2008 Startup Executive Compensation Survey

www.compstudy.
com
2008 Compensation & Entrepreneurship Report in Information Technology
2008
A Data in this report produced in collaboration with Professor Noam Wasserman of Harvard Business School
AAA
TABLE 1
A OF
CONTENTS
Letter to the Industry . . . . . . . . . . . . . . . . . . . . . .3
Summary of Results . . . . . . . . . . . . . . . . . . . . . . .4
Founders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Interview
Clinton W. Bybee, Co-founder and Managing Director –
ARCH Venture Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Carlos A. Riva, President & CEO – Verenium . . . . . . . . . . . . . . .18
2008 Compensation and Entrepreneurship

Report in Information Technology
Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
President/Chief Operating Officer . . . . . . . . . . . . . . . . . . . . . . . .28
Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
Chief Technology Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Head of Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Head of Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
Head of Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
Head of Business Development . . . . . . . . . . . . . . . . . . . . . . . . . .52
Head of Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
Head of Professional Services . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
About the Sponsors . . . . . . . . . . . . . . . . . . . . . . .67
Data in this report produced in collaboration with

Professor Noam Wasserman of Harvard Business School.
For more information on his work, please see
founderresearch.blogspot.com.
AAA
LETTER 3
A TO THE
INDUSTRY
We are pleased to present the 2008 edition of our Compensation and

Entrepreneurship Report in Technology. This Report, our ninth annual version,
includes summaries and analysis of compensation data collected from more than
340 private companies located throughout the country in the following six industry
segments: Software; Communications; Hardware, Semiconductors and Electronics;
Services, Consulting and Integration; Community, Content and Information
Providers; and a new category in 2008, Clean Technology. The survey data was
collected between April and June of 2008.
The Report also includes interviews with Carlos Riva, a serial entrepreneur, who
describes his experience as a founder and leader of multiple organizations, and Clint
Bybee, a prominent venture capitalist in the Advanced Materials sector.
Our continuing inspiration for this survey is to respond to our clients’ requests for
better access to reliable, comparable compensation data to assist them in the critical
decisions involved in attracting, motivating and retaining key executives at private
companies. Over the years we have been able to present the correlation between
executive compensation and a number of variables, including financing stage,
company size both in terms of revenue and headcount, founder/non-founder status,
industry segment, and geography. We have also been able to provide a number of
analytics on how an organization evolves with additional financing, Boards of Directors
compensation and make-up, and a granular view at company equity plans.
Our survey has evolved over the years based on input received directly from the
industry, and our hope is to continuously improve our data so that we can best serve
the needs of our clients in the Technology industry. In that regard, we encourage
readers of this publication to submit comments and suggestions to help us most
efficiently and accurately present the compensation dynamics of the market.
Suggestions and comments should be directed to Mike DiPierro of J. Robert Scott
(mike.dipierro@fmr.com).
Lastly, we would like to express our gratitude to Associate Professor Noam

Wasserman of the Harvard Business School who, in addition to utilizing the data for
his own research (more at http://founderresearch.blogspot.com), continues to
contribute greatly to our publication.
4 SUMMARY www.compstudy.com
OF
RESULTS
B KEY: 2007 2008
Demographics of Respondent Population Financing Rounds

88
• This survey of executive compensation in privately held
78 78
Technology companies was conducted between April and
June of 2008. The questionnaire resulted in 342 complete
responses with data from over 1,600 executives in a wide 55
cross section of industry sectors, geographies and stages of 43

development.
• The 2008 report provides aggregated results of the data as

well as a deeper examination of the population by a number
of perspectives, including: financing stage, founder status,
Pre-money and 1 2 3 4 5 or more
geography, headcount and company revenue. Institutional Round rounds
Financing Rounds
• Companies are divided between those that have received one
or fewer financing rounds, two or three rounds of financing, Founder/Non-
and those that have raised four or more rounds. As in previ-
191 190
ous year’s editions the detailed breakdown by financing round
shows a concentration of respondent companies at the early 153
137
stages of development, though there was a slight uptick in the 129
percentage of organizations having raised three rounds. 102
64
Founder Status 49
36
• 31% of the executive population this year were founders of 20
their company, up slightly from 28% of the population in our
CEO
President/
COO
CFO
Head of
Technology/CTO
Head of
Engineering
2007 edition.
• CTOs and CEOs were the most frequent founders of their

companies, comprised of 58% and 56% founders respectively.
In total number, the CEO is the most frequent founder.
Headcount by Number of Full Time Employees

(FTEs)
• Companies with 20 or fewer FTEs again make up more
Headcount by Number of Full-Time Employees (FTEs)
approximately one-third of the population. This year’s survey
included an increased number of mid-sized companies in the 115
41-75 FTE range, 25% of respondents, up from 20% in 2007.

86
81
60
1-20 21-40 41-75 76+

SUMMARY 5
KEY:
Non-
Founder
Founder A OF
RESULTS
Geography
111
64
47 49 48
16
California New Mid- Midwest West South

England Atlantic California
New England
Mid-Atlantic
Midwest
West
South
Founder Status
Geography
184 • California and New England dominate the population of com-
Founder panies, closely mirroring venture capital funding trends and
Non-Founder similar to our previous editions.
123
85 Business Segment
53 52 • Software companies again were the most common segment
25 29 comprising just under half of the respondents. Computer
23
3 9 Hardware, Semiconductor, Electronics companies were next
largest with 16% of the response. A CleanTech category was
Head of Sales
Head of Marketing
Head of Business
Development
Head of Human
Resources
Head of Professional
Services
added in 2008 and drew 6% of the responding population.
Company Revenue
• Survey respondents continue to lean heavily toward early
stage revenue companies with 62% of participating companies
generating less than $5 million, compared to 64% last year.
Business Segment Company Revenue

140
Software
6%
7% Communications
74
12% Computer Hardware/
Semiconductors/
Electronics 52
49% 39
Content/
37
16% Information Provider
IT Services/Consulting/
10% Systems Integration
Pre- Up to $5M $5 – 10M $10 – 20M $20M+
Revenue
CleanTech
B
2007 Unachieved Target Bonus 2008 Target Bonus
OF KEY: 2007 Actual Bonus Received
RESULTS 2007 Base Salary 2008 Base Salary
Cash Compensation – 2007 and 2008 Total Cash Compensation

29
This data compares 2008 compensation date with 102
compensation data for 2007 non-founding executives. 69
7
2007 figures are represented with both actual bonus 55 58 23
10 49 57 14
received and total unachieved target bonus for the year. 28 30 24
39
2008 bonus figures indicate at-plan target amounts.

226 236
178 183 157 165 162 170
• Average base salary across all positions increased overall at 156 163
a steady 4.7% rate from 2007 to 2008, repeating closely the

rise in 2006-2007 base salary from last year’s edition, 4.6%.
CEO
President/
COO
CFO
Head of
Technology/CTO
Head of
Engineering
• The Head of Human Resources and CFO saw the largest per-
centage increases in base salary, 7.2% and 5.2%,
respectively, year over year.
• Within prior year bonus figures, we have distinguished

between actual received and target amounts. Breaking the
bonus apart in this way demonstrates that on average execu- Executives Eligible for
tives earned approximately two-thirds of their target incentive
compensation in 2007, nearly identical to the figure from 2006.
• Overall bonus targets as a percentage of base salary did not

change materially from 2007 to 2008. There was a slight
decrease in target bonus for the Head of Sales, dropping
83% 84% 84% 84% 79%
from 63% of base salary in 2007 to 59% in 2008. 74% 70% 68% 68%
58%
CEO
President/
COO
CFO
Head of
Technology/CTO
Head of
Engineering
Bonus as a Percentage of Base Salary – 2007 and 2008
19%
13%
4%
59% 20%
9%
10% 14% 11%
43% 44% 40%
9% 10%
30% 31% 32% 34%
29% 29% 29%
24% 21% 24% 23%
18% 18% 15% 19%
14%
CEO
President/
COO
CFO
Head of
Technology/CTO
Head of
Engineering
Head of Sales
Head of Marketing
Head of Business
Development
Head of Human
Resources
Services
SUMMARY 7
A OF
RESULTS
– 2007 and 2008
30
98 31
70 18 66 13
48
30 33 45
33
11
15 28
160 167 160 166 157 165 148 156

105 113
Head of Sales
Head of Marketing
Head of Business
Development
Head of Human
Resources
Services
Bonus – 2007 and 2008 Company Age (Years)

143
114
90% 91% 90% 58

82% 85%
73% 77% 73%
68% 70%
27
0-1 2-6 6-10 10+

Head of Sales
Head of Marketing
Head of Business
Development
Head of Human
Resources
Services
Where Companies Locate Talent

13% 20% 20% 19%
25% 22% 27% 24% 22% 21%
12% Other
13% 15% 16% 14% 17%
12% 15% 19%
29% 32% 13% 14% Referred by Investor
19% 12%
16% 15% 26%
12% Referred by Other Executive
23% 63%
53% 51% 50%
36% 45% 42% 42% 38% Referred by CEO
23%
CEO
President/
COO
CFO
Head of
Technology/CTO
Head of
Engineering
Head of Sales
Head of Marketing
Head of Business
Development
Head of Human
Resources
Services
OF
RESULTS
B KEY: Median Average
Equity/Option Grants at Time of Hire Equity/Option Grants at Time

• At the average, the non-founding CEO receives a 5.40% grant 5.40
to join the company, as expected, the highest of the positions 5.00
surveyed.
• Incentive Stock Options continue to be the most common

2.58
form of equity granted in the companies surveyed, accounting
for 47% of the aggregate equity given. 58% of respondent
1.32
companies rely on stock options as the sole equity vehicle. 1.00 1.00 1.01 1.00 1.19 1.00
This figure is down significantly, however, from our 2007

report where 82% of companies utilized options.
CEO
President/
COO
CFO
Head of
Technology/CTO
Head of
Engineering
Equity Holdings
• Outside the CEO and President/COO, the non-founder Head
of Technology holds the next highest average equity percent-
age at 1.53%.
• The combined 10 positions surveyed in this report hold on Equity Holdings

average 15.68% of the company, down from 17.13% in our
5.76
2007 edition. 5.10
Severance Packages
• 64% of non-founder CEOs have a severance package, down 2.88
slightly from 67% in our previous survey. Between approxi-
mately one-quarter to one-third of the remaining 1.50 1.53 1.41
0.90 0.94 1.00 1.00
management team has a severance package.
• The average CEO severance package is 7.4 months. The CEO,

CEO
President/
COO
CFO
Head of
Technology/CTO
Head of
Engineering
President/COO and CFO each have a median severance of 6
months, while the rest of the non-founding positions sur-
veyed have a median severance of 3 months.
Severance Packages (Median

