
CEO COO Head ofFinance/CFO
Head ofTech/CTO
Head ofEngineering
Head ofSales
Head ofMarketing
Head ofBus Dev/CBO
Head ofHR
Head ofProf Svcs
GeneralCounsel
6.2
2013 Median 2013 Mean
0.1 0.2 0.2 0.3
This data compares 2013 compensation data with compensation data for 2012 non-founding executives. 2012 figures are represented with both actual bonus received and total unachieved target bonus for the year. 2013 bonus figures indicate at-plan target amounts. More granular analysis can be found online at www.compstudy.com.
The CompStudy survey also contains detailed questions around non-cash executive compensation and benefits. The 2013 online reports show base, bonus, equity at hire, current equity, and severance for each executive role. More granular analysis can be found online at www.compstudy.com.
• These equity figures are averages covering companies across the maturity and fundraising spectrum.
• As the chart below illustrates, only CEOs consistently received any severance package.
• Non-founder total target cash compensation was up 1.6% in 2013, down markedly from the 4.8% rate of increase between 2011 and 2012. Many positions saw lower target bonuses in 2013, highlighted by a 4.4% decrease in the target for non-founder CEOs.
• On average in 2012, non-founder executives received 65.5% of their target bonuses, up from 60.3% in 2011.
• Earlier-stage non-founder executives do tend to have more equity, but dilution effects tend to level off after the second round of financing has been raised.
• Nearly all severance packages are granted in three-month increments. The median length of severance for CEOs is six months. For all other positions it is three months.
17 16.3
11.6
% of base salary
0%
10%
20%
30%
40%
50%
60%
70%
31.125.7
38.7
22.2
31.922.3 28
16.225.3
45.8
15.8
27.1
48
22.526 22.9
28.4
17.721.6
16.154.8
17.4
31.8
14.9
63.3
18.6
11
8.69.4
12.1
20
CEO COO Head ofFinance/CFO
Head ofTech/CTO
Head ofEngineering
Head ofSales
Head ofMarketing
Head ofBus Dev/CBO
Head ofHR
Head ofProf Svcs
GeneralCounsel
46.3
2012 Bonus Received 2012 Unachieved Bonus 2013 Target Bonus
17
% eligible for severance
0
10
20
30
40
50
60
70
80
33.326.3
18.1
2621
16.8
25 26.234.333.9
CEO COO Head ofFinance/CFO
Head ofTech/CTO
Head ofEngineering
Head ofSales
Head ofMarketing
Head ofBus Dev/CBO
Head ofHR
Head ofProf Svcs
GeneralCounsel
63.5
Total Cash Compensation: Non-Founders Equity Holdings
Bonus as a Percentage of Base Salary Severance Eligibility
54
2013 Compensation & Entrepreneurship Report in Technology2013 Compensation & Entrepreneurship Report in Technology
www.compstudy.com | www.parksquare.comwww.compstudy.com | www.parksquare.com# #
Geography Financing Rounds Raised
Business Segment Headcount by Number of Full-Time Employees
28.2
15.1
12.2
11.3
7.6
25.6
% respondents in this range
California
New England
Mid Atlantic
Midwest
West
South
9.2
1.5 3
3.9
8
14
7.5
52.9
% respondents in this range
Software
Communications
Hardware/Semi
IT Services/Consulting
Digital Media/Content/Information
Clean Tech
Healthcare IT
Other
0
10
20
30
40
50
44.9
14.42218.8
% respondents in this range
1–20 21–40 41–75 76+
0
5
10
15
20
25
17
22.3
16.311.6 11.8
21
% respondents in this range
0 1 2 3 4 5 or more
0%
2%
4%
6%
8%
10%
12%
14%
% F
ully
Dilu
ted
Sha
res
50th25th Mean 75th
51–20 FTEs 6.2 10.4 11.6
3.621–40 FTEs 5 5.3 7.4
3.741+ FTEs 5 5.3 6.2
$0
$50
$100
$150
$200
$250
$300
$350
1,00
0’s
US
D
50th25th Mean 75th
123.81–20 FTEs 181.5 183.7 226.3
22521–40 FTEs 250 260.7 289
24541+ FTEs 275 281.5 306 The geographic distribution in 2013 closely mirrors venture capital funding trends, and the universe of private companies at large.
Screenshot of online reporting tool
The companies in this year’s survey are at roughly the same stage as in last year’s survey, when measured by the number of financing rounds raised.
