A SERVICE FROM
PARK SQUARE
EXECUTIVE SEARCH
Abbreviated Edition
technology
2013
Special Access Code
cs2013tech
Visit www.compstudy.com and register to receive full access
Sponsored By:
www.compstudy.com
© Copyright 1999-2013, Park Square Executive Search LLC. All Rights Reserved
2013 Compensation & Entrepreneurship Report in Technology
2013 Compensation & Entrepreneurship Report in Technology
Founder Compensation and Sponsor Information
TABLE OF CONTENTS
Letter to the Industry
Demographics3
On behalf of Park Square Executive Search, EY, WilmerHale, and Professor Noam
USD 1,000’s
Cash Compensation
Wasserman of Harvard Business School, I’d like to welcome you to the 2013 edition
$350
of our annual Compensation and Entrepreneurship Report in Technology. This
$300
Equity and Severance
CEO Compensation
by Headcount
4
5
Founder Cash Compensation
report—our fourteenth annual and largest to date—includes summaries and analysis
of compensation data collected from executives at more than 550 private companies
6
Founder Compensation and
Sponsor Information
7
from across the country in software, hardware, content, clean tech and other
$250
34.9
industries. The survey data for this edition were collected between May and August
of 2013.
$100
17
240.6
72
34.5
19
$200
$150
28
87.5
57
19.3
24
63.4
83.8
19.5
29.6
36.9
9.3
16.3
248.4
257.5
182.8
206.6
191.3
26
51.9
26.3
64.8
30.8
35.3
6
205.4
192.8
164.7
comparable compensation data to assist them in the critical decisions involved in
$0
174.6
180.8
152.3
CEO
Head of
Finance/CFO
Head of
Bus Dev/CBO
47.8
199.5
164.7
$50
This survey responds to our clients’ continuing need for better access to reliable,
18.5
260
Head of
Clinical Research
Head of
Regulatory Affairs
Research &
Develop/CSC
Head of
Platform Tech/CTO
148.7
Head of
Engineering
attracting, motivating and retaining key executives at private companies.
2012 Base Salary
2012 Bonus Received
2012 Unachieved Bonus
2013 Base Salary
2013 Target Bonus
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-
Founder Total Cash
Founder Equity Holdings
• Founder CEOs received a more substantial raise than their
non-founder peers: 2.5% vs 0.8%.
• 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.
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
Sponsor Information
free of charge to survey participants and is also available as a paid subscription.
Thanks for reading,
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.
Aaron Lapat
Managing Partner
Park Square Executive Search
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.
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
www.ey.com
#
www.compstudy.com | www.parksquare.com
www.compstudy.com | www.parksquare.com
#
7
2013 Compensation & Entrepreneurship Report in Technology
2013 Compensation & Entrepreneurship Report in Technology
CEO Compensation by Headcount
Demographics
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.
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.
Base Salary:
By Number of Full-time Employees
Geography
Equity:
By Number of Full-time Employees
1,000’s USD
$300
$250
$200
$150
$100
$50
$0
% respondents in this range
14%
% Fully Diluted Shares
$350
Financing Rounds Raised
25th
50th
Mean
75th
1–20 FTEs
123.8
181.5
183.7
226.3
21–40 FTEs
225
250
260.7
41+ FTEs
245
275
281.5
12%
10%
11.3
8%
12.2
6%
California
28.2
New England
20
15
Mid Atlantic
4%
7.6
Midwest
2%
0%
% respondents in this range
25
15.1
25th
50th
Mean
75th
1–20 FTEs
5
6.2
10.4
11.6
289
21–40 FTEs
3.6
5
5.3
7.4
306
41+ FTEs
3.7
5
5.3
6.2
West
25.6
South
10
22.3
21
17
16.3
11.6
5
0
0
1
2
3
4
11.8
5 or more
The geographic distribution in 2013 closely mirrors venture
capital funding trends, and the universe of private companies
at large.
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.