7.40 7.19
6.00 6.00 6.00

5.44
4.68 4.85
3.00 3.00
CEO
President/
COO
CFO
Head of
Technology/CTO
Head of
Engineering
SUMMARY 9
A OF
RESULTS
of Hire Median Vs. Average (%) Equity Vehicles Used
Only Incentive Stock Options

2008
Only Non-Qualified Stock Options
14%
Only Restricted Stock
7%
1%
Only Common Stock
3%
1.20 1.23 47%
1.00 0.90 0.91 1.00 Both Options
0.60
0.40 13%
0.06 0.24 Both Stock
Head of Sales
Head of Marketing
Head of Business
Development
Head of Human
Resources
Services
7%
None
8%
Stock and Options
Only Incentive Stock Options

2007
8% Only Non-Qualified Stock Options
Median Vs. Average (%) 4%
4%
Only Restricted Stock
4%
4% Only Common Stock
64%
14% Both Options
None
Stock and Options
1.00 1.21 0.90 0.92 1.00 1.05

0.75
0.10 0.27 0.30
Head of Sales
Head of Marketing
Head of Business
Development
Head of Human
Resources
Services
and Average in # of months) Executives with Severance Package

64%
4.82 41%
4.33
3.92 3.90 34% 33%
30%
3.00 3.00 3.00 3.00 3.00 2.89 27% 25% 26%
19% 17%
Head of Sales
Head of Marketing
Head of Business
Development
Head of Human
Resources
Services
CEO
President/
COO
CFO
Head of
Technology/CTO
Head of
Engineering
Head of Sales
Head of Marketing
Head of Business
Development
Head of Human
Resources
Services
10 www.compstudy.com
B
2007 Target Bonus Not Received 2008 Target Bonus
FOUNDERS KEY: 2007 Actual Bonus Received
2007 Base Salary 2008 Base Salary
Organizational Structure by Financing Round Organizational Structure by Financing

• 96% of companies surveyed from the earliest stage of financ-
ing reported a CEO, with 79% of those CEOs being founders
17%
of their companies. This is a slight increase from last year’s
37%
edition where 92% of companies in the earliest stage of
63%
financing were led by a CEO and two-thirds were founders.
27%
26% 38%
• For just 33% of those companies in the latest financing
74%
stages, the founding CEO remains in control. 79% 58% 45%
15% 55%
58%
• The CFO is the most frequent addition as a company moves 29% 32%
33% 14% 26% 38% 42%
from one or fewer rounds raised to two to three rounds. Just 26% 31%
16%
30% of companies at the earliest stage have a CFO, jumping 11% 10%
4% 8% 4% 6% 5%
to 66% at companies with 2-3 rounds raised.
1 or fewer
2-3
4 or more
1 or fewer
2-3
4 or more
1 or fewer
2-3
4 or more
1 or fewer
2-3
4 or more
1 or fewer
2-3
4 or more
Equity by Financing Round CEO President/ CFO Head of Head of
COO Technology/ Engineering
• In companies having raised one or fewer rounds the average CTO
founding CEO holds nearly one-third of the company’s fully-
Equity Holdings
diluted equity. After 2 rounds of financing, this reduces to an
22.05
average of approximately 18%.
17.00
• Founding CTOs see a dramatic effect on equity holding as 15.43
financing rounds increase, decreasing from 17.1% in compa-
nies with one or fewer rounds raised to 7.49% in those with
9.00 8.91
2-3 rounds of financing. 6.22
6.00
4.60
3.24
2.00
CEO
President/
COO
CFO
Head of
Technology/CTO
Head of
Engineering
Cash Compensa
36
27
95 88
86 20 31
108 24
56 52 49
38 42 50
190 197 180 191

154 159 156 165 154 161
CEO
President/
COO
CFO
Head of
Technology/CTO
Head of
Engineering
11
A
25th Median 75th
percentile percentile
KEY: FOUNDERS
Mean
Round (Founder and Non-Founder) Founder CEO – Equity by Financing Round

18.60 30.00 40.00
≤1
Non-
Founder
KEY: Founder
31.51
7.10 13.03 22.00
2-3
78%
49% 35% 18.13
35% 38% 49%
5.40 10.00 16.00
23%
15% 15%
14% 10% 17% 16% 8% 15% 21% 4+
3% 1%
9% 8% 2% 4% 10% 5% 4% 7% 1% 1% 1% 4%
15.63
1 or fewer
2-3
4 or more
1 or fewer
2-3
4 or more
1 or fewer
2-3
4 or more
1 or fewer
2-3
4 or more
1 or fewer
2-3
4 or more
Head of Head of Head of Head of Head of

Sales Marketing Business Human Professional
Development Resources Services
– Founders Founder President/COO – Equity by Financing Round

9.00 18.00 33.00
KEY: Median Average ≤1

24.18
2.50 6.00 22.00
7.45 7.19 7.23
6.31 6.20
4.00 2-3
3.00 2.50 2.20
0.30 11.21
3.00 4.55 8.00
Head of Sales
Head of Marketing
Head of Business
Development
Head of Human
Resources
Services
4+
5.94
tion – Founders
Founder Head of Technology/CTO – Equity by Financing Round
47
8.25 15.00 22.32
≤1
43
11
83 77 12
54 50 60
43 43 64
17.10
10
2.00 5.00 10.00
166 170 150 159 155 166 148 160
107 112 2-3
7.49
Head of Sales
Head of Marketing
Head of Business
Development
Head of Human
Resources
Services
2.00 3.00 6.00
4+
4.00
INTERVIEWS B
CLINTON W. BYBEE Aaron: How about starting with you walking me through your
life before venture capital. What was your career before you
Co-founder and Managing Director got into the venture industry?
ARCH VENTURE PARTNERS Clint: I was an engineer. I studied engineering at Texas A&M
Clinton Bybee is a co-founder and Managing Director of ARCH and went to work as a production engineer with Amoco, which
Venture Partners. Mr. Bybee concentrates primarily on advanced is now part of BP. I worked in the Permian Basin. Those were
materials, electronics, semiconductors, photonics, and infrastruc- tough times in the oil business — rapidly declining oil prices,
ture businesses. lay-offs, tough economic times. The good news for me was that
Mr. Bybee has helped organize and finance numerous companies with all the lay-offs, I suddenly found myself with a huge
including MicroOptical Devices (acquired by EMCORE), Cambrios amount of responsibility. Even when you cut half of the engi-
Technologies, Aveso, Innovalight, Intelligent Reasoning Systems neers, you still have lots of operating challenges, and I received
(acquired by Photon Dynamics), Semprius, Nanosys, and Xtera an exponential increase in responsibility. I left Amoco about
Communications. three and a half years later. The lay-offs were regular and I had
an opportunity to take a voluntary severance package that I
He is a board member of Impinj, Innovalight, Cambrios planned so I could head off for business school while still get-
Technologies, Xtera Communications, Nitronex and Aveso. Mr. ting paid.
Bybee is an organizing member of the Texas Venture Capital
Association and currently serves as its first President.
Aaron: Not a bad deal.
Previously, Mr. Bybee worked with ARCH Development
Clint: Not at all! I went to the University of Chicago and when I
Corporation. He also managed a venture investment fund for the
arrived, there was a new group that had been formed about a
State of Illinois and was a production engineer with Amoco
year earlier called ARCH Development Corporation. It was
Corporation. Mr. Bybee holds an M.B.A. from the University of
formed by the Trustees of the University with a mission to com-
Chicago and a B.S. in Engineering from Texas A&M University.
mercialize technologies emanating from the University of
Chicago and the Argonne National Laboratory, which the
University operates for the Department of Energy.
Aaron: How was that different from a technology transfer

office?
Clint: It was set up differently. It was set up as a private compa-

ny. ARCH Development Corp. was a not-for-profit, 501(c)3
company whose sole member was the University of Chicago.
The trustees set it up that way because they wanted to be able
to put the proper incentives in place and knew under a tradi-
tional academic structure it would be difficult to hire a real
business person who could have some skin in the game. That
was the innovative piece of ARCH Development Corp. It was set
up with a high level mission to commercialize technology and
included an incentive to start companies as the preferred
means of commercialization.
13
CLINTON BYBEE, CO-FOUNDER AND MANAGING DIRECTOR, ARCH VENTURE PARTNERS
Aaron: Who did the University recruit to build the business? Aaron: So it was hard to find funding?
Clint: They brought in Steve Lazarus who had been a senior Clint: Impossible. There was interest from some West Coast
executive at Baxter Laboratories. He was one of the key people firms but Chicago was a long way away, it’s cold in the winter,
involved in the American Hospital Supply-Baxter combination. and that didn’t appeal to them. We concluded that if we were
Following the merger, Steve chose to retire from Baxter, and going to turn the corner on this experiment, we had to have
was recruited to be the initial CEO of ARCH Development Corp. some seed investment capability, so we set out to raise a fund.
It took over a year to raise the first fund, which was $9 million
Aaron: How did you get involved with ARCH Developmemt dollars, in 1989. It’s undoubtedly the hardest money that ARCH
Corp. as a student? ever raised.
Clint: One of the things Steve wanted to do was to teach. So he

Aaron: Was this still under the auspices of ARCH Development
convinced the University to put ARCH Development Corp. in the
Corp.?
business school and the University gave Steve an appointment
as an Associate Dean of the Graduate School of Business. Clint: Yes. ARCH Development Corp., a 501(c)3 not-for-profit,
When I got on the ground there in 1988 to attend business was the general partner of ARCH Fund I. It was an odd struc-
school, Bob Nelsen and Keith Crandell, who are now my part- ture. Steve Lazarus really raised the first fund - he brought
ners, were working at ARCH Development Corp. as volunteers. immense credibility from his executive roles at Baxter and as
I joined them as a volunteer, seeing this as a great way to take Deputy Assistant Secretary of Commerce prior to that. We did
my interest in science and technology and apply it to business. I 12 companies with that first fund.
got started by spending around 20 hours a week at Argonne
National Lab, which is about 45 minutes from the University. Aaron: Wow. Twelve companies off of $9 million dollars?
Clint: We learned to syndicate. We made mistakes and learned

