According to an executive compensation study of private
businesses released today, non-founder C-suite executives at life
sciences and healthcare companies saw their cash compensation
increase by three percent year-over-year, while comparable
executives at private technology firms experienced an average
increase of 1.6 percent.
The CompStudy, now in its 14th year, also revealed compensation
levels and trends about specific functional roles. In terms of
target bonuses, non-founder CEOs at private technology companies
surveyed saw 4.4 percent lower target bonuses in 2013 than in 2012,
with the average dropping to $131,000. The 1.6 percent increase in
average CEO pay was attributable to the bump in their base salaries
from $250,000 in 2012 to $259,000 in 2013. CEOs at private life
sciences firms surveyed experienced a 2.5 percent increase in
target bonuses and a one percent increase in base salaries,
bringing their average bonus and base up to $124,000 and $306,000,
respectively.
On prior-year bonus attainment, life sciences non-founder CEOs
also fared better than their technology counterparts. Life sciences
CEOs received, on average, 71.9 percent of their at-plan cash
bonus. Technology non-founder CEOs received 60.1 percent of their
comparable target.
The CompStudy is produced by Park Square Executive Search in
collaboration with Professor Noam Wasserman of the Harvard Business
School, and is sponsored by Ernst & Young, LLP and WilmerHale.
The 2013 CompStudy survey includes over 800 private companies and
includes data on more than 4,000 executives.
"Over the past year, we have seen an increase in target cash
compensation of approximately three percent among CXOs at
private life sciences companies. This growth continues to build on
the compensation recovery that started last year, after we saw the
lowest growth in CompStudy history during the recent economic
downturn. This year, M&A activity is up, the IPO window is
open, good companies are still getting funded, and the war for
talent appears to be alive and well," said Erik Lundh,
Managing Partner, Park Square Executive Search.
"Acquiring strong talent is a critical factor in the
successful expansion of a high-growth company," said Bryan
Pearce, Americas Director, Entrepreneur Of The Year® and
Venture Capital Advisory Group for EY. "The competition for
talent that is capable of scaling a company continues to place an
upward pressure on compensation."
The study is the most comprehensive survey of executive
compensation among privately-held, emerging technology and life
sciences companies and the first to make this information readily
available. The results are used as an authoritative guide by
venture capital firms and their portfolio companies to make
critical decisions regarding attracting, rewarding and retaining
key talent.
"As we head into the end of 2013, boards will be making
decisions about 2013 annual bonuses, as well as establishing 2014
budgets for compensation and equity. The CompStudy data would be a
powerful guide in that decision making process, ensuring boards
that their compensation levels remain competitive as the market for
talent heats up," said Kimberly Wethly, Partner,
WilmerHale.
Study results are available at www.compstudy.com and will be explained in
detail today during two separate technology- and life
sciences-focused webcasts. The webcasts, led by senior
practitioners at Park Square, EY and WilmerHale, will discuss how
life sciences and technology companies have reacted to the state of
the economy and what the future might hold for these VC-backed
companies.
Click here to register.
Methodology
More than 800 privately-held, emerging technology and life sciences companies throughout the United States took part in the survey, which delved into the compensation, bonus and equity packages of top executive positions, including Chief Executive Officer, President/Chief Operating Officer and Chief Financial Officer. The data was analyzed in aggregate with detailed views by position looking at: industry vertical, product stage, revenue, headcount, geography, founder status and financing stage. More than 85 percent of the surveyed companies have fewer than 75 employees.
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