Business Segment
Headcount by Number of Full-Time Employees
Slice this data yourself at www.compstudy.com
% respondents in this range
1.5 3
Software
Communications
9.2
Hardware/Semi
14
52.9
8
IT Services/Consulting
Digital Media/Content/Information
% respondents in this range
50
40
30
20
44.9
Clean Tech
7.5
Healthcare IT
10
18.8
Other
3.9
Software companies continue to make up half of the population;
Clean Tech has been the fastest-growing segment over the past
three years.
0
1–20
21–40
14.4
41–75
22
76+
Respondent company headcounts were distributed similarly to
those in the 2012 survey, with a slightly higher percentage of
large companies this year.
Screenshot of online reporting tool
#
6
www.compstudy.com | www.parksquare.com
www.compstudy.com | www.parksquare.com
#
3
2013 Compensation & Entrepreneurship Report in Technology
2013 Compensation & Entrepreneurship Report in Technology
Cash Compensation
Equity and Severance
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.
Total Cash Compensation: Non-Founders
Equity Holdings
USD 1,000’s
% equity owned, fully diluted
$400
8
$350
54
$300
83
6
33
$250
23
17
$200
$150
7
131
250
76
49
17
63
41
16
41
259
182
$100
189
177
185
11.6
172
33
115
56
179
19
28
48
81
26
56
27
11.8
165 169
173 178
8
7
35
168
164
43
34
188
142 142
54
48
39
176
174
5
31
84
51
190
161
158
3
1
$0
0
COO
Head of
Finance/CFO
2012 Base Salary
Head of
Tech/CTO
Head of
Engineering
2012 Bonus Received
Head of
Sales
Head of
Marketing
2012 Unachieved Bonus
• 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.
Head of
Bus Dev/CBO
Head of
HR
Head of
Prof Svcs
2013 Base Salary
General
Counsel
6.2
5
2
$50
CEO
17
4
2.6
2.6
2
0.9
CEO
COO
1.1
1
Head of
Finance/CFO
1
Head of
Tech/CTO
Bonus as a Percentage of Base Salary
1
Head of
Engineering
2013 Target Bonus
• On average in 2012, non-founder executives
received 65.5% of their target bonuses, up from
60.3% in 2011.
1.2
1.2
0.6
Head of
Sales
0.8
0.7
Head of
Marketing
2013 Median
1.1
0.1
Head of
Bus Dev/CBO
0.2
0.5
Head of
HR
0.9
Head of
Prof Svcs
0.2
0.3
General
Counsel
2013 Mean
• These equity figures are averages covering
companies across the maturity and
fundraising spectrum.
• 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.
• As the chart below illustrates, only CEOs
consistently received any severance package.
• 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.
Severance Eligibility
% of base salary
% eligible for severance
70%
80
60%
70
18.6
50%
40%
60
20
17
30%
20%
16.3
12.1
9.4
46.3
31.1
11.6
38.7
25.7
10%
0%
8.6
31.9
22.3
22.2
28
48
14.9
31.8
25.3
16.2
COO
Head of
Finance/CFO
Head of
Tech/CTO
Head of
Engineering
5
4.8
27.1
22.5
15.8
Head of
Sales
Head of
Marketing
2012 Unachieved Bonus
17
40
26
28.4
16.1
22.9
17.7
30
21.6
Head of
Bus Dev/CBO
Head of
HR
Head of
Prof Svcs
General
Counsel
63.5
20
33.3
33.9
26.3
10
0
CEO
2012 Bonus Received
#
4
45.8
11
50
17.4
63.3
26
18.1
CEO
COO
Head of
Finance/CFO
Head of
Tech/CTO
Head of
Engineering
Head of
Sales
21
Head of
Marketing
25
26.2
Head of
HR
Head of
Prof Svcs
34.3
16.8
Head of
Bus Dev/CBO
General
Counsel
2013 Target Bonus
www.compstudy.com | www.parksquare.com
www.compstudy.com | www.parksquare.com
#
5
2013 Compensation & Entrepreneurship Report in Technology
2013 Compensation & Entrepreneurship Report in Technology
Cash Compensation
Equity and Severance
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.