Aaron: So the idea was to find technology that could be spun
some important lessons about funding to milestones. We ulti-
out of Argonne into businesses?
mately wrote four of those first companies off, took four public,
Clint: Exactly. and four were acquired.
Aaron: Where did the funding come from? Aaron: What was your industry focus?
Clint: Well, that led to the next problem. ARCH Development Clint: It was essentially the mirror image of the focus at the
Corp. was not set up to be a venture capital firm; we were set University of Chicago and Argonne National Laboratory, which
up to start companies. So in many cases we were running the is life sciences, physical sciences, and information sciences,
companies ourselves until we could get enough momentum and areas where those disciplines converge.
where we could recruit professional managers. By the late ‘80s
we had some companies going that needed real funding. There Aaron: When did you make the break from the 501(c)3?
were some good venture funds in Chicago at the time, but when
Clint: That was after fund one, which was in the 1992 time
we would show up to talk to them about our companies, the
frame. We had fully invested in fund one by 1992 and by this
idea of backing a raw startup with an incomplete or non-exis-
time we found ourselves in the venture capital business. We
tent management team and technology that was not fully
saw enough opportunity to organize a second fund, and as we
developed yet into a product was essentially a foreign notion to
set out to raise a new fund the Trustees of the University
those guys.
encouraged us to spin out. So we formed ARCH Venture
Partners with the University’s blessing as a separate, private
group, and we began to spread out geographically. It began with
the Vice Provost of Columbia University inviting us to put an
office there. He had followed our work at Chicago. This sparked
the idea to pursue a national strategy.
INTERVIEWS B
AARON D. LAPAT Aaron: How did you execute this? Did you send a partner to
New York?
Managing Director
Clint: We had someone who joined us for a while in New York,
J. ROBERT SCOTT but we learned a lesson that other venture funds have learned.
Aaron has been with J. Robert Scott since 1993 and built the firm’s It’s hard to weld somebody on in a remote geography. It did not
high tech practice. He leads senior level search assignments across ultimately work out effectively. Instead we tried the other
a range of industry segments, including Software, Communications, approach, which was to move people from the core out to
Semiconductors/ Microelectronics, Specialty Materials and remote geographies. Bob Nelsen moved to Seattle; he is from
CleanTech. His practice emphasizes recruiting CEOs and functional that part of the country and was interested in being out west.
leaders for growth-oriented and venture-backed companies. We saw an opportunity to have a presence near the University
Additionally, Aaron oversees the creation of the annual of Washington and that has been very productive for us. Since I
Compensation and Entrepreneurship Report in Information Technology was the only guy in the group who had been to the southwest-
at www.compstudy.com. ern part of the United States, I went to Albuquerque in 1994.
Prior to joining J. Robert Scott, Aaron spent four years with a

Aaron: Talk about finding a place off the beaten trail to do
retainer-based executive search firm that serviced the high tech-
venture investing.
nology industry.
Clint: I was the only venture capitalist in the whole state.
Aaron holds a B.A. in Anthropology as well as an M.B.A. from
Actually, I think I was the only venture capitalist most people
Boston University. He serves on the Board of Advisors of Stax, Inc.,
had ever heard of. Within a year after I got on the ground we
a privately-held consulting and market research firm. Aaron and
helped start a company out of Sandia National Laboratories
his wife Lauren have two children, Sophie and Sammy. In his spare
called MicroOptical Devices. I spent almost a year working
time, Aaron plays tennis, runs and listens to music. On the off
nearly full time with the two scientific founders to get it started.
days, he can be found stoking the embers of his VW-sized Texas
It turned out to be a nice success as it was acquired by a public
BBQ, mixing up a homemade hot sauce, or trying to create the
company called Emcore. The acquisition was the catalyst for
perfect play-list from his ever-expanding record (mp3) collection.
Emcore’s transition out of equipment and into devices and com-
ponents. It is now the center of gravity of Emcore.
Aaron: When did you come to Texas?
Clint: I came here in 2000. We continued to get bigger. Our sec-

ond fund was $31 million, our next fund was $107 million and
the one after that was $180 million. As we scaled, it became
less viable for Partners like me to spend nine months working
on one company full time. At that time, Albuquerque was a dif-
ficult place to scale an operation. I knew Austin well and had a
couple of companies here. So we concluded it was either Austin
or California, and our collective judgment was that California
was ripe with a lot of smart venture capitalists, so we came to
Austin instead.
15
Aaron: What is it in the culture of the firm and your Aaron: So, you have invested in the renewable technologies
investment philosophy that has kept the partnership an sector as an offshoot of your focus in advanced materials?
enduring one?
Clint: Right. For example, we co-founded a company called
Clint: That’s a great question because as you know, we now Innovalight in 2003 around fundamental innovations in silicon
operate with offices in Chicago, Austin, Seattle, and San nanoparticles developed at the University of Texas. The compa-
Francisco, which presents challenges. I think it works well for a ny is now based in Sunnyvale and is a very promising thin film
couple of reasons. The first is that Bob, Keith, Steve, and I have solar company using its silicon nanoparticles in an ink as a key
worked together from the beginning and we have seen the ingredient. Another example is a company called Nanophase
good, the bad, and the ugly together, which helps to build a Technologies, which my partner Keith Crandell founded back in
pretty close bond. 1990, long before nanotech was cool. Nanophase Technologies
was formed to exploit the commercial applications of nanoma-
Aaron: How many partners are there now? terials developed at Argonne National Lab. Cleantech gets
lumped into our physical sciences activity because the innova-
Clint: Five. There are the original three, as Steve is now an
tions tend to be physical sciences related (materials,
emeritus partner, plus two others. Steve Gillis joined us about
chemicals, electrochemical, etc.). We also find that where phys-
three years ago as a Venture Partner and he is now a Partner
ical sciences and life sciences converge is a fertile territory for
focused on biotechnology companies; and then Scott Minnick,
new companies. Sapphire Energy is a portfolio company that is
who is also a biotech guy based in San Francisco. Both Steve
making gasoline from algae, and represents a convergence of
and Scott have a significant amount of operating experience
physical science and biological sciences.
and entrepreneurial success. The venture partner model has
been very good for us because it has allowed both sides to try
Aaron: Let’s move the discussion toward executive leadership
before we buy.
in your portfolio companies. What makes a great CEO for an
emerging business?
Aaron: Is it difficult for operating executives to make the
transition to venture? Clint: I don’t know that there is one answer. Two very good
models that work are (1) “done it before” or (2) you “know the
Clint: It can be. I think the really early stage stuff is probably an
industry cold.”
easier transition on operating guys because the companies
generally need them to be involved in more things. At some
Aaron: If forced to choose between entrepreneurial
point, however, people need to make the decision as to whether
athleticism and deep domain expertise, which do you take?
they want to be driving the car or sitting in the backseat. That is
the decision you have to make in going from the operating Clint: I have seen examples of both, and “done it before” entre-
world to venture. preneurial athleticism is probably going to outcompete deep
domain expertise nearly every time. For example, we recruited
Aaron: How has the investment focus of the firm evolved over a CEO to a company here in Austin, which he built and sold to a
time? public company and then we recruited him into a telecom com-
pany, yet he had no telecom experience at all. He has done a
Clint: We remain focused on three sectors, Life Sciences,
great job because he’s a hard charging entrepreneurial operat-
Physical Sciences, and IT. IT for us tends to cut across opportu-
ing guy and was able to compliment himself on the telecom
nities in life sciences and physical sciences. Most of our
side with team members from the industry. The best CEOs are
physical science companies involve materials innovations that
the ones that know what they’re good at and what they’re not
lead to semiconductor innovations or innovations in opto-elec-
and work hard to get A+ people around them to fill in the gaps.
tronics, photonics, energy, and communications. While the term
cleantech makes us a bit uncomfortable because of the buzz
and hype surrounding it, we have been involved in solar and
other renewable technologies for some time.
INTERVIEWS B
Aaron: How do you manage the transition from one CEO to a
new leader?
Clint: These can be very uncomfortable conversations to have if

you don’t have a CEO that’s mature, and self-aware as to his or
her own abilities. It is not uncommon for us to put incentives in
place that reward the CEO for finding his replacement.
Aaron: I suppose standard vesting schedules on options can

be something of a disincentive for a CEO to move on.
Clint: Yes. This is an area where I’ve been spending a fair

amount of time over the last year. By and large, most incentive
plans are inadequate. Time vested options are a pretty blunt
tool that do not correlate all that well to the performance that
drives shareholder value. The incentive is the longer you stick
around, the more you vest.
Aaron: Instead, have you been tying vesting to performance

objectives?
Clint: Yes. The accounting profession did us a bit of a favor in

that regard in that they now for all practical purposes make you
account for all options using variable accounting treatment, so
there is no longer a disincentive to using milestone vesting as
opposed to time based vesting or in addition to time vesting.
I’m on the board and compensation committee of three compa-
nies where we have recently put together equity incentive plans
that are heavily weighted to milestone vesting and the mile-
stones have a very clear correlation to shareholder value, like
revenue, gross margin, profitability, and market share. It is
hard to do this in an early stage company, but it gets easier as
a business matures and begins to ramp sales.
Aaron: Because in the early stages, objectives are fluid?
Clint: They are very fluid. Sometimes technical milestones take

longer, often times sales milestones take longer.
Aaron: So does that mean milestone based vesting just

doesn’t work at the early stages?
Clint: I don’t know. That’s a good question. They are a lot hard-
er. In the earliest stages of a company I would probably lean
toward a blunt instrument. As the company matures, it is perti-
nent to begin to apply sharper and sharper instruments by
tying vesting to hitting milestones that are directly correlated
with building shareholder value. I have seen one ancillary ben-
17
efit in that it provides CEOs a tool around which to drive and Chinese nationals getting educated in the best schools in the
motivate everybody in the organization. For example, one of our West, doing post docs over here and in Europe, working at
CEOs wanted every single employee tied to this plan and he places like Bell Labs and other great research institutions in
posted the milestones on the wall so everybody knew the focus. the West and then returning to China to run research labs with
As companies mature, you need to instill more discipline and better funding than they would be able to get in the U.S.
focus. You almost have to create a religion around your mission
This is a major change. There remain plenty of great things to
and milestones. The creative people that got the company from
work on by focusing on what we do here in America. I think
start-up to a point of greater maturity sometimes have a hard
over time, however, that is going to change and we are begin-
time with this and the milestone based vesting sure helps to
ning to put relationships in place to begin taking advantage of
transition to a culture of execution.
innovations that happen not just here, but internationally as
well. If you kick it up a level and think about the venture indus-
Aaron: What do you look for when you’re building Boards for try in general, back in the early days of the business you could
your companies? think about building a business largely in the U.S. market. Only
Clint: We spend an increasing amount of time trying to build after getting to a significant size or reduction in risk could one
Boards with highly experienced operating executives. Some of imagine building an international operation. This old model has
the most valuable insights for our companies come from the changed where now you really have to do things on a global
operating people on the Board. At one of our companies, basis very very early. Now there are often market opportunities
Cambrios Technologies, we recruited Dan Maydan to the Board. that are uniquely Chinese, or uniquely Indian. So I see the busi-
Dan was the former President of Applied Materials. Then we ness becoming increasingly more global. I think it has to.
recruited Gene Benucci to the Board. Gene was the Founder
and currently Chairman of ATMI, a leading semiconductor
materials company. This company is doing electronic materials
for touch screens and displays and having two deeply experi-
enced operating people from that sector has made a huge
impact.
Aaron: Do you use the role of Executive Chairman?
Clint: We do, but mostly in troubled companies or as an interim

