We’ve seen a wide range of CEO salaries in our portfolio, from as low as $35k annually to as much as $350k. While there is no dataset explicitly outlining salary levels at early stage SaaS companies, we have salary data from tech companies at IPO. This can give a sense for what the salary should be for a successfully exiting CEO. The data below shows the salaries of 117 SaaS company CEO’s at IPO.
A few observations stand out:
Some of the best CEO’s take the lowest salaries. Marc Benioff of Salesforce took a salary of $1 at IPO, Patrick Shiong of Nant Health and Sytse Sijbrandij of Gitlab took no salary, Dustin Moskovitz from Asana took $1, and Thomas Siebel of C3 gets paid about $6k. These individuals were independently wealthy before the IPO, but it is good to see a CEO pass up a big salary if they can and sets a tone for the entire company.
$335k is the median for a very successful company. Keep in mind, the median salary of $335,280 is for the CEO of a SaaS company about to go public. In other words, these companies were all tremendously successful up to the point of going public, yet the CEO’s salary was still lower than that we’ve seen for some venture backed large startups. Be sure to temper your salary accordingly based on the stage of your company.
Other forms of comp include options and bonuses. Note the median bonus was $167k and median option grant had a value of $137k. A performance bonus annually is expected, and a founder will be granted stock as the Company matures and becomes more successful.
Before the IPO, some of the founders took options worth fantastic sums. Drew Houston at Dropbox took options worth $109mm the year before IPO. Ryan Smith at Qualtrics took $142mm. As a CEO, so long as you’re driving fantastic growth and value, it’s not out of line to expect additional option grants. Good investors have no problem rewarding CEOs that are performing.
We hope the data above is helpful in setting salary expectations. Keep it as low as possible if you can, expect option grants and bonuses for success, and keep in mind the real source of value is your equity.
Sammy is the Managing Partner and Co-Founder of Blossom Street Ventures. Visit us at blossomstreetventures.com and email directly at sammy@blossomstreetventures.com. We invest in companies with run rate revenue of $3mm to $30mm, with year over year growth of 20% to 100%+ depending on revenue. We lead or follow in growth rounds and special situations like inside rounds, small rounds, rushed rounds, corralling investors with our term sheet, cap table clean up, and extensions. We can commit in 3 weeks and our check is $1mm to $4mm. Also visit https://blossomstreetventures.com/metrics/ for always up-to-date SaaS metrics.
