Executive Compensation Guide

2023 Expanded Edition

Looking for a new opportunity—or perhaps just thinking about it? We have some key insights for those looking to move into a new executive role. We updated our Executive Compensation Guide for the second half of 2023, adding information for directors, board members, fractional executives and more. And given that we are in the era of flux—have a dedicated section to negotiate the best severance package possible in case things don’t go as planned.

If companies want to engage and retain top executive talent, they have to craft compensation plans that will get the right executives, with the right know-how, to commit to them. But before you say “yes” to an offer, you want to make sure the juice is worth the squeeze. Is this company the right one for you? Do you believe in the product? Are they offering you a competitive compensation package?

While questions may abound, here are some essential tips to help you navigate the best way forward. Our Executive Compensation Guide covers executive and leadership compensation in the tech industry and is based on thousands of placements Betts has made over the last couple of years.

Overview

There Are 5 Parts to the Executive Compensation Guide:

2023 Executive Trends

Vetting a Company

Severance

Comp

Negotiation

Comp Breakdown

2023 Executive Trends

Tech jobs on the rise despite headlines

Major media coverage of big tech layoffs may make it seem like hiring has hit the brakes in this sector, what with BIG tech companies like Meta, Twitter, Microsoft, and Alphabet slashing personnel, but the story is more complex than the headlines would have you believe. While some companies are going through a correction, the tech unemployment rate is holding steady at about 2% as of May 2023 according to the most recent CompTIA report. The lay of the tech landscape is more robust than media coverage would have you believe. According to Business Insider, 79% of laid off tech workers are finding other jobs within three months and hiring data indicates that 58% of hiring managers plan to hire more full-time staff—the glass is indeed more than half full.

The rise of the fractional executive

Hybrid and flexible work arrangements have been gaining traction for the last few years and now industry leaders are joining the party. Say hello to EaaS—or “Expertise as a Service”—a growing niche of leaders, also known as fractional executives, who inhabit a blended role of advisor and interim executive.
They offer their expertise to companies on a part-time basis, often filling in leadership gaps or pinch-hitting during a new phase of a business’ growth. Reforge shares that Fractional executives are brought on to solve specific problems or run sub-divisions to allow a company to expand more quickly or improve in key areas. Different from advisors, who give feedback and guidance, but don’t follow through on their recommendations, fractional execs are brought on to be (temporary) rock stars.

Doing more with less—companies will be hiring smaller teams but ramping up efficiency

Tech companies are generally more reliant on outside capital than other industries. With the Fed raising interest rates ten consecutive times, pushing the benchmark borrowing rate to between 5% and 5.25%—and the collapse of several banks with deep ties to Silicon Valley—capital has become more scarce and expensive.

But companies still need to deliver on key objectives and planned benchmarks to make it to the next round of funding, so hiring top talent is still a priority. According to Dice, demand for tech talent remains high, with more than 375,000 tech jobs unfilled. The name of the game for the second half of 2023 (and beyond) is that long-term demand for tech talent will remain high with strong, if more judicious, hiring activity.

How to Vet a Company

Ask detailed questions about the following:

Key business metrics. In-depth questions about sales cycles, annual and monthly recurring revenue, quarter-over-quarter revenue growth, and customer acquisition costs will help you understand what is working well and where gaps need to be addressed. While it can be a delicate topic, we recommend asking questions about a company’s cash flow. If your compensation plan hinges on meeting specific benchmarks, it is hard to clarify your timeframe for success if you don’t know current churn and burn rates.

Product. Be sure you understand the product and the problem it seeks to solve. You want to ensure you can carefully assess the product/problem ecosystem because if you take the position, this rallying cry will become your mantra.

Executive Team. Before you commit to a company, it is essential to know its current executive team.

Who are they?
What have they done previously?
How long has this team been working together?
What is working well? What is not?

All this will help you understand the dynamics that will color your potential role at this company.

Current Sales, Marketing, and Customer Success team. The key to improving productivity lies with these team members; it is essential to invest some time in getting a good sense of this part of a company’s landscape so you can assess what recommendations you would make to move things forward.

Sales, Marketing, and Customer Success Process. You want to comprehend where the gaps are. Is the company all inbound? All outbound?

How robust is the marketing program?
What are the most successful channels to date? Why?

Find out where a company’s leads are really coming from and the cost of acquisition so you can see where improvements can be made.

Expectations. You cannot achieve what you do not understand—be sure to ask what expectations are for growth, hiring, budget, and more. If part of your job is to move the needle, ensure you have as much information as possible to understand best what it might take to meet the company’s expectations.