step. We have a guy that’s worked with us in a couple of compa-
nies as Executive Chairman and he’s a delight to work with
because he can come in to a company and quickly assess what
needs to get done. He’s then very good at assuming an interim
operating role and can drive a team hard to transition to the
direction that they need to go. He then is good at recruiting a
full-time CEO as his replacement.
Aaron: Venture Capital used to be a local business. That’s not

your model. You guys have proven an ability to do it on a
national scale. Do you now see the industry globalizing?
Clint: Sure. We try to follow the great scientific innovations and

their innovators, and unfortunately they don’t all exist in the
United States. There are some great academic research univer-
sities in Europe. There are an increasing number of good
scientific innovators in China. There, the pattern involves
INTERVIEWS B
CARLOS A. RIVA Aaron: Why don’t we begin with your career history?
President and Chief Executive Officer Carlos: I began my career as a civil engineer. I went to MIT as
an undergrad and to Stanford for a graduate degree in engi-
VERENIUM neering. My first job after school was with an architect
Carlos Riva became President, Chief Executive Officer and Director engineering firm called Gilbert/Commonwealth. They were
of Verenium in June 2007, after the merger of Diversa Corporation once one of the top architect engineers in the country specializ-
and Celunol Corporation closed. Mr. Riva joined Celunol, a private- ing in building nuclear power plants.
ly held developer of cellulosic ethanol process technology, as
Chairman and Chief Executive Officer in 2006. Aaron: What did you do for the construction firm?
Prior to joining Celunol, from 2003 to 2005, Mr. Riva served as Carlos: I was working on design of power projects and other civil
Executive Director of Amec plc, a major global construction and engineering projects. The company wasn’t solely in the nuclear
engineering company based in the United Kingdom, where he was business, but that was one of their major areas. During my second
responsible for the company’s operations in the United States and year there, the accident at Three Mile Island happened. The firm
Britain and for Amec’s global oil and gas business strategy. From was located in Pennsylvania, about 100 miles from Three Mile
1995 to 2003, Mr. Riva served as Chief Executive Officer of Island, and I remember everyone at the firm being excited because
InterGen, a Boston-based joint venture between Shell and Bechtel they thought the incident would lead to a lot of work. I remember
that developed more than 18,000 megawatts of electric generating telling one of my colleagues that he was out of his mind. I viewed
capacity, along with gas storage and pipelines, on six continents. that incident as the twilight of the nuclear industry for a long
Under his leadership, InterGen raised $9 billion of non-recourse while, so I decided to go back to school to get an MBA and went to
project financing to construct power projects and grew from a Harvard. When I graduated from business school, the last thing I
development company concept to a successful, global operating wanted to do was to go back into the electric power business. I
business. From 1992 to 1994 Mr. Riva was President and Chief have always loved energy and wanted international experience, so
Operating Officer of Boston-based J. Makowski Company, which I joined a company called Oceaneering International, a publicly
developed the first independent power project in the United States. listed company in the oil field services sector. They were the lead-
Mr. Riva earned a S.B. and M.S. degrees in Civil Engineering from ing technology provider for underwater services to the offshore oil
the M.I.T. and Stanford University respectively, and an M.B.A. from and gas industry. I was in with Oceaneering in the UK and did work
the Harvard Business School. all around the North Sea, West Africa, the Middle East, and Asia. I
was later offered the job of running their West Coast US opera-
tions. This was principally focused on the offshore California and
Alaska markets, and my wife and I decided to move to Anchorage.
This was 1985 and oil prices started to fall precipitously, prompt-
ing the oil companies to curtail their frontier exploration, and thus
evaporating our market.
Aaron: The market collapsed while you and your wife were in
the wilderness of Alaska?
Carlos: We were not exactly in the wilderness of Alaska, but we

loved it. We contemplated staying but concluded it was too far
away so we came back to Boston, which was our home. I joined
up with a local entrepreneur by the name of Jacek Makowski,
who is one of the real legends of the energy industry. He had
been the developer of the LNG terminal in Everett, MA built by
Cabot Corp. and had been the genius behind a number of other
highly innovative projects in the energy industry.
19
CARLOS A. RIVA, PRESIDENT & CEO, VERENIUM
Aaron: What did you do with Makowski? that point, I was looking to get back to the US and back into ener-
gy with a development focus. I have always been interested in
Carlos: Jacek had put together an electric power project using
renewables, particularly cellulosic ethanol, and I became aware
Canadian natural gas, which had never been imported in such
of Celunol, which was the predecessor of Verenium, and which
large quantities here before for electric power generation. He
had recently been recapitalized by a group of venture backers.
established a partnership with a number of local utilities and a
Canadian gas pipeline company. He was looking for a project
manager and brought me in to run the project. It was a signifi- Aaron: What was it that compelled you to Celunol?
cant deal. We developed a 500 megawatt project on the Carlos: What appealed to me most was that this company had a
Massachusetts / Rhode Island border which turned out to be distinct technological advantage. The company was one of the
the first IPP built in the US. On the basis of that project, we front runners of the industry from a technology development
built up a company and developed a number of other large gen- perspective, but had decided to become more than just a tech-
eration projects in the Northeast. nology provider. We wanted to become further integrated and
become developers, owners, and operators of production facili-
Aaron: What ultimately became of that business? ties using our technology to leverage us into that position.
Carlos: I had become President of the business and nine years

after joining, we sold the business to Bechtel and Pacific Gas Aaron: This plays to your development experience, but you
and Electric. The new owners then asked me to start a parallel have never run a technology company.
business focused on developing power projects overseas, so I Carlos: The Company wasn’t looking for a CEO who was a great
put together a group in 1995. The new company was called scientist, organic chemist, or microbiologist. They were looking
InterGen. We had some significant early successes. We devel- for someone that could take the business and the science,
oped and closed the financing on a 700 megawatt project in commercialize it, and develop it into projects.
Great Britain, a 700 megawatt project in Mexico (which was the
first IPP in Mexico) and then a 480 megawatt coal fired project in Aaron: How old was the business at this point?
the Philippines, all within the first 18 months. Those projects
gave us the anchor to set up development companies for those Carlos: The business had been started in the early ‘90s and had
three regions: Europe, Asia, and Latin America, and we contin- gone through a number of evolutionary steps. They tried a cou-
ued on at a pretty aggressive pace. Over eight years, from ple of times to build commercial scale units, but when oil
1995-2003, we developed on the order of 15,000 megawatts of prices went back down into the teens there just wasn’t a viable
new projects in a dozen countries. We were planning for an IPO business model. Throughout that time, though, they were mov-
in 2001; then 9/11 and the Enron meltdown happened, combined ing the ball forward with their science and technology.
with the unraveling of power markets, here in the US, all mak-
ing an IPO impossible for a company like ours. So I was asked Aaron: What was the state of the business when you joined?
by the owners to change the nature of the company from being a
Carlos: The science was well ahead of most of the other com-
developer to becoming an operator. We dismantled the develop-
petitors in the sector. It still needed a lot of work and still does,
ment apparatus and turned the business into a global utility. I
but it was at a stage that I thought was distinctive and could be
decided that running an operating utility business wasn’t where
driven forward. We had microorganisms that had been geneti-
my interests lay and was lured away by a large British engineer-
cally modified to ferment the different component sugars of
ing contractor called Amec to run a large portion of their
biomass into ethanol. We also had a pilot plant in Louisiana
business with a view towards growing the company significantly.
that was partially operational. So, we needed to finish building
out the pilot plant and continue the scaling and technology
Aaron: How did you get connected to Celunol/Verenium? development efforts.
Carlos: I spent three terrific years in the UK, but much of the
business Amec hired me to run was not a growth priority and at
INTERVIEWS B
Aaron: How was the business funded?
Carlos: There was venture capital funding that came in about a

year before I joined from Charles River Ventures, Braemar, Rho
Capital, and Khosla Ventures. I think finding a CEO was a chal-
lenging process for them because this is such a new industry
so it is difficult to pluck someone out of a company with deep
exposure to this space. You have to take a bit of a leap of faith
on adjacent skills.
Aaron: You know the energy industry and are a deal guy.
Carlos: That’s right. I wasn’t a science guy, but I had a techni-