Software companies continue to make up half of the population; Clean Tech has been the fastest-growing segment over the past three years.
Respondent company headcounts were distributed similarly to those in the 2012 survey, with a slightly higher percentage of large companies this year.
CEO Compensation by Headcount
Equity: By Number of Full-time Employees
Base Salary: By Number of Full-time Employees
Demographics
This survey of executive compensation in privately held technology companies was conducted between May and August of 2013. The questionnaire resulted in 550 companies participating with data from over 3,000 executives in a wide cross section of industry sectors, geographies and stages of development.
When controlling for other variables, headcount has proven to be the best predictor of non-founder cash compensation. Equity holdings tend to be most strongly correlated with the number of financing rounds a company has raised.
36
Slice this data yourself at www.compstudy.com
2013 Compensation & Entrepreneurship Report in Technology2013 Compensation & Entrepreneurship Report in Technology
www.compstudy.com | www.parksquare.comwww.compstudy.com | www.parksquare.com# #
TABLE OF CONTENTS
Demographics 3
Cash Compensation 4
Equity and Severance 5
CEO Compensation by Headcount 6
Founder Compensation and Sponsor Information 7
Founder Compensation and Sponsor Information
7
Sponsor Information
Park Square Executive Search is a retainer-based executive search firm located in Cambridge, Massachusetts and in Menlo Park, California. Park Square serves clients and institutions that are changing the world through discovery, innovation, and growth.
www.parksquare.com
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
www.ey.com
WilmerHale offers unparalleled legal representation across a comprehensive range of practice areas that are critical to the success of our clients. We practice at the very top of the legal profession and offer a cutting-edge blend of capabilities that enables us to handle deals and cases of any size and complexity.
www.wilmerhale.com
17 16.3
USD 1,000’s
$0
$50
$100
$150
$200
$250
$300
$350
240.6
182.8191.3
206.6
34.5
260
164.7 164.7
192.8174.6 180.8
18.5
152.3 148.7
47.8
64.826.3
30.8
199.5
51.936.9
19.5
35.326
72
257.5
28
205.4
83.8
29.6
19
2419.3
63.4
57
34.9
87.5
248.4
2012 Base Salary 2012 Bonus Received 2012 Unachieved Bonus 2013 Base Salary 2013 Target Bonus
CEO Head ofFinance/CFO
Head ofBus Dev/CBO
Head ofClinical Research
Head ofRegulatory Affairs
Research &Develop/CSC
Head ofPlatform Tech/CTO
Head ofEngineering
9.36
Founder Total Cash
• Founder CEOs received a more substantial raise than their non-founder peers: 2.5% vs 0.8%.
Founder Equity Holdings
• On the average, founders of technology companies hold significantly more equity than their life science peers – largely due to the less capital-intensive nature of most technology start-ups.
Founder Cash CompensationLetter to the Industry
On behalf of Park Square Executive Search, EY, WilmerHale, and Professor Noam
Wasserman of Harvard Business School, I’d like to welcome you to the 2013 edition
of our annual Compensation and Entrepreneurship Report in Technology. This
report—our fourteenth annual and largest to date—includes summaries and analysis
of compensation data collected from executives at more than 550 private companies
from across the country in software, hardware, content, clean tech and other
industries. The survey data for this edition were collected between May and August
of 2013.
This survey responds to our clients’ continuing need for better access to reliable,
comparable compensation data to assist them in the critical decisions involved in
attracting, motivating and retaining key executives at private companies.
We are able to present correlations between executive compensation and a number
of variables, including: financing stage, company size both in terms of product stage
and headcount, founder/non-founder status, industry segment and geography. We
also provide a number of analytics on Board of Directors compensation and make-
up, company equity plans, and a look at how organizations develop as they raise
additional financing.
This summary document provides only high level excerpts from the detailed analysis
available on-line at www.compstudy.com. Complete access to the data is available
free of charge to survey participants and is also available as a paid subscription.
Thanks for reading,
Aaron Lapat
Managing Partner
Park Square Executive Search
Visit www.compstudy.com and register to receive full access
Special Access Code
Abbreviated Edition
A SERVICE FROMPARK SQUARE
EXECUTIVE SEARCH
technology 2013
www.compstudy.com© Copyright 1999-2013, Park Square Executive Search LLC. All Rights Reserved
cs2013tech
Sponsored By: