Excerpt From The Small (Under $10 Million Revenues) Private Company Executive Compensation Digest 2013-2014
Table of Contents Section Executive Summary 4 Chief Executive Officer (CEO) 10 President 27 Senior Operations Executive (COO) 45 Senior Finance Executive (CFO) 63 Senior Marketing Executive (CMO) 81 Senior Sales Executive (CSO) 99 Senior Information Technology Executive (CTO) 117 Senior Research/Engineering Executive (Head of R&D) 135 CEO Benefits and Perquisites 153 Senior Executive Benefits and Perquisites 166 Best Practices Guidance 179 Appendix 187 2
Table of and Graphs CEO Compensation 2012 Total CEO Compensation By Quartile 18 2012 Median Total CEO Compensation by Company Revenue Range 19 2012 Top Quartile Total CEO Compensation by Company Revenue Range 20 2012 Median Total CEO Compensation by Number of Employees 21 2012 Top Quartile CEO Compensation by Number of Employees 22 2012 Median Total CEO Compensation by Industry 23 2012 Median CEO Compensation By Ownership Type 24 2012 Top Quartile CEO Compensation By Ownership Type 25 2013 CEO Cash Compensation (Salary and Expected Bonus) By Quartile 26 2013 Median CEO Cash Compensation By Revenue Size Range 27 2013 Top Quartile CEO Cash Compensation By Revenue Size Range 28 2013 Median CEO Cash Compensation By Employee Size Range 29 2013 Top Quartile CEO Cash Compensation By Employee Size Range 30 2013 Median CEO Cash Compensation By Ownership Type 31 2013 Top Quartile CEO Cash Compensation By Ownership Type 32 3
Table of and Graphs Presidents Compensation 2012 Total President Compensation By Quartile 18 2012 Median Total President Compensation by Company Revenue Range 19 2012 Top Quartile Total President Compensation by Company Revenue Range 20 2012 Median Total President Compensation by Number of Employees 21 2012 Top Quartile President Compensation by Number of Employees 22 2012 Median Total President Compensation by Industry 23 2012 Median Presidents Compensation By Ownership Type 24 2012 Top Quartile President Compensation By Ownership Type 25 2013 President Cash Compensation (Salary and Expected Bonus) By Quartile 26 2013 Median President Cash Compensation By Revenue Size Range 27 2013 Top Quartile President Cash Compensation By Revenue Size Range 28 2013 Median President Cash Compensation By Employee Size Range 29 2013 Top Quartile President Cash Compensation By Employee Size Range 30 2013 Median President Cash Compensation By Ownership Type 31 2013 Top Quartile President Cash Compensation By Ownership Type 32 4
Table of and Graphs Presidents Compensation 2012 Total President Compensation By Quartile 36 2012 Median Total President Compensation by Company Revenue Range 37 2012 Top Quartile Total President Compensation by Company Revenue Range 38 2012 Median Total President Compensation by Number of Employees 39 2012 Top Quartile President Compensation by Number of Employees 40 2012 Median Total President Compensation by Ownership Type 41 2012 Top Quartile Presidents Compensation By Ownership Type 42 2012 Median President Compensation By Industry 43 2012 Top Quartile President Compensation By Industry 44 2013 President Cash Compensation (Salary and Expected Bonus) By Quartile 45 2013 Median President Cash Compensation By Revenue Size Range 46 2013 Top Quartile President Cash Compensation By Revenue Size Range 47 2013 Median President Cash Compensation By Employee Size Range 48 2013 Top Quartile President Cash Compensation By Employee Size Range 49 2013 Median President Cash Compensation By Ownership Type 50 2013 Top Quartile President Cash Compensation By Ownership Type 51 5