cal education, so I am not uncomfortable with science and
technology. I also had experience building companies. Soon
after joining, I knew we would need to get more funding. My
CFO is a brilliant finance and deal guy; not from energy, but
from life sciences and biotech. He and I were exploring various
options and began looking at Diversa. They were a public com-
pany based in California that had a lot of interest in biofuels
and were specialists in enzyme technology, which is another
one of the components that is essential to our production
process. They had great technology, but felt it was not being
fully valued and decided to integrate vertically. Both companies
were aware of each other’s strengths and technology, and as
our discussions progressed, it became clear that a merger
would accelerate each of our respective efforts to commercially
produce cellulosic ethanol. Technically, Diversa issued shares
and acquired 100% of what was then Celunol, but the Celunol
management team was effectively invited to manage the com-
bined company.
Aaron: What time frame was this?
Carlos: This was about a year ago. The combination of the com-
panies was important as it provided funding to advance our
cellulosic ethanol technology development. It also made us a
public company. Shortly after we announced the merger we
raised an additional $120 million through a convertible debt
offering. We also did a subsequent convertible debt round
which raised a further $50 million early this year.
21
Aaron: How has the integration with Diversa gone? there for us if we were private, and in the long run, this busi-
ness is going to be about raising capital, and the cost of capital
Carlos: Extremely well. We had about four months between
is going to be a critical dimension to competing in this busi-
announcing the deal and getting SEC approval to work out a
ness. There is also need for more transparency, not only to the
very detailed plan for integration. It was a little strange because
outside world but also internally. I spend much more of my
Celunol management wasn’t part of Diversa during that four
time than I would have imagined communicating, speaking to
month period, so we had no real management responsibility,
media, investors, and not only our equity and institutional
but everyone was very cooperative and we were able to inte-
investors, but also our debt holders, whereas in a private com-
grate the businesses very smoothly upon closing. The R&D
pany, these demands are less. But being public has been
operations of the two organizations were merged and moved to
important for the company, and the communication and trans-
San Diego, which is where Diversa was headquartered.
parency makes for a healthy management environment. There
Cambridge was where we had our project development and
are a lot of challenges obviously. You need to be prepared to
engineering groups, and we decided to locate our corporate
defend the positions that you take.
offices here as well. Our production facilities in Louisiana
rounded out the organization. All in all, the merger has been a
success in providing a very strong enzyme business as well as Aaron: Are there consolidation opportunities in the industry
the strong scientific talent base that we were looking for to yet?
support the growth of our biofuels technology. Carlos: I think it is still early in the cycle, although obviously
the Diversa and Celunol merger was a consolidation, but there
Aaron: Does owning the enzyme business give you a has not yet been a lot of activity. There is some consolidation
meaningful competitive advantage? going on in the first generation biofuels companies, which is
driven by the need to find better operating efficiencies. Our part
Carlos: It does, because enzymes are one of the important
of the industry is not yet in an operating mode. It is still very
ingredients in cellulosic ethanol production. It is also a com-
much about future promise, and while there might be some
pelling commercial business on its own that has been growing
opportunities for companies to combine to get new technology,
rapidly. It is still small, but we had $26 million in product sales
I don’t know that we’re yet at the stage where the advanced
last year. The year before it was $16 million, and this year we
biofuels industry needs to consolidate.
have given guidance that we’ll be just shy of $40 million, so it’s
a pretty rapid ramp up. This was quite a change because tradi-
tionally most of Diversa’s revenues came from contract Aaron: How has team building differed at Verenium compared
research, yet there was very little opportunity to get operating with your previous companies?
leverage from contract research. So what they really wanted to Carlos: It is a different industry, but a lot of the challenges
do was become more of a product driven company. We were remain the same. Two years ago, Celunol was a handful of peo-
able to facilitate that transition, and it is going quite well. ple. Today we are close to 300 people, so we have grown very
rapidly. Again there is no established cellulosic ethanol industry
Aaron: How has being public changed the business? to speak of, so we drawn talent from adjacent industries in
biotech, chemicals, power, and other places. This means peo-
Carlos: For starters, the company has changed by virtue of
ple have different norms. They have been working in
growing very rapidly. I do think about that question a lot, partic-
businesses in very different contexts, so part of my job as CEO
ularly when I see that some of our private competitors are able
is to forge the group into a cohesive operating team. Over the
to be rather bold in statements to the market. We have to be
course of the last year, the integration of the two companies
very careful about what we say publicly, so we tend to be more
has been a unifying team effort.
cautious and guarded. By the same token, I think that being
public gives us access to sources of capital that would not be
INTERVIEWS B
Aaron: Typically building a company involves establishing a
new culture. Certainly companies have their own identity and
culture. My experience is that industries also tend to have a
culture. With Verenium drawing on talent from a range of
industries, has this created something of a cultural melting
pot?
Carlos: That’s exactly right. In fact, I think the challenge is

interesting to consider. If cellulosic ethanol has a characteristic
as an industry, I would say that it tends to be currently domi-
nated by life science and other science intensive industries
where matters such as worrying about intellectual property and
secrecy tend to dominate. I feel we have to move as an industry
out of that mold and start worrying about our supply chains,
relationships with other companies, transparency to the finan-
cial community, government relations – all these other issues
that more evolved industries have dealt with. I am trying to fos-
ter a corporate culture around confidence in our capabilities to
execute, rather than feeling that we can be perfectly protected
by our patents.
Aaron: How do you recruit people who fit that profile?
Carlos: I try not to hire people for today’s company, but to proj-
ect out three to five years, when we could have 1,000 people
and six different cellulosic ethanol plants. For instance, we
were able to hire a woman to run our specialty enzyme busi-
ness who was a very senior executive at BP Chemicals, which
was bought out by a private equity group. She has run billion
dollar businesses. The question is, how can we attract that kind
of talent into what is still a small company? I think one of the
things that has benefited us is that this industry has enormous
appeal. It has psychological appeal in the sense that there is
potentially a disruptive technology to solve one of the great
problems of our current age and economy, which is the over-
reliance on fossil fuels. There are also benefits in the sense of
job satisfaction because we are tackling pressing environmen-
tal and energy security issues. These attributes help us attract
talent that I think would be otherwise unavailable, and that
makes a significant difference.
Aaron: How has the tumult in the public capital markets

affected you?
Carlos: One of our challenges is that we are really the only

public cellulosic ethanol company. There are other companies
developing this technology as part of a larger business, but
23
we’re the only cellulosic ethanol pure play, and I think what
tends to happen to us is we get lumped in with the all the other
biofuels companies. Even though our financial risk profile is
vastly different from a grain ethanol or bio-diesel companies,
we still get compared to them, so we tend to be subject to the
rising and falling tides of those industries.
Aaron: Another issue I see when recruiting in the cleantech

sector is that many of the target markets for talent, like the
chemical or energy industries, are comprised mostly of larger
companies that are not historically entrepreneurial. How do
you overcome this?
Carlos: Our task is to find the entrepreneurial people in the

large companies. These types can be found, and when you do,
you can unleash that capability and get a lot of leverage.
Fortunately, there are a lot of smaller entrepreneurial busi-
nesses springing up in these industries, and they are also are a
rich source of talent for us.
Aaron: Where would you like to see the business five years
from now?
Carlos: From a technology and commercialization standpoint, I

want us to be leaders of the pack in the cellulosic world. I
expect that five years from now, we will have operating facilities
in the Southeast with various facilities under construction. We
will license our technology and technology packages more
broadly and likely will be looking to logical places to expand
internationally. Given that we’ve done a lot of work on sugar
cane and energy cane as a feedstock in the Southeast, we
would probably look south to the Caribbean or Brazil as logical
areas for expansion. I see our enzyme business also continuing
to grow, and I’m very bullish on its potential. Our industry is not
going to replace oil, but it can take a big chunk out of future
demand for fossil hydrocarbons. Verenium is right at the verge
of being able to start to construct commercial facilities. This
puts us at the forefront of the advanced biofuels industry, so I
want to keep pushing that leadership position and trying to stay
ahead of the pack. I believe that once you solidify a leadership
position, one can have a sustainable competitive advantage that
will allow the company to continue to grow and prosper. This is
an industry that in the United States alone, by virtue of the
mandate of the last energy bill, will grow to 16 billion gallons a
year. At $3.00 a gallon, that’s a $48 billion dollars per year
market that nobody owns today. So it’s a race.
24 CHIEF www.compstudy.com
B
25th 75th
percentile Median percentile
EXECUTIVE KEY:
OFFICER Mean
Base Salary – 2007 and 2008 Base Salary – 2007 and 2008
• CEO base salary increased 4.2% at the average, from $200 $225 $250
$227,000 in 2007 to $237,000 in 2008.
2007
Bonus – 2007 and 2008
• The average CEO has a target bonus of $102,000 for 2008,
$227
which represents 43% of base salary. This compares to an
$205 $235 $260
average bonus received in 2007 of $69,000 on a total target
bonus of $98,000, an achievement of 71%.
2008
Equity Holdings
• In 2008, current equity held by the CEO ranges from 3.90% at $237
the 25th percentile to 6.50% at the 75th percentile. The aver-
age equity holding for the CEO is 5.46%.
• The average time of hire equity grant for the CEO is 5.40%
while the median time of hire grant is 5.00%.
Base Salary by Financing Rounds
Base, Bonus and Equity by Financing Rounds
$155 $250 $275
≤1
• Average base salary remains relatively constant through
rounds of financing for the CEO. In general, with additional
rounds raised, the range of base salary for the CEO becomes $235
tighter. This same trend holds true for CEO bonus.
$200 $225 $250
• Average equity position held by the CEO drops steadily with
2-3
an increase in financing rounds. For those companies with
one or fewer rounds raised, the non-founder CEO holds an $236
$220 $240 $265
average of 6.28% of the company, compared to 4.86% at
companies having raised four or more rounds. 4+
$238
Base, Bonus and Equity by Founder Status
• Non-founder total, actual and target, cash compensation is
considerably higher than that of the founding CEO, an average
of $339,000 for non-founders in 2008 compared to $286,000
for founding CEOs, a 19% premium for non-founders.
Base Salary by Founder Status
• Founding CEOs hold an average of 22.05% of their company, $205 $235 $260
as expected a significantly higher amount than non-founders
who had an average of 5.46%.
Non-Founder
$237
$162 $195 $229
Founder
$197
25
25th 75th 25th 75th
percentile Median percentile percentile Median percentile
Actual Bonus Received
KEY: Target Bonus KEY:
Mean Mean
Bonus – 2007 and 2008 Equity Holdings

$65 $98 $100 $125 3.60% 5.00% 7.00%
2007 Time of Hire
$20 $62 $69 $100 5.40%

$65 $100 $125 3.90% 5.00% 6.50%
2008 Current
$102 5.46%
Bonus by Financing Rounds Equity by Financing Rounds

$16 $100 $150 3.00% 7.00% 10.00%
≤1 ≤1
$113 6.28%
$65 $100 $125 4.69% 5.64% 6.50%
2-3 2-3
$103 5.88%
$75 $100 $125 3.60% 4.90% 6.00%
4+ 4+
$101 4.86%
Bonus by Founder Status Equity by Founder Status

$65 $100 $125 3.90% 5.00% 6.50%
Non-Founder Non-Founder
$102 5.46%
$30 $60 $100 8.30% 17.00% 30.00%
Founder Founder
$88 22.05%
EXECUTIVE
OFFICER
B KEY: Salary Bonus
Cash and Equity Compensation by Headcount Cash Compensation by Headcount (FTEs)

• With increasing headcount, the total target cash compensa- $390
tion for the CEO rises. Total cash ranges from an average of $347
$319 $115
$280,000 in companies with 1-20 FTEs to $390,000 at the
$280 $106
largest companies surveyed, those with greater than 75 FTEs. $99
$77
• Equity holdings for the CEO follow an inverse trend as com-
pany headcount grows. Non-founder CEOs in the smallest $275
$241
companies hold 5.88% while those in companies with greater $203 $220
than 75 FTEs see equity holdings reduced to 4.99%.
Cash and Equity Compensation by Geography 1-20 21-40 41-75 76+
• Base salary across the geographies shows little variance out-

side the West region, where base salary is 9% lower than the
average across the regions.
• Target bonuses in California and the Mid-Atlantic are the

lowest among the regions. However, base salary in California Cash Compensation by Geography
is highest at an average of $247,000.
$358 $351
$345 $343
$327 $322
Cash and Equity Compensation by Business $98 $107 $121 $106
$90
Segment $107
• CEOs at Content/Information companies earn the highest

total cash package in our report with a total base and target
bonus of $364,000. Additionally, equity holdings in this seg- $247 $236 $237 $237 $245
$215
ment are also highest for the CEO at 7.10%.
• Equity holdings among CEOs in the Communications sector

are lowest at just under 3.82% at the average. California New Mid- Midwest West South
England Atlantic
Cash and Equity Compensation by Revenue