Tech Stack. It’s critical to understand the infrastructure behind the company’s product. Some key questions to ask include:

What is the company’s tech process?
What systems do they have in place?
What people support tech-build initiatives?
Is there a RevOps team in-house?

Find out where responsibility lies for things like crafting Salesforce reports so you can make the most impactful recommendations for how to optimize operations.

Vision. Having a good handle on what the next two to five years look like for the company is essential.

What is the plan for the product, and in what ways does it need to evolve to meet goals?
How do the team and company overall need to develop?
What systems or plans are in place to make this happen?
How could you help move the company closer to its goals?

All these questions are essential for understanding what your place would be in the company’s ecosystem.

Exit plan. It’s the BIG question: What is the exit strategy—Merger? Acquisition? Private Equity? IPO? Find out what the company is valued at today, the valuation goal for the intended exit plan, and the proposed timeline to make the magic happen.

What matters most?

Focus your attention on what matters most—the opportunity.

Do you believe in this company’s mission?
What do you think of their product?
Their leadership team?
Are your ethics in line with that of the company?

Be sure to ask the right questions so you can get a feel for whether this company is the right fit for you or not. Before progressing to the interview stage with C-level executives, ensure that the compensation band aligns with your expectations. You don’t want to invest time in an opportunity that does not fit your needs.

Here are some key issues to discuss during your interviews to uncover if this organization is the right next step for you.

Severance

Here are some concrete steps to getting the severance package you want:

Find out if the company has an existing severance policy.

Since companies are not required by law to offer severance to at-will employees, you want to inquire about whether the company has a defined severance package in place already.

Level with yourself.

The higher up you are on the org chart, the more negotiating power you have. An SVP is risking more than an AE. Candidates looking for roles leading teams have more latitude for upfront negotiations.

What’s the risk?

Do some research and talk to people you know about how the company is doing. Don’t rely on a talent acquisition executive to give you the full skinny on the role or whispers about the company.

Money is just one part of severance

For some, a lump-sum payment is less important than having the company pay and maintain health insurance and other benefits until you land a new opportunity. As well, for some, having severance paid out as salary can have beneficial impact in terms of taxes as lump sum severance payments are taxed as “bonuses” at a considerably higher rate. Consider the implications for your situation and ask for what would work best.

Lean away from negative talk.

This is not the time for belaboring global macroeconomic trends—instead, frame your severance pre-negotiation as protecting yourself from your role becoming redundant due to a merger or acquisition or from (feeling those headwinds?) layoffs due to business concerns or another pandemic. Your goal is to advocate for a potential downturn, not to turn off a prospective employer by pushing too hard on up-front severance negotiation. Read the room and step lightly.

According to the Wall Street Journal, “the best time to negotiate severance pay is when you and your employer don’t think you will need it: when you have been offered the job.” Some describe this type of pre-negotiation as akin to a prenuptial agreement, a practical arrangement in case things don’t go as planned.

The best time to think about the end of a job is before you even start it. Before we dig into how to negotiate the best comp plan possible, let’s talk severance.

With layoff headwinds blowing, the threat of job loss looms in a way that it didn’t in previous years. With a fear of being last one in, first one out, it’s not surprising that some candidates are planning for possible worst case scenarios. While most will not get a “golden parachute,” a carefully negotiated severance package and termination provisions—executives at all levels can negotiate severance packages before they accept a job offer. Of course, the higher you are on the org chart, the more likely you are to get a robust severance package. If you’re a VP-level or above, angle to pre-negotiate six months of severance.

It can be a bit confusing to negotiate the end before you’ve even begun, but you’ll be glad you did in case things don’t go as expected. For the average employee, severance is generally only offered after a year of service, and usually consists of one months’ pay per year worked in the tech world. The average we see here at Betts’ is three months—with candidates asking upfront for severance deals ranging from two to six months’ salary, depending on the position and company. High turnover in some industries, coupled with a tight labor market in others can help influence how willing a company may be to meet the request.

Compensation Negotiation

Determine your salary range and necessary options and benefits. Before negotiating, determine the salary range you are comfortable with and whether you can dispense with other aspects of executive compensation, like first-class travel, in lieu of different components, like education assistance, that might be more important for you. Create a list of must-haves and negotiables—it will help keep you focused on your goals when negotiating.

A note to the wise: if you know your number is out of a company’s range and is not likely to budge, be careful in going too far down the line with them.

Understand option terms and set equity goals. Smart companies lay out triggers to entice an executive to hit certain benchmarks. Review these specific terms carefully—for example, make sure you understand the difference between:

Single trigger versus double trigger versus common 4-year vesting
Extended exercise
Cashless exercise
Milestone payments. They can be the difference between retirement (or not) at the exit.

Lobby for the right to consult. Another way to build wealth is to monetize your non-competitive expertise via consulting work. When negotiating a compensation package, ensure that it includes a “right to consult” clause.

Do a SWOT analysis of the new opportunity and compare it with your current role. Articulate strengths, risks, opportunities, and threats and use this to frame your conversation when discussing compensation.

Wait to negotiate your compensation. Focus on the value you bring to the company before talking numbers. You want to sell yourself successfully before getting into a comp conversation. Address other aspects of your candidacy, like experience, skills, and vision. You want to ensure that the hiring team feels you are a top candidate before segueing into the comp negotiation dance.

Let the company make you an offer first. If they ask what you are looking for in a compensation package, counter with a request for their initial proposal. You want to avoid asking under their salary range and benefit offerings.

Above all, hold your ground and believe in your worth. Set a compensation package and let the company know it is one you would sign if the company is in agreement. You want to set yourself up for success, not buyer’s remorse.

Know where a company is in the startup lifecycle. Ensure the company’s exit strategy is one you can stand behind and that the timeline dovetails with your personal and professional goals. Getting in on the ground floor with a Seed or Series A-level company will likely yield more stock options and potential upside, but only if you believe in and can evangelize the company’s mission and product. If you are looking for a less risky situation, you may want to engage with a later-stage company.

Here are some key recommendations for comp negotiation to keep in mind:

Before you begin the comp negotiation dance, you want to understand the market and know your worth—this guide can help. As well, keep in mind that change is the only constant. Last year the job market was booming and flush with cash—today, inflation inches ever northward and a possible recession looms. When negotiating your comp plan, keep up and down cycles in mind—especially in the tech industry, which is sometimes known for short C-suite tenures.

Since executives assume significant responsibility and provide high value to companies, their compensation packages typically include more bells and whistles than for an average employee. Executive compensation packages generally include salary, benefits, signing, annual and retention bonuses, stock, equity options, and specific accelerators that kick in if certain benchmarks are met.

Generally speaking, we recommend focusing less on outright cash and more on ways to structure long-term wealth and financial protection with executive compensation packages.

Digging into the Details

Here, we begin to break down compensation plans for C-Suite and VP executive levels.

Compensation Tables by Venture Series Stage

Culling from Betts’ extensive data on hiring trends, we can show you, at each funding stage, the hires companies that worked with Betts made versus the greater United States startup community—the results will stop you in your tracks. In short—getting the right number of hires at the right time, with the right experience, at the right cost can be the difference between impressive growth and languishing stagnation. And hiring the right executive leaders at the right time is one of the most critical decisions a startup will ever make.

To View the Compensation Tables, please view on a larger device.

Compensation Breakdown

When you’re looking to determine what type of leader you need to hire, first look at Part 1 of our Scale Series, Hiring Guide: Seed to IPO, which breaks down hiring by each stage of the VC-funding journey.

Now that you got your next job as the executive to the stars, how will you scale your future team? As companies progress through the startup lifecycle, they must find a more efficient way to scale. To learn more about how Betts can help you calibrate your hiring strategy, chat with a team member today at bettsrecruiting.com/hire.

Scaling your organization efficiently with Betts Connect

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Chief Executive Officer (CEO)

Base

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25th%

$250,000

$275,000

$300,000

$325,000

$350,000

Median

$275,000

$300,000

$325,000

$350,000

$375,000

75th%

$325,000

$350,000

$375,000

$400,000

$425,000

Bonus

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25th%

25%

30%

40%

Median

50%

75th%

50%

75%

100%

Base

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25th%

Not Recommended

(Not enough data)

Not Recommended
(Not enough data)

$325,000

$350,000

Median

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$350,000

$400,000

75th%

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$400,000

$425,000

Bonus

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25th%

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20%

Median

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40%

75th%

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50%

Chief Operations Officer (COO)

Base

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25th%

Not Recommended

(Not enough data)

$250,000

$265,000

$300,000

$325,000

Median

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$275,000

$300,000

$325,000

$330,000

75th%

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$350,000

$375,000

$400,000

$425,000

Bonus

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25th%

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25%

30%

Median

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30%

25%

35%

75th%

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40%

Chief Financial Officer (CFO)

Chief Commercial Officer (CCO)

Base

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25th%

$275,000

$285,000

$300,000

Median

$300,000

$305,000

$310,000

$320,000

$325,000

75th%

$315,000

$350,000

$375,000

$400,000

Bonus

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25th%

20%

Median

35%

40%

75th%

50%

Base

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25th%

Not Recommended

(Not enough data)

$295,000

$300,000

Median

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$330,000

75th%

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$350,000

Bonus

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25th%

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10%

15%

Median

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15%

20%

75th%

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20%

30%

Chief People Officer (CPO)

Chief Marketing Officer (CMO)

Base

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25th%

Not Recommended

(Not enough data)

$252,500

$275,000

$290,000

Median

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$265,500

$300,000

$350,000

75th%

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$350,000

$400,000

Bonus

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25th%

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15%

20%

25%

Median

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25%

30%

75th%

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35%

40%

Chief Product Officer (CPO)

Base

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25th%

Not Recommended

(Not enough data)

$275,000

$300,000

Median

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$300,000

75th%

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$325,000

$350,000

Bonus

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25th%

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10%

15%

Median

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15%

20%

75th%

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20%

30%

Chief Revenue Officer (CRO)

Base

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25th%

Not Recommended

(Not enough data)

$225,000

$250,000

$265,000

Median

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$250,000

$275,000

$300,000

75th%

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$325,000

$350,000

$375,000

$400,000

Bonus

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25th%

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100%

Median

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100%

75th%

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100%

Fractional

Fractional in Tech

Hourly

Target/Hr

3 Month Retainers

Fractional CEO

250-500

350

$20k-50K

Fractional CFO

250-400

300

$15K - 30K

Fractional COO

250-400

300

$15K - 30K

Fractional Head of Marketing

200-400

250

10K-20K

Fractional Head of Sales

200-400

250

10K-20K

Fractional Head of People

200-400

225

6.5K - 20k

Advisors

Early Stage

Later Stage

Seed- Series B

Series C - Series E

Equity

0.25%

0.10%

Vesting

2 Years

Retainer

1-10K Annually

10-50k Annually

Number of Meetings

4 Average Meetings

VP of Sales

Base

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25th%

$215,000

$220,000

Median

$250,000

75th%

$275,000

Bonus

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25th%

100%

Median

100%

75th%

100%

VP of Marketing

Base

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25th%

Not Recommended

(Not enough data)

$220,000

$225,000

$250,000

Median

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$240,000

$250,000

$275,000

75th%

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$260,000

$275,000

$300,000

Bonus

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25th%

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10%

Median

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20%

75th%

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30%

VP of People Ops

Base

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25th%

Not Recommended

(Not enough data)

$235,000

$250,000

$270,000

Median

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$270,000

$300,000

75th%

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$300,000

$325,000

Bonus

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25th%

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Median

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10%

15%

20%

75th%

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10%

25%

VP of Finance

Base

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25th%

Not Recommended

(Not enough data)

$225,000

$270,000

$275,000

$300,000

Median

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$250,000

$280,000

$300,000

75th%

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$295,000

$315,000

Executive Compensation Guide

2023 Expanded Edition

Overview

There Are 5 Parts to the Executive Compensation Guide:

2023 Executive Trends

Vetting a Company

Severance

Comp

Negotiation

Comp Breakdown

2023 Executive Trends

Tech jobs on the rise despite headlines

The rise of the fractional executive

Doing more with less—companies will be hiring smaller teams but ramping up efficiency

How to Vet a Company

Ask detailed questions about the following:

What matters most?

Severance

Here are some concrete steps to getting the severance package you want:

Compensation Negotiation

Here are some key recommendations for comp negotiation to keep in mind:

Digging into the Details

Compensation Tables by Venture Series Stage

To View the Compensation Tables, please view on a larger device.

Compensation Breakdown

When you’re looking to determine what type of leader you need to hire, first look at Part 1 of our Scale Series, Hiring Guide: Seed to IPO, which breaks down hiring by each stage of the VC-funding journey.

Compensation by Role

Scaling your organization efficiently with Betts Connect

Chief Executive Officer (CEO)

Chief Operations Officer (COO)

Chief Financial Officer (CFO)

Chief Commercial Officer (CCO)

Chief People Officer (CPO)

Chief Marketing Officer (CMO)

Chief Product Officer (CPO)

Chief Revenue Officer (CRO)

Fractional

Advisors

VP of Sales

VP of Marketing

VP of People Ops

VP of Finance