Total Cash Compensation: Non-Founders
Equity Holdings
USD 1,000’s
% equity owned, fully diluted
$400
8
$350
54
$300
83
6
33
$250
23
17
$200
$150
7
131
250
76
49
17
63
41
16
41
259
182
$100
189
177
185
11.6
172
33
115
56
179
19
28
48
81
26
56
27
11.8
165 169
173 178
8
7
35
168
164
43
34
188
142 142
54
48
39
176
174
5
31
84
51
190
161
158
3
1
$0
0
COO
Head of
Finance/CFO
2012 Base Salary
Head of
Tech/CTO
Head of
Engineering
2012 Bonus Received
Head of
Sales
Head of
Marketing
2012 Unachieved Bonus
• 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.
Head of
Bus Dev/CBO
Head of
HR
Head of
Prof Svcs
2013 Base Salary
General
Counsel
6.2
5
2
$50
CEO
17
4
2.6
2.6
2
0.9
CEO
COO
1.1
1
Head of
Finance/CFO
1
Head of
Tech/CTO
Bonus as a Percentage of Base Salary
1
Head of
Engineering
2013 Target Bonus
• On average in 2012, non-founder executives
received 65.5% of their target bonuses, up from
60.3% in 2011.
1.2
1.2
0.6
Head of
Sales
0.8
0.7
Head of
Marketing
2013 Median
1.1
0.1
Head of
Bus Dev/CBO
0.2
0.5
Head of
HR
0.9
Head of
Prof Svcs
0.2
0.3
General
Counsel
2013 Mean
• These equity figures are averages covering
companies across the maturity and
fundraising spectrum.
• 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.
• As the chart below illustrates, only CEOs
consistently received any severance package.
• 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.
Severance Eligibility
% of base salary
% eligible for severance
70%
80
60%
70
18.6
50%
40%
60
20
17
30%
20%
16.3
12.1
9.4
46.3
31.1
11.6
38.7
25.7
10%
0%
8.6
31.9
22.3
22.2
28
48
14.9
31.8
25.3
16.2
COO
Head of
Finance/CFO
Head of
Tech/CTO
Head of
Engineering
5
4.8
27.1
22.5
15.8
Head of
Sales
Head of
Marketing
2012 Unachieved Bonus
17
40
26
28.4
16.1
22.9
17.7
30
21.6
Head of
Bus Dev/CBO
Head of
HR
Head of
Prof Svcs
General
Counsel
63.5
20
33.3
33.9
26.3
10
0
CEO
2012 Bonus Received
#
4
45.8
11
50
17.4
63.3
26
18.1
CEO
COO
Head of
Finance/CFO
Head of
Tech/CTO
Head of
Engineering
Head of
Sales
21
Head of
Marketing
25
26.2
Head of
HR
Head of
Prof Svcs
34.3
16.8
Head of
Bus Dev/CBO
General
Counsel
2013 Target Bonus
www.compstudy.com | www.parksquare.com
www.compstudy.com | www.parksquare.com
#
5
2013 Compensation & Entrepreneurship Report in Technology
2013 Compensation & Entrepreneurship Report in Technology
CEO Compensation by Headcount
Demographics
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.
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.
Base Salary:
By Number of Full-time Employees
Geography
Equity:
By Number of Full-time Employees
1,000’s USD
$300
$250
$200
$150
$100
$50
$0
% respondents in this range
14%
% Fully Diluted Shares
$350
Financing Rounds Raised
25th
50th
Mean
75th
1–20 FTEs
123.8
181.5
183.7
226.3
21–40 FTEs
225
250
260.7
41+ FTEs
245
275
281.5
12%
10%
11.3
8%
12.2
6%
California
28.2
New England
20
15
Mid Atlantic
4%
7.6
Midwest
2%
0%
% respondents in this range
25
15.1
25th
50th
Mean
75th
1–20 FTEs
5
6.2
10.4
11.6
289
21–40 FTEs
3.6
5
5.3
7.4
306
41+ FTEs
3.7
5
5.3
6.2
West
25.6
South
10
22.3
21
17
16.3
11.6
5
0
0
1
2
3
4
11.8
5 or more
The geographic distribution in 2013 closely mirrors venture
capital funding trends, and the universe of private companies
at large.
