What Is The Salary Of A Startup CEO?
The thing that you must consider when looking at the salary of a Startup CEO is that their base salary does not mean anything. We hear about CEOs taking $1 salaries all the time. So you might ask, how are these guys still living in mansions and drive lambos? CEOs have bonuses that stack up like crazy. Depending on the startup, CEO’s overall yearly salary could 3-4x their base salary.
Startup CEO Salary
Buffer, a social sharing startup, is one of the only startups out there to release full data on the team’s salary. This is buffer team’s salary:
- happiness hero = $45,000
- content crafter = $50,000
- engineer = $60,000
- designer = $60,000
- Operations officer base = $70,000
- Executive officer base = $75,000
You might say, “eh this doesn’t look that bad at all”. You’re right, these are pretty decent numbers for a startup’s team payroll, some would argue that it isn’t enough because of how well Buffer is doing. Here’s the catch, this is only the base salary. Buffer adds a lot more of bonuses. This is how Buffer calculates their employee’s salaries. Salary = job type X seniority X experience + location (+ $10K if salary choice). Now with this formula, your looking at a much much bigger salary.
You might be a little bit confused with the seniority part of the equation. Here’s an example. seniority = base multiplier, therefore their startup CEO salary with seniority is base salary + 20% and 12k/$m revenue. Then there is experience multiplier which multiplies the overall salary by a certain amount based on their experience and level of work. The startup CEO in this example gets a multiplier of 1.3x You get an extra bonus for choosing a more polluted location as well. For example choosing a location like San Francisco would put an additional 22,000$ in your pockets.
This is why you shouldn’t always be feeling bad for certain startup CEOs that make under 75,000 in base salary a year. In other words, you should disregard their base salary because bonus and stock options plus equity etc. all comes into play throughout the entire startup. If you are still into startup CEO’s base salary, here are some data that shows how much they make. Picture by TNW
Paypal co founder, Peter Thiel, openly said that startup CEO should not be paying themselves too much because the failure rate is much higher for startup CEOs that pay themselves a high amount. It is commonly said that a CEO should cap it’s salary at nomore than $120,000. Like Steve Jobs said, “The reward should come from the growth of the company.” With the high bonus and equity, a minimum salary should be good enough for a startup CEO. During the early growth stage of a startup where the company is barely generating any revenue, it is very common that startup CEOs take a salary that is under $50,000 with no bonus. Doing that is still better than bootstrapping on your own though!