• Average total cash compensation for the CEO correlates
directly with rising company revenues. In the pre-revenue
segment, the non-founder CEO earns an average total cash
package of $288,000 while holding 5.78% of the equity of the Cash Compensation by Business Segment
company.
$364
$350
• Equity holdings generally decrease in direct proportion with $328 $336
$321
$315
increasing revenues, though there is a spike in companies $112 $123
$90 $97
$81 $92
with $5-10M in revenue. CEOs in these companies hold the
highest average level of equity at 5.93%.
$238 $238 $234 $239 $241 $229
Software Communications Hardware, Services, Content, CleanTech

Semiconductors, Consulting, Info
Electronics Integration Provider
27
Average
KEY:
Equity by Headcount (FTEs) Cash Compensation by Revenue

5.88% $419
5.79%
$374
$330 $139
$310 $105
$288
5.31% $107
$61 $91
4.99%
$269 $280
$227 $219 $223
1-20 21-40 41-75 76+ Pre- Up to $5M $5 – 10M $10 – 20M $20M+
Revenue
Equity by Geography Equity by Revenue

6.11% 6.19% 5.93%
5.63% 5.78%
5.11% 5.01% 5.07%
5.37%
5.10%
4.96%
California New Mid- Midwest West South Pre- Up to $5M $5 – 10M $10 – 20M $20M+
England Atlantic Revenue
Equity by Business Segment

7.10%
6.96%
5.64%
3.82%
5.51%
4.45% CHIEF
EXECUTIVE
Software Communications Hardware,
Semiconductors,
Electronics
Services,
Consulting,
Integration
Content,
Info
Provider
CleanTech OFFICER
28 PRESIDENT/ www.compstudy.com
B
25th 75th
COO KEY:
Mean
• President/COOs saw a small increase in average base salary $155 $175 $200
in 2008, rising $5,000 or 2.8% over 2007.
2007
Bonus – 2007 and 2008
• Average target bonuses decreased slightly in 2008 for the
$178
average President/COO, from $63,000 in 2007 to $58,000 in
$165 $180 $200
2008. Actual average bonus paid in 2007 was $55,000, which
represents an attainment rate of 88%.
2008
Equity Holdings
• The average current equity holding for the President/COO is $183
2.88%. Time of hire grants range from .80% at the 25th per-
centile to 2.60% at the 75th percentile. The average time of
hire grants falls very close to the top quartile at 2.58%.

• President/COOs at companies with one or fewer financing
rounds earned, on average, $31,000 less in base salary than $150 $158 $175
≤1
their counterparts at companies with four or more rounds of
financing raised.
$162
• Equity holdings for President/COOs with one or fewer rounds
$165 $190 $200
is 4.98% at the average. With dilution from additional rounds
raised, the average equity holding decreases to 2.05% in 2-3
those companies having raised four or more rounds. $182
$172 $188 $210
• Cash compensation for founding President/COOs varies 4+
largely when compared to their non-founder counterparts. $193
• Founding President/COOs hold a 15.43% average equity stake

in their companies, compared to 2.88% for non-founders.

$165 $180 $200
Non-Founder
$183
$160 $182 $225
Founder
$191
29
25th 75th 25th 75th
Mean Mean

$30 $50 $63 $80 0.80% 1.00% 2.60%
2007 Time of Hire
$11 $32 $55 $60 2.58%

$25 $50 $80 1.00% 1.50% 4.00%
2008 Current
$58 2.88%

$9 $30 $80 0.10% 1.50% 6.00%
≤1 ≤1
$49 4.98%
$42 $50 $80 1.00% 2.15% 4.00%
2-3 2-3
$67 2.79%
$15 $43 $80 1.00% 1.30% 2.00%
4+ 4+
$52 2.05%

$25 $50 $80 1.00% 1.50% 4.00%
$58 2.88%
$41 $51 $120 4.55% 9.00% 26.90%
Founder Founder
$108 15.43%
30 PRESIDENT/ www.compstudy.com
COO B KEY: Salary Bonus

• Total cash compensation for President/COOs rises steadily $269
with increasing headcount levels, from $223,000 at the earli- $232 $238
$223 $68
est stages to $269,000 for those companies with more than $52 $54
75 FTEs. $67
• President/COOs average equity holdings decreased gradually

as company headcount grows, though for the largest compa- $184 $201
$180
nies, there is a spike in holdings for the President/COO. $156
Cash and Equity Compensation by Geography

• Total cash compensation is highest for President/COOs in 1-20 21-40 41-75 76+
California and New England, driven primarily by the two

largest base salary levels among regions.
• Mid-Atlantic and New England President/ COOs hold a

greater stake in equity when compared to the overall average.
Cash Compensation by Geography
Cash and Equity Compensation by Business
$268
Segment $251 $241 $239
$223 $228
• President/COOs of Software and Content/Information $76 $49
$63 $62 $47
Providers earn the highest total cash compensation in 2008 $54
at just under $250,000 at the average, though their counter-
parts in the Software segment are a very close second.
$192 $202
$178 $177 $181
• President/COOs of within the CleanTech sector hold the $169
largest equity stake at 4.76%.
Cash and Equity Compensation by Revenue California New Mid- Midwest West South
England Atlantic
• Average total cash compensation for the President/COO is
greatest for companies with $20M or more revenues at
$305,000.
Cash Compensation by Business Segment

$248 $245 $242 $249
$219 $221
$64 $67 $55 $60
$35 $40
$184 $184 $178 $187 $189 $181

31
Average
KEY:

$305
6.76%
$243 $237 $240 $97

$221
$58 $48 $64
$47
3.04%
2.79%
$208
$185 $174 $189 $176
1.60%
1-20 21-40 41-75 76+ Pre- Up to $5M $5 – 10M $10 – 20M $20M+
Revenue

5.34% 9.40%
3.69%
2.89%
2.39%
2.25%
3.29%
2.60%
1.23% 2.28%
1.27%

4.76%
2.81%
2.09%
3.39%
2.71%
PRESIDENT/
1.43%
COO
B
25th 75th
FINANCIAL KEY:
OFFICER Mean
• Average base salary for CFOs increased 5.2%, or $8,000, $130 $156 $180
from 2007 to 2008.
2007
Bonus – 2007 and 2008
• Average target bonus for the CFO rose slightly to $49,000 in
$157
2008 which represents 29% of base salary.
$144 $165 $185
• Bonus attainment in 2007 for the CFO was 63%.
2008
Equity Holdings
• Time of hire equity grants for non-founding CFOs average
$165
1.01% and ranged from 0.30% at the 25th percentile to 1.20%
at the 75th percentile.
• Average current equity holdings ranged from 0.50% at the

25th percentile to 1.20% at the 75th percentile and the aver-
age current equity stake falls within this range at 0.94%.
Equity holdings did not fluctuate materially for the CFO from
our 2007 report. $135 $150 $170
≤1
• The average CFO base salary generally increases with addi- $159
tional rounds of financing raised, from $159,000, at $145 $173 $185

companies having raised 1 or fewer rounds, to $166,000 at
2-3
companies having raised four or more rounds.
$165
• Contrary to the effects of dilution, equity holdings for CFOs $138 $174 $188
increased significantly with 2-3 financing rounds, doubling to
1.05%. With four or more rounds raised average equity held 4+
decreases slightly to 0.91% for the CFO. $166

• Non-founder CFOs earned an average total cash compensa-
tion of $6,000 more than their founding counterparts.
• Moreover, founding CFOs are targeted for a $7,000 smaller
average bonus than non-founding CFOs. $144 $165 $185
• Founding CFOs hold an average equity stake of 3.24%, com-

Non-Founder
pared to 0.94% for non-founders.
$165
$125 $160 $175
Founder
$159
33
25th 75th 25th 75th
Mean Mean

$22 $36 $45 $59 0.30% 1.00% 1.20%
2007 Time of Hire
$5 $20 $28 $40 1.01%

$25 $40 $55 0.50% 0.90% 1.20%
2008 Current
$49 0.94%

$25 $35 $80 0.00% 0.05% 1.00%
≤1 ≤1
$53 0.52%
$24 $38 $52 0.50% 1.00% 1.30%
2-3 2-3
$48 1.05%
$25 $45 $55 0.50% 1.00% 1.10%
4+ 4+
$48 0.91%

$25 $40 $55 0.50% 0.90% 1.20%
$49 0.94%
$19 $35 $57 1.00% 2.00% 4.00%
Founder Founder
$42 3.24%
FINANCIAL
OFFICER
B KEY: Salary Bonus

• Average total cash compensation for CFOs climbs steadily $244
with increasing company headcount. $207
$202 $61
• Equity holdings for CFOs decrease as companies grow to 41- $176 $40
$49
75 FTEs. With more than 75 FTEs equity holdings rise again $40
to 0.94%.
$167 $183
Cash and Equity Compensation by Geography $136
$153
• CFOs across each region earn a total cash compensation

ranging from a high of $228,000 in the Mid-Atlantic to a low
of $174,000 in the Midwest. Base salary is highest for 1-20 21-40 41-75 76+
California CFOs at an average of $176,000.
• CFO equity holdings ranged from a high of 1.11% in the Mid-

Atlantic to a low of 0.80% in the West.
Cash and Equity Compensation by Business Cash Compensation by Geography

Segment $228
$223 $222
• CFOs of Communication companies are expected to earn the $207
$198
$47 $56 $54
highest average total cash compensation for 2008 at $231,000. $45 $174
$48
$34
• Total cash rises consistently for the CFO with increasing
company revenues, from nearly $180,000 at pre-revenue $176 $172 $168
$162 $150
$140
companies to $262,000 at companies with greater than $20
Million in revenue.
• CFO equity rises gradually as the company earns greater California New Mid- Midwest West South
England Atlantic
revenue.