Table of and Graphs COO (or Equivalent) Compensation 2012 Total COO Compensation By Quartile 56 2012 Median Total COO Compensation by Company Revenue Range 57 2012 Top Quartile Total COO Compensation by Company Revenue Range 58 2012 Median Total COO Compensation by Number of Employees 59 2012 Top Quartile COO Compensation by Number of Employees 60 2012 Median Total COO Compensation by Ownership Type 61 2012 Top Quartile COOs Compensation By Ownership Type 62 2012 Median COO Compensation By Industry 63 2012 Top Quartile COO Compensation By Industry 64 2013 COO Cash Compensation (Salary and Expected Bonus) By Quartile 65 2013 Median COO Cash Compensation By Revenue Size Range 66 2013 Top Quartile COO Cash Compensation By Revenue Size Range 67 2013 Median COO Cash Compensation By Employee Size Range 68 2013 Top Quartile COO Cash Compensation By Employee Size Range 69 2013 Median COO Cash Compensation By Ownership Type 70 2013 Top Quartile COO Cash Compensation By Ownership Type 71 6
Table of and Graphs CFO (or Equivalent) Compensation 2012 Total CFO Compensation By Quartile 76 2012 Median Total CFO Compensation by Company Revenue Range 77 2012 Top Quartile Total CFO Compensation by Company Revenue Range 78 2012 Median Total CFO Compensation by Number of Employees 79 2012 Top Quartile CFO Compensation by Number of Employees 80 2012 Median Total CFO Compensation by Ownership Type 81 2012 Top Quartile CFOs Compensation By Ownership Type 82 2012 Median CFO Compensation By Industry 83 2012 Top Quartile CFO Compensation By Industry 84 2013 CFO Cash Compensation (Salary and Expected Bonus) By Quartile 85 2013 Median CFO Cash Compensation By Revenue Size Range 86 2013 Top Quartile CFO Cash Compensation By Revenue Size Range 87 2013 Median CFO Cash Compensation By Employee Size Range 88 2013 Top Quartile CFO Cash Compensation By Employee Size Range 89 2013 Median CFO Cash Compensation By Ownership Type 90 2013 Top Quartile CFO Cash Compensation By Ownership Type 91 7
Table of and Graphs Marketing Leader (CMO, VP Marketing or Equivalent) Compensation 2012 Total Marketing Leader Compensation By Quartile 96 2012 Median Total Marketing Leader Compensation by Company Revenue Range 97 2012 Top Quartile Total Marketing Leader Compensation by Company Revenue Range 98 2012 Median Total Marketing Leader Compensation by Number of Employees 99 2012 Top Quartile Marketing Leader Compensation by Number of Employees 100 2012 Median Total Marketing Leader Compensation by Ownership Type 101 2012 Top Quartile Marketing Leaders Compensation By Ownership Type 102 2012 Median Marketing Leader Compensation By Industry 103 2012 Top Quartile Marketing Leader Compensation By Industry 104 2013 Marketing Leader Cash Compensation (Salary and Expected Bonus) By Quartile 105 2013 Median Marketing Leader Cash Compensation By Revenue Size Range 106 2013 Top Quartile Marketing Leader Cash Compensation By Revenue Size Range 107 2013 Median Marketing Leader Cash Compensation By Employee Size Range 108 2013 Top Quartile Marketing Leader Cash Compensation By Employee Size Range 109 2013 Median Marketing Leader Cash Compensation By Ownership Type 110 2013 Top Quartile Marketing Leader Cash Compensation By Ownership Type 111 8
Table of and Graphs Sales Leader (CSO, VP Sales or Equivalent) Compensation 2012 Total Sales Leader Compensation By Quartile 116 2012 Median Total Sales Leader Compensation by Company Revenue Range 117 2012 Top Quartile Total Sales Leader Compensation by Company Revenue Range 118 2012 Median Total Sales Leader Compensation by Number of Employees 119 2012 Top Quartile Sales Leader Compensation by Number of Employees 120 2012 Median Total Sales Leader Compensation by Ownership Type 121 2012 Top Quartile Sales Leaders Compensation By Ownership Type 122 2012 Median Sales Leader Compensation By Industry 123 2012 Top Quartile Sales Leader Compensation By Industry 124 2013 Sales Leader Cash Compensation (Salary and Expected Bonus) By Quartile 125 2013 Median Sales Leader Cash Compensation By Revenue Size Range 126 2013 Top Quartile Sales Leader Cash Compensation By Revenue Size Range 127 2013 Median Sales Leader Cash Compensation By Employee Size Range 128 2013 Top Quartile Sales Leader Cash Compensation By Employee Size Range 129 2013 Median Sales Leader Cash Compensation By Ownership Type 130 2013 Top Quartile Sales Leader Cash Compensation By Ownership Type 131 9
