Bezos, Benihoff and Dorsey-times-two: What were these startup chiefs paid at the point of IPO?

Jack Dorsey

Twitter and Square co-founder Jack Dorsey. Source: AAP.

When you’re in the throes of running a startup, and struggling to keep your head above water, it can be tricky to know what to pay yourself as a founder, or when to start paying yourself at all.

It’s also difficult to collate any data on who’s paid what. It’s not public information, nor is it oft disclosed. Until a startup gets to a point of IPO.

Crunchbase has collated the salaries of the chief executives at 101 venture-backed startups at the time of their initial public offering, in order to try and make some sense of what a founder should be making when they reach that level of success.

And, actually, when looking at all the figures laid out, it’s hard to put a pattern together. Most salaries are six figures, but they vary wildly within that range. Some surpass US$1 million, others are a token $1.

All in all, the average salary compensation was US$311,000, not including bonuses and options.

Average bonus and other compensation was US$219,360. But, the big bucks came with the options compensation, which averaged out at almost US$2.6 million.

Even big-name founders weren’t necessarily raking it in, although clearly they’ve not done badly for themselves.

Jeff Bezos took a modest US$64,333 in annual salary as chief executive of Amazon. But he did own 48% of Amazon at the time it went public — something that clearly paid off in the long run.

From Twitter, Jack Dorsey took an annual salary of US$200,000, although his options compensation was worth a whopping US$11.3 million.

In his role as chief of Square, however, Dorsey was taking an annual salary of just US$3,750, with no bonus or options to top it up.

There could be an argument that when a company readies to IPO, there’s a case for paying the chief executive the market rate, to show accurate costs and profitability in the long run. But, clearly that’s not the case for every company.

Marc Benihoff, founder and chief of SalesForce, was paying himself $1 a year, for example. Patrick Soon Shiong of Nant Health was paying himself absolutely nothing.

Underpaying could also play well with both VC investors and potential shareholders, as it suggests the company is headed by someone who puts business success before their own wealth.

It can also be reassuring that those heading up these high-growth startups don’t necessarily need the money, personally.

Either way, it appears it’s a better time than ever to be a startup chief exec. While salaries seem interchangeable, they’re also increasing.

According to the Crunchbase figures, between 1998 and 2007, the median salary was US$156,000. Between 2008 and 2016, it was US$283,000.

You can see the full list of salaries here.

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