$231
$216 $214
$53 $200 $195
$43 $192
$52
$47 $33
$41
$164 $178 $171

$153 $151 $162

35
Average
KEY:

1.09% $262
$233
1.21% 0.94% $74
0.84% $201
$191 $56
$179 $41
$23 $38
$177 $188
$156 $153 $160
1-20 21-40 41-75 76+ Pre- Up to $5M $5 – 10M $10 – 20M $20M+
Revenue

1.11% 1.07%
0.98% 0.96% 0.98% 0.98%
0.87%
0.84% 0.84% 0.83%
0.80%

1.51%
0.87%
0.96%
1.04%
0.77%
0.89%
CHIEF
FINANCIAL
Semiconductors,
Electronics
Services,
Consulting,
Integration
Content,
Info
Provider
CleanTech OFFICER
B
25th 75th
TECHNOLOGY KEY:
OFFICER Mean
• Average base salary for the CTO increased by $8,000, or $130 $160 $185
5.0%, between 2007 and 2008.
2007
Bonus – 2007 and 2008
• Target bonus increased for CTOs, from an average of $52,000
$162
in 2007 to $57,000 in 2008. Actual bonus paid out in 2007
$150 $173 $195
averaged of $30,000, a 57% rate of attainment.
Equity Holdings 2008

• Time of hire grants for the CTO range from 0.20% at the 25th
percentile to 1.70% at the 75th percentile. The average time $170
of hire grant falls within this spectrum at 1.19%. Average
current equity for the CTO is 1.53%.

• Base salary does not fluctuate greatly for the average CTO
relative to increasing financing rounds.
$130 $170 $190
≤1
• Compared to early stage companies, average target bonus
sharply increases for those CTOs in companies that have
raised two or three rounds of financing. $166
• For companies with one or fewer rounds raised the average $143 $165 $195
equity stake is 1.76%, decreasing for each additional compar-
2-3
ative financing stage in our report.
$168
Base, Bonus and Equity by Founder Status $150 $175 $192
• Non-founding CTOs earn, on average, $10,000 more in total 4+

cash compensation than their founder counterparts.
$173
• As expected, founding CTOs hold considerably more equity in
their companies than non-founders, with an average of 8.91%.

$150 $173 $195
Non-Founder
$170
$140 $170 $190
Founder
$165
37
25th 75th 25th 75th
Mean Mean

$24 $40 $52 $65 0.20% 1.00% 1.70%
2007 Time of Hire
$5 $20 $30 $50 1.19%

$20 $37 $63 0.60% 1.00% 2.00%
2008 Current
$57 1.53%

$9 $27 $37 0.00% 1.00% 1.80%
≤1 ≤1
$38 1.76%
$25 $45 $70 0.50% 1.00% 2.00%
2-3 2-3
$69 1.64%
$20 $42 $63 1.00% 1.10% 1.70%
4+ 4+
$54 1.28%

$20 $37 $63 0.60% 1.00% 2.00%
$57 1.53%
$22 $40 $60 2.50% 6.00% 13.30%
Founder Founder
$52 8.91%
TECHNOLOGY
OFFICER
B KEY: Salary Bonus

• Total cash compensation for CTOs gradually increases with $268
increasing headcount. At the largest companies, there is a
$212 $218 $85
larger jump in total cash compensation, driven by a target $205
$48 $44
bonus nearly double that of the next smaller company stage $50
CTO.
Cash and Equity Compensation by Geography $155 $164 $174 $183
• CTOs in California earn the highest average base salary at

$189,000.
• Average total cash compensation for the CTO varies widely 1-20 21-40 41-75 76+
across regions.
• CTO equity holdings are greatest in California, at 2.18% fol-

lowed by the West with 1.64%.
Cash and Equity Compensation by Business Cash Compensation by Geography

Segment $288
• Software CTOs are expected to earn the largest total cash
$242
compensation in 2008 at $242,000 and will enjoy the largest $119
$230
$53 $211 $203
equity stake in their companies with 1.81%. $74
$33 $42
$163
Cash and Equity Compensation by Revenue $24
• CTOs at the most developed companies, those with greater $189 $169 $178 $156 $161
than $20M in revenues, earn considerably more cash com- $139
pensation at the average than CTOs at smaller companies.

England Atlantic

$242 $240
$222
$55 $208 $205
$71 $43 $189
$35 $45
$34
$171 $185 $179 $173

$155 $160

39
Average
KEY:

2.90% $295
$243
$110
$211 $58
$200
$189
$43
$51 $38
1.45%
1.13%
0.98%
$168 $185 $185
$149 $151
1-20 21-40 41-75 76+ Pre- Up to $5M $5 – 10M $10 – 20M $20M+
Revenue

2.18% 1.95%
1.78% 1.74%
1.59% 1.57% 1.64%
1.10% 0.93%
0.82%
0.69%

1.81%
1.76%
0.90%
1.34%
1.10% 1.03%
CHIEF
TECHNOLOGY
Semiconductors,
Electronics
Services,
Consulting,
Integration
Content,
Info
Provider
CleanTech OFFICER
40 HEAD OF www.compstudy.com
B
25th 75th
ENGINEERING KEY:
Mean
• Average base salaries for Heads of Engineering rose by $135 $150 $175
$7,000 from 2007 to 2008.
2007
Bonus – 2007 and 2008
• Average target bonus did not change materially from 2007 to
$156
2008, rising $1,000 for the Head of Engineering.
$147 $165 $180
• Bonus attainment in 2007 for the Head of Engineering was 63%.
• 2008 target bonus as a percentage of base salary is 24%. 2008
Equity Holdings $163

• The median equity grant remains at 1.00% at time of hire for the
Head of Engineering, though at the average that figure is 1.29%.
• Current equity for Heads of Engineering ranges from 0.50%

at the 25th percentile to 1.50% at the 75th percentile, with an
average of 1.29%. Base Salary by Financing Rounds
$130 $150 $188
• Average base salary for Heads of Engineering trends slightly ≤1
upward based on the number of rounds of financing, ranging
$153
from $153,000 for companies with one or fewer rounds raised
$150 $165 $180
to $166,000 for companies with two or three financing rounds.
2-3
• Average target bonus decreases steadily as the company rais-
es additional rounds of funding. However, the median Head of $166
Engineering experiences little change in target bonus. $146 $165 $180
• Consistent with the expected effects of dilution, average cur- 4+

rent equity holdings for Heads of Engineering decrease when $163
comparing companies across financing stages. At the earliest
stage, the Head of Engineering holds 1.79% of the company,
decreasing to 0.99% at companies with four or more rounds
raised. Interestingly, at the median Heads of Engineering
hold 1.00% across all rounds of funding. Base Salary by Founder Status
$147 $165 $180
• Non-founding Heads of Engineering receive an average base
Non-Founder
salary that is slightly higher than their founder counterparts.
• As expected, founding Heads of Engineering have a substan-

$163
tially greater current equity stake in the company. The
$145 $162 $175
average current equity for founders is 6.22% while for non-
founders it is 1.29%.
Founder
$161
41
25th 75th 25th 75th
Mean Mean

$20 $30 $38 $50 0.30% 1.00% 1.50%
2007 Time of Hire
$6 $15 $24 $30 1.29%

$24 $31 $50 0.50% 1.00% 1.50%
2008 Current
$39 1.29%

$20 $31 $80 0.10% 1.00% 2.00%
≤1 ≤1
$56 1.79%
$25 $32 $50 0.80% 1.00% 1.50%
2-3 2-3
$39 1.34%
$14 $30 $43 0.40% 1.00% 1.40%
4+ 4+
$33 0.99%

$24 $31 $50 0.50% 1.00% 1.50%
$39 1.29%
$16 $30 $50 1.50% 4.60% 8.00%
Founder Founder
$49 6.22%
ENGINEERING B KEY: Salary Bonus

• Base salary increases for the Head of Engineering as their $203 $208 $206
$193
company increases in size from 21-40 FTEs to 41-75 FTEs, a $41 $38
$44 $35
$9,000 rise.
• Target bonus remains largely unchanged for the Head of

Engineering across company sizes.
$159 $158 $167 $168
• As expected, equity holdings decline for the non-founder
Heads of Engineering as the company grows.
Cash and Equity Compensation by Geography 1-20 21-40 41-75 76+

• Total cash compensation is highest among Heads of
Engineering in California as compared to the other regions,
driven by the largest base salary and highest target bonus at
the average.
• Heads of Engineering in California also lead the pack with

the largest average equity holdings, at 1.73%.
$227
Cash and Equity Compensation by Business $48 $198
$188
$197
$184
Segment $37
$30 $39 $40
• CleanTech Heads of Engineering earn the lowest total cash
and equity compensation of the segments, driven by a base Sample
size too
salary of $144,000. $179 small to
$161 $154 report $149 $157

• Average total cash compensation for Heads of Engineering
rises gradually as a company grows in revenue, from California New Mid- Midwest West South
England Atlantic
$196,000 at pre-revenue companies to $214,000 for those
with companies earning more than $20M.
• Not surprisingly, Heads of Engineering for companies that

are pre-revenue have much greater current equity holdings
than their counterparts at companies with revenues in excess
of $5M. Cash Compensation by Business Segment
$204 $206 $205
$191
$42 $29
$50 $172
$45
$28
Sample
size too
$162 $176 small to
$156 $147
report $144

43
Average
KEY:

1.98% $209 $214
$196 $198 $202
$33 $47 $46
$34 $39
1.24%
0.96% 1.02%
$162 $159 $169 $162 $168
1-20 21-40 41-75 76+ Pre- Up to $5M $5 – 10M $10 – 20M $20M+
Revenue

1.73% 1.84%
1.30% 1.35%
1.24%
1.00% 1.06%
0.97%
Sample 0.97%
size too 0.81%
small to
report

1.39%
1.30% 1.34%
1.16%
Sample
size too
0.78%
HEAD OF
small to
report
ENGINEERING
B
25th 75th
SALES KEY:
Mean
• Average base salary for Heads of Sales increased by 4.3% $140 $160 $180
from 2007 to 2008.
2007
Bonus – 2007 and 2008
• Average 2008 projected bonuses for Heads of Sales are
$160
expected to be significantly higher, 42.8%, than actual bonus-
$150 $169 $190
es paid in 2007. However, the average target bonus for 2008
is 2% lower than the average target bonus for 2007.
2008
Equity Holdings
• The average time of hire equity grant for non-founding Heads $167
of Sales is 1.20%, which is above the median of 1%.
• On average, the Head of Sales holds 1.21% of the company’s

equity.
Base, Bonus and Equity by Financing Rounds Base Salary by Financing Rounds
• Average base salaries for Heads of Sales are approximately
$120 $150 $180
≤1
equal at companies that have had two to three rounds of
financing and at companies that have had four or more
rounds. Average target bonuses for that position steadily $150
increase at companies with more rounds of financing. The
$150 $170 $185
average projected bonus is almost $10,000 higher at compa-
nies with four or more rounds of financing than at companies 2-3
with one or fewer rounds of financing. $169
$150 $169 $190
• Heads of Sales at companies with one or fewer rounds of
financing raised have relatively wide ranging equity holdings, 4+
from zero at the 25th percentile to 2.70% at the 75th per-
$170
centile. This can possibly be explained by varied
responsibilities for the role in early stage ventures.
Salary, Bonus and Equity by Founder Status

• The average base salary for founding Heads of Sales is only
slightly higher than the average base salary for non-
founders, while the median non-founder Head of Sales earns $150 $169 $190
slightly more in base salary.