Table of and Graphs IT Leader (CIO, VP IT or Equivalent) Compensation 2012 Total IT Leader Compensation By Quartile 136 2012 Median Total IT Leader Compensation by Company Revenue Range 137 2012 Top Quartile Total IT Leader Compensation by Company Revenue Range 138 2012 Median Total IT Leader Compensation by Number of Employees 139 2012 Top Quartile IT Leader Compensation by Number of Employees 140 2012 Median Total IT Leader Compensation by Ownership Type 141 2012 Top Quartile IT Leaders Compensation By Ownership Type 142 2012 Median IT Leader Compensation By Industry 143 2012 Top Quartile IT Leader Compensation By Industry 144 2013 IT Leader Cash Compensation (Salary and Expected Bonus) By Quartile 145 2013 Median IT Leader Cash Compensation By Revenue Size Range 146 2013 Top Quartile IT Leader Cash Compensation By Revenue Size Range 147 2013 Median IT Leader Cash Compensation By Employee Size Range 148 2013 Top Quartile IT Leader Cash Compensation By Employee Size Range 149 2013 Median IT Leader Cash Compensation By Ownership Type 150 2013 Top Quartile IT Leader Cash Compensation By Ownership Type 151 10
Table of and Graphs R&D Leader (VP R&D, Engineering or Equivalent) Compensation 2012 Total R&D Leader Compensation By Quartile 156 2012 Median Total R&D Leader Compensation by Company Revenue Range 157 2012 Top Quartile Total R&D Leader Compensation by Company Revenue Range 158 2012 Median Total R&D Leader Compensation by Number of Employees 159 2012 Top Quartile R&D Leader Compensation by Number of Employees 160 2012 Median Total R&D Leader Compensation by Ownership Type 161 2012 Top Quartile R&D Leaders Compensation By Ownership Type 162 2012 Median R&D Leader Compensation By Industry 163 2012 Top Quartile R&D Leader Compensation By Industry 164 2013 R&D Leader Cash Compensation (Salary and Expected Bonus) By Quartile 165 2013 Median R&D Leader Cash Compensation By Revenue Size Range 166 2013 Top Quartile R&D Leader Cash Compensation By Revenue Size Range 167 2013 Median R&D Leader Cash Compensation By Employee Size Range 168 2013 Top Quartile R&D Leader Cash Compensation By Employee Size Range 169 2013 Median R&D Leader Cash Compensation By Ownership Type 170 2013 Top Quartile R&D Leader Cash Compensation By Ownership Type 171 11
Table of and Graphs R&D Leader (VP R&D, Engineering or Equivalent) Compensation 2012 Total R&D Leader Compensation By Quartile 156 2012 Median Total R&D Leader Compensation by Company Revenue Range 157 2012 Top Quartile Total R&D Leader Compensation by Company Revenue Range 158 2012 Median Total R&D Leader Compensation by Number of Employees 159 2012 Top Quartile R&D Leader Compensation by Number of Employees 160 2012 Median Total R&D Leader Compensation by Ownership Type 161 2012 Top Quartile R&D Leaders Compensation By Ownership Type 162 2012 Median R&D Leader Compensation By Industry 163 2012 Top Quartile R&D Leader Compensation By Industry 164 2013 R&D Leader Cash Compensation (Salary and Expected Bonus) By Quartile 165 2013 Median R&D Leader Cash Compensation By Revenue Size Range 166 2013 Top Quartile R&D Leader Cash Compensation By Revenue Size Range 167 2013 Median R&D Leader Cash Compensation By Employee Size Range 168 2013 Top Quartile R&D Leader Cash Compensation By Employee Size Range 169 2013 Median R&D Leader Cash Compensation By Ownership Type 170 2013 Top Quartile R&D Leader Cash Compensation By Ownership Type 171 12
