2009 Compensation Targets Flat for Technology C-Suite

The 10th annual Compensation and Entrepreneurship study conducted by J. Robert Scott and Ernst & Young LLP in collaboration with Professor Noam Wasserman at Harvard Business School, revealed that average base salaries for CEOs at the nearly 500 emerging, private technology firms totaled $231,000, compared to $230,000 in 2008. The study found that the heads of business development and marketing at technology companies saw their total cash compensation target decline by 3.6% in 2009 compared to 2008. 

“This is the first time in 10 years of conducting the study that we have seen anything other than an increase in technology executive total cash compensation. In fact, the average increase over the past nine years has been five percent annually,” said Aaron Lapat, managing director, J. Robert Scott. “Even though CEO bonuses across both sectors were lower than the prior year, the fact that these executives still received bonus payouts may speak to the confidence these companies have in their leadership and future growth. In terms of private life sciences companies, these executives may have experienced an increase in base salary because their compensation tends to be based more on clinical milestones. Clearly, the economy is driving change at these organizations.” 

The study also examined bonuses received in 2008. CEOs at the technology firms received 64% of their target bonus or an average of $61,000 in 2008, a 6% decline compared to 2007.

Life Sciences

The survey noted that C-suite executives at life sciences firms experienced an average increase of 3.5% in total cash target compensation year over year.  Among the more than 200 emerging, private life sciences firms surveyed, CEOs attained an average base salary of $273,000, up 3.2% from 2008. CEOs at these life sciences firms received average bonuses of $48,000 in 2008 – 44% of their target bonus, down from 73% the previous year. 

“These executive compensation results reflect the greater focus on capital efficiency and company performance that is especially important in current economic conditions — but for entrepreneurs and venture capital investors there remain many opportunities to form and grow a business because quality talent is currently available at very competitive compensation levels,” stated Bryan Pearce, Ernst & Young LLP, Americas Director, Venture Capital Advisory Group.