Non-Founder
• The non-founding Heads of Sales are anticipated to receive
an average at-plan bonus of $98,000 in 2008, compared to
$77,000 for founders in the same year. $167
$150 $165 $185
• Founding Heads of Sales make up the difference in equity
holdings. Founding Heads of Sales hold more than six times
Founder
the amount of equity as their non-founding counterparts. This
is a nearly 100% increase in their equity holdings from 2007.
$170
45
25th 75th 25th 75th
Mean Mean

$50 $100 $100 $150 0.50% 1.00% 1.50%
2007 Time of Hire
$22 $50 $70 $100 1.20%

$40 $90 $150 0.60% 1.00% 1.40%
2008 Current
$98 1.21%

$30 $75 $130 0.00% 0.75% 2.70%
≤1 ≤1
$92 1.41%
$40 $90 $150 0.80% 1.00% 1.40%
2-3 2-3
$97 1.14%
$40 $100 $150 0.60% 1.00% 1.30%
4+ 4+
$100 1.21%

$40 $90 $150 0.60% 1.00% 1.40%
$98 1.21%
$24 $37 $150 1.75% 3.00% 15.00%
Founder Founder
$77 7.45%
SALES B KEY: Salary Bonus

• Both average base salary and average target bonus for $278 $290
Heads of Sales steadily increase as company headcount $251
$228
increases from 1-20 to 76 or more full-time employees $102 $110
$91
(FTEs), with average salary 24% higher and average expected $83
2008 bonus 32.5% higher at the larger companies.
• Equity holdings steadily decline as company headcount increas-

$176 $180
es with Heads of Sales at companies with 76 or more FTEs $145 $160
holding 0.88% of equity as compared to Heads of Sales at com-

panies with 1-20 FTEs who hold 1.70% of equity on average.
1-20 21-40 41-75 76+

• Heads of Sales in California are projected to edge out their
counterparts in the other geographies in total cash compen-
sation for 2008, followed closely by those in the Mid-Atlantic
and South. This marks a shift from 2007, when the total cash Cash Compensation by Geography
compensation of the Heads of Sales in the Mid-Atlantic and
$285
New England topped the charts. $268 $266
$257 $252
• Equity holdings for Heads of Sales in the Mid-Atlantic outpace $112 $91
$223
$93 $98
holdings in other regions at an average of 1.51%, as com- $95
$69
pared to 1.30% in New England and 1.15% in California. Equity
holdings for Heads of Sales in the Midwest and the South are
significantly lower, at 0.95% and 0.97% respectively. $177
$173 $164 $157 $168
$154

Segment
• Average total cash compensation continues to be higher for England Atlantic
Heads of Sales in the Software segment than in other segments.
2008 bonuses are also projected to be higher for Heads of Sales
in this segment, at almost 1.5 times more than target bonuses in
the IT Services/Consulting/Systems Integration segment.
• Non-founder Heads of Sales equity holdings vary significantly Cash Compensation by Business Segment
across business segments. Interestingly, those in the
$283
CleanTech segment are at the top of the pack, with equity
$252 $247 $253
holdings at 1.84%. $232
$113
$91 $79 $88 $197
$48
• Total cash compensation for Heads of Sales trends upward
as company revenues increase, with Heads of Sales at com-
panies with $20M+ of revenue receiving 45.6% more than at $170 $161 $168 $160 $165 $149
pre-revenue companies.
• Equity holdings by Heads of Sales are the highest at pre-rev-

enue companies. Heads of Sales at companies with $10-$20M Semiconductors,
Electronics
Consulting,
Integration
Info
Provider
of revenue hold the lowest percentage of equity on average.
47
Average
KEY:

1.70% $301
$278
$266
$243 $251
1.26% $118
$96 $108
1.08% $81 $91
0.88%
$170 $170 $183

$162 $160
1-20 21-40 41-75 76+ Pre- Up to $5M $5 – 10M $10 – 20M $20M+
Revenue

1.51% 1.45%
1.26% 1.31%
1.30%
1.15% 1.18%
1.00%
0.95% 0.97% 0.89%

1.84%
1.33%
0.77%
1.11%
0.89%
0.99%
HEAD OF
SALES
48 HEAD www.compstudy.com
B
25th 75th
OF KEY:
MARKETING Mean
Salary and Bonus – 2007 and 2008 Base Salary – 2007 and 2008
• Average base salary for Heads of Marketing increased slight- $140 $160 $175
ly, by 3.75%, between 2007 and 2008, rising from $160,000 to
$166,000. The median base salary increased by $10,000.
2007
• The average target bonus for Heads of Marketing remained
flat from 2007 to 2008, though Heads of Marketing received, $160
on average, 62.5% of their target bonus last year. $146 $170 $185
Equity Holdings
2008
• Time of hire grants for Heads of Marketing averaged 0.91%, a
24% decrease from 2007.
$166
• On average, the Head of Marketing holds 0.92% of their com-
pany.
Salary, Bonus and Equity by Financing Rounds

• The average and median base salary for Heads of Marketing
steadily increases as companies raise additional rounds of
financing, evidencing the greater need for marketing expert- $135 $160 $180
≤1
ise as companies mature. On the other hand, the average
bonus for Heads of Marketing decreases with additional
rounds of financing. The average projected bonus for Heads $159
of Marketing dips by $7,000 from companies with two or $150 $165 $184
more rounds of financing to those with four or more rounds.
2-3
• Average equity holdings for Heads of Marketing at companies $165
with two to three rounds are higher than average equity hold- $145 $170 $190
ings for Heads of Marketing one or fewer rounds. The equity
holdings for the Head of Marketing in the later stage compa- 4+
nies almost match the holdings for the Heads of Marketing at $169
companies with one or fewer rounds.
Salary, Bonus and Equity by Founder Status

• As expected, average base salary and average target bonus
for non-founders are higher than for founding Heads of Base Salary by Founder Status
Marketing, reflecting the cost of bringing in outside market- $146 $170 $185
ing expertise.
• Average equity holdings are significantly greater for Non-Founder

founders, 7.19%, than for non-founders, 0.92%.
$166
$135 $168 $178
Founder
$159
49
25th 75th 25th 75th
Mean Mean

$25 $40 $48 $55 0.20% 0.90% 1.25%
2007 Time of Hire
$5 $25 $30 $40 0.91%

$25 $40 $55 0.40% 0.90% 1.25%
2008 Current
$48 0.92%

$10 $30 $72 0.00% 0.70% 1.00%
≤1 ≤1
$53 0.69%
$25 $45 $60 0.65% 1.00% 1.37%
2-3 2-3
$50 1.10%
$25 $40 $55 0.30% 0.70% 1.00%
4+ 4+
$43 0.74%

$25 $40 $55 0.40% 0.90% 1.25%
$48 0.92%
$20 $30 $60 1.30% 2.50% 9.32%
Founder Founder
$43 7.19%
50 HEAD www.compstudy.com
OF
MARKETING
B KEY: Salary Bonus

• Average total cash compensation for the Head of Marketing $230
$212 $212
increases as the number of full-time employees (FTEs) $53
increases. Surprisingly, the target bonus for Heads of $176 $53 $42
Marketing at companies with 41-75 FTEs is lower than at $31
companies with 21-40 as well as those at companies with 76

or more FTEs.
$170 $177
$145 $159
• Average equity holdings for Heads of Marketing generally
decline as headcount increases, with those holding the position
at companies with 1-20 FTEs enjoying more than 125% greater
equity holdings than at companies with 76 or more FTEs. 1-20 21-40 41-75 76+

• Interestingly, the total cash compensation for Heads of
Marketing in the West and California bested those in New
England and the Mid-Atlantic, marking a shift from 2007. Cash Compensation by Geography
Those in the New England came in at the bottom of the pack.
$222 $226
• Heads of Marketing in California received the highest average $212 $207
$198
$45 $68
base salary at $177,000. Heads of Marketing in the West are $39
$45 $43
targeted to receive the largest average bonus of $68,000.
Sample
Cash and Equity Compensation by Business size too
small to
Segment $177
$159 $167 report $158 $164
• Heads of Marketing in the Communications segment receive

the highest average total cash compensation, largely due to
having the highest base salary, $180,000.
England Atlantic
• Average current equity holdings for Heads of Marketing vary
slightly by business segment, with Heads of Marketing in the
Communications, Cleantech and Services/Consulting/
Systems Integration segments having the lowest average
holdings.
$228
• Total cash compensation for Heads of Marketing generally $214 $215 $213
$210
trends upward as company revenues increase. However, $48
$186
$48 $39 $47 $54
Heads at companies with $20M of revenue or more experi-
$45
enced a slight drop in total cash compensation despite
enjoying the highest average projected bonus.
$180 $171 $168
• In general, equity holdings for Heads of Marketing decline $166 $159
$141
with increasing company revenue, from 1.15% for pre-rev-
enue companies to 0.58% for companies with more than
$20M of revenue. Surprisingly, Heads of Marketing at compa-
nies with $5-10M of revenue enjoy the greatest equity Semiconductors,
Electronics
Consulting,
Integration
Info
Provider
holdings, at 1.16%.
51
Average
KEY:

1.50% $225 $232 $230
$199 $53
$189 $51 $59
$40
$35
0.95% 0.89%
0.66%
$174 $179 $171
$153 $159
1-20 21-40 41-75 76+ Pre- Up to $5M $5 – 10M $10 – 20M $20M+
Revenue

1.09% 1.15% 1.16%
1.00%
0.94%
0.96%
0.85%
0.84%
0.59%
Sample 0.58%
size too
small to
report

0.95% 0.97%
0.94%
0.78%
0.75% 0.73%
HEAD OF
MARKETING
B
25th 75th
BUSINESS KEY:
DEVELOPMENT Mean
• The average base salary for Heads of Business Development $144 $155 $175
rose by 5% from $157,000 in 2007 to $165,000 in 2008.
2007
Bonus 2007 and 2008
• At $66,000, the average 2008 target bonuses for Heads of
$157
Business Development are only 4.7% higher than 2007 target
$150 $165 $186
bonuses.
• At the average the Head of Business Development received

2008
about 52% of their target bonus in 2007, or $33,000 on a tar-
get of $63,000. This 52% attainment was the lowest among
$165
all positions surveyed in this year’s report.
Equity Holdings
• The Head of Business Development holds an average of
1.05% of the company.
• Time of hire equity granted