CEO Compensation

There is no such thing as an average salary for a start-up CEO. This is because there are too many types of start-ups. Does your start-up have venture capital or angel investment or are the owners self-funding. How large do you expect to be on day 1 and how quickly do you expect to grow?

There are just too many questions. Maybe start with giving more specifics. What industry, how big, what kind of experience does this CEO bring to the table, what relationship does the CEO have with the founder(s).

All recruiting firms put together surveys for executive comp. Your friendly VCs receive these all the time and will happily share them with you. Generally, I think these surveys overstate comp as they are compiled by big-name recruiting firms who typically only survey startups that are somewhat established and well-funded.

Of course this will vary widely by stage, location and caliber of CEO but, in my experience, typical comp for a CEO joining a startup at the Series A stage these days would be in the ballpark of:

Salary: $125k to $175k

Bonus: up to 100% of salary at the discretion of the board

Sign-on: typically none, unless a relocation is required

Equity: 5% to 10% in stock options

Benefits: Same as offered to all employees in the startup

Agree with Justin on this it's tough to know. Would care sharing the industry your are thinking about? the stage of your startup, and the location?

Additionnaly, I read one about how the lower the CEO salary is the higher the chances of success. I completely disagree with this (for reference, an old blog post: http://entrepreneurshiptalk.wordpress.com/2010/02/05/low-ceo-salary-pay-determinant-success-factor-for-startups/), as the statistics and calculation used to come up to this are completely skewed.

The important in paying your CEO is: Is he/she going to bring the value you want for your startup? you pay someone to bring value. the CEO has to grow your company, grow the shareholder equity value and make a successful company. The compensation package has to be aligned with this period. For example, if you think the CEO of Oracle is the guy you need for your startup, you will have to shell out a few dozens of millions, but that could be totally worth it as VC would give you much more than that to fund you business (and his salary). but if you feel that Mr Joe from down the street is the right CEO for you, the economics will be different.

if you are self funded, make sure you compensation is as little as possible. You dont want to be eating your own children when you can use that capital to actually make your startup successful. You have to be 100% committed, give up the luxuries of life. Its usually those that have are willing to risk everything they have to get everything that they dont have who win big.