As competition for tech talent heats up, the 2021 Australian Startup Salary Guide has laid out the average salaries for co-founders, chief executives and all manner of other startup roles, with annual salaries ranging from $42,000 to upwards of $600,000.
The report comes from Think & Grow and KPMG, in collaboration with AirTree’s Emily Close and Square Peg’s Imogen Baxter, who collated data from 140 companies and more than 3000 jobs.
Businesses ranged from those at the earliest stages with 10 or fewer employees, to those with up to 500, and from those that are yet to raise a dollar to those that have attracted $100 million or more in capital.
How much do startups pay?
For businesses that have raised between $0 and $5 million, chief executive officers are taking home salaries of between $42,000 and $365,000. The mean salary is $152,000, with average equity packages of 0.07%.
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Founders and co-founders are taking home between $42,000 and $294,620, with a mean salary of $117,875. Average equity packages remained fairly small, however, with an average of 0.09%.
For startups that have raised between $5 and $25 million, the lowest base salary for CEOs increases to $100,000, while the maximum remains fairly steady at $390,000. The mean salary is $213,191.
Equity also increases considerably, with CEOs holding an average of 7.3%.
For founders and co-founders at this stage, salaries range from $165,000 to $250,000. The mean salary is $205,000. However, average equity holdings remain low at 0.3%.
For those businesses that have raised $25 million or more, salaries predictably increase across the board.
At this stage, CEOs are earning salaries of between $120,000 and $610,000. The mean salary is $275,384. Average equity dips again, however, to 0.02%.
The mean salary for founders and co-founders is $289,879, with pay packets ranging from $200,000 to $449,156. Average equity held by founders is less than 0.05%
As the report noted, it is not uncommon for CEOs to be paid more than co-founders at the later stages.
For businesses that have raised more than $25 million, general managers and country managers are also well compensated.
The mean salary for country managers is $231,513, with equity packages averaging 0.15%. For general managers, the mean salary is $228,156, with equity packages averaging 0.04%.
How much are engineers paid?
The report also breaks down salaries in various departments, including research and engineering, sales, product, design and data science.
The mean salary for a senior developer at a business that has raised less than $5 million, for example, is $144,333, however there is generally no equity package.
Senior DevOps engineers at businesses that have raised between $5 million and $25 million are taking home a mean salary of $163,000, with average equity packages of 0.08%.
Junior software engineer salaries range between $50,000 and $100,000, with a mean salary of $81,429 and an average equity package of 0.02%.
For businesses that have raised $25 million or more, mean salaries for senior front-end and back-end engineers is about $150,000.
You can find the full report with a breakdown of salaries for various roles and departments here.
How important is equity in startup remuneration?
The majority of people in senior-level positions also have significant equity packages, which are not necessarily reflected in the salary data.
In total, 49% of all employees had equity allocations forming part of their remuneration packages.
Of those in executive roles, 64% participated in employee share schemes, holding an average of around $167,000 in equity value.
Of those in non-executive roles, 45% participate in employee share schemes, with average equity holdings of about $17,000.
Many employees in C-level or ‘head of’ roles had equity packages worth two to three times their base salary, the report found. Some had equity worth up to 10 times their salaries.
The report shows the growing importance of rewards beyond a base salary package when trying to secure the best talent.
Almost all of the businesses surveyed (97%) said they have hired in the past 12 months. However 42% noted that over the past 18 months hiring has become more challenging.
A third of all roles (31%) have taken more than 60 days to hire for.
In KPMG’s most recent High Growth Ventures Founder’s Report, half of the founders surveyed cited hiring challenges as one of their biggest barriers to success.
With the threat of The Great Resignation looming, plus a tech talent shortage and international borders remaining stubbornly closed, things don’t look to be improving any time soon.
Strong wage growth, meaning some startups are simply unable to compete when it comes to pay packets.
“The conversation must become about ‘total reward’,” Think & Grow co-founders Anthony Sochan and Jonathan Jeffries said in their introduction to the report.
That total reward includes tangible benefits such as take-home pay, bonuses, super and equity; as well as intangible benefits like work-life balance, training opportunities and culture and values alignment.