Executive Summary Chief Executive Research surveyed 1,233 companies in April 2013 about their 2012 fiscal year compensation levels and practices, as well as their expected cash compensation levels for senior executives in 2013. Data from the 250 private companies with < $10 M in revenues that responded are included in this report. The median < $10 M revenue total CEO compensation package was $225,000 The top quartile total compensation was $586,000 (160% more than the median) Bottom quartile total compensation was $112,000 (50.2% less than the median) The average total compensation was $1,227,975 (skewed by equity gains among top 10%) Big differences in CEO compensation between companies with < $2 M vs. those with $2 M to $5 M in revenue, but less substantial differences between $2 M to $4.9 M and $5 to $9.9 M Big differences in CEO compensation and composition by type of ownership Private equity and venture capital owned companies have the highest median base salaries and total compensation packages for CEOs and senior executives and this differential increases among top quartile companies 13
Executive Summary Other than the CEO, the highest paid median senior executive titles, in rank order are: Chief sales executive (median total compensation of $203,000) Chief information officer -- or equivalent (median compensation of $197,500) Chief marketing officer (median compensation of $155,000) President (median compensation of $153,000) The composition of the pay packages vary widely by title For example, Presidents and heads of R&D have the highest median base salaries after the CEO, but chief sales officers have the highest bonuses on average While there is a correlation between compensation packages and company size, there are many exceptions Many early stage companies have more generous equity packages than their larger peers Many of the larger Top senior executives in private companies are paid substantially less than comparable public company executives Though many senior executives are compensated with equity or phantom equity plans, the gains in these instruments are not frequently measured This causes total true compensation numbers to not be captured each year Private equity and venture capital funded companies typically do a better job of consistently valuing and measuring equity gains Most private companies are not optimizing compensation as a strategic incentive for their CEOs and senior executive teams Best performing private equity, venture capital and family enterprises know the value of strategic incentives for CEOs and top managers, but more than half of private companies are not utilizing many of them 14
2012 Median Compensation in Private Companies with Less than $10 Million in Company Revenue $250,000 $225,000 $200,000 $203,000 $197,500 $150,000 $153,000 $153,000 $148,500 $155,000 $153,000 $106,000 $100,000 $50,000 $- CEO President COO CFO CMO CSO CIO R&D HR Perks $5,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 Benefits $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 Equity $- $0 $0 $0 $0 $0 $50,000 $0 $0 Bonus $30,000 $5,000 $10,000 $10,000 $12,000 $60,000 $4,500 $5,000 $8,000 Base Salary $170,000 $125,000 $120,000 $115,500 $120,000 $120,000 $120,000 $125,000 $75,000 Total $225,000 $153,000 $153,000 $148,500 $155,000 $203,000 $197,500 $153,000 $106,000 15
No One Is Average Big Differences Across Factors There are large variations in CEO and Senior Executive Compensation by Company Revenue Size Industry Growth and Profit Levels Type of Ownership (e.g., Private Equity, VC, Family Owned) Quartile (Top 25% Companies vs. Median and Average Companies) Full details by each of these variables, as well as best practices in executive compensation and long term incentives among outperforming private companies, refer to the full report. For more information, go to: www.chiefexecutive.net/emerging 16