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.
Business Segment
Headcount by Number of Full-Time Employees
Slice this data yourself at www.compstudy.com
% respondents in this range
1.5 3
Software
Communications
9.2
Hardware/Semi
14
52.9
8
IT Services/Consulting
Digital Media/Content/Information
% respondents in this range
50
40
30
20
44.9
Clean Tech
7.5
Healthcare IT
10
18.8
Other
3.9
Software companies continue to make up half of the population;
Clean Tech has been the fastest-growing segment over the past
three years.
0
1–20
21–40
14.4
41–75
22
76+
Respondent company headcounts were distributed similarly to
those in the 2012 survey, with a slightly higher percentage of
large companies this year.
Screenshot of online reporting tool
#
6
www.compstudy.com | www.parksquare.com
www.compstudy.com | www.parksquare.com
#
3
2013 Compensation & Entrepreneurship Report in Technology
2013 Compensation & Entrepreneurship Report in Technology
Founder Compensation and Sponsor Information
TABLE OF CONTENTS
Letter to the Industry
Demographics3
On behalf of Park Square Executive Search, EY, WilmerHale, and Professor Noam
USD 1,000’s
Cash Compensation
Wasserman of Harvard Business School, I’d like to welcome you to the 2013 edition
$350
of our annual Compensation and Entrepreneurship Report in Technology. This
$300
Equity and Severance
CEO Compensation
by Headcount
4
5
Founder Cash Compensation
report—our fourteenth annual and largest to date—includes summaries and analysis
of compensation data collected from executives at more than 550 private companies
6
Founder Compensation and
Sponsor Information
7
from across the country in software, hardware, content, clean tech and other
$250
34.9
industries. The survey data for this edition were collected between May and August
of 2013.
$100
17
240.6
72
34.5
19
$200
$150
28
87.5
57
19.3
24
63.4
83.8
19.5
29.6
36.9
9.3
16.3
248.4
257.5
182.8
206.6
191.3
26
51.9
26.3
64.8
30.8
35.3
6
205.4
192.8
164.7
comparable compensation data to assist them in the critical decisions involved in
$0
174.6
180.8
152.3
CEO
Head of
Finance/CFO
Head of
Bus Dev/CBO
47.8
199.5
164.7
$50
This survey responds to our clients’ continuing need for better access to reliable,
18.5
260
Head of
Clinical Research
Head of
Regulatory Affairs
Research &
Develop/CSC
Head of
Platform Tech/CTO
148.7
Head of
Engineering
attracting, motivating and retaining key executives at private companies.
2012 Base Salary
2012 Bonus Received
2012 Unachieved Bonus
2013 Base Salary
2013 Target Bonus
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-
Founder Total Cash
Founder Equity Holdings
• Founder CEOs received a more substantial raise than their
non-founder peers: 2.5% vs 0.8%.
• 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.
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
Sponsor Information
free of charge to survey participants and is also available as a paid subscription.
Thanks for reading,
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.
Aaron Lapat
Managing Partner
Park Square Executive Search
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.
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
www.ey.com
#
www.compstudy.com | www.parksquare.com
www.compstudy.com | www.parksquare.com
#
7
A SERVICE FROM
PARK SQUARE
EXECUTIVE SEARCH
Abbreviated Edition
technology
2013
Special Access Code
cs2013tech
Visit www.compstudy.com and register to receive full access
Sponsored By:
www.compstudy.com
© Copyright 1999-2013, Park Square Executive Search LLC. All Rights Reserved