SaaStr · 2023-08-15
· 1023d
Outside CEO Compensation Structure: Equity, Cash, and Total Dilution Analysis
This article outlines typical compensation packages for non-founder CEOs joining startups, covering equity expectations (4-8%), cash salary ranges ($250k-$500k+ OTE), and hidden dilution costs from new management hires and expanded option pools. The author emphasizes that total equity dilution often exceeds the CEO's direct grant due to associated hiring and team expansion.
Metrics in this report
Management Team Dilution
5%%
typical estimate
New management team brought by outside CEO
Outside CEO Base Salary - Early Stage
$250,000$
straw-man assumption
Early-stage startups plus bonus
Outside CEO Equity Grant - Early Stage
6-8%%
typical range
Early-stage startups
Outside CEO Equity Grant - Mid Stage
4-5%%
typical range
Mid-stage startups
Outside CEO OTE - Post Large Round
$500,000$
maximum threshold
After significant fundraising rounds
Outside CEO Salary - Post Large Round
$350,000-$400,000$
minimum expectation
After $15m-$20m+ rounds
Stock Option Pool Expansion
8-10%%
typical range
Additional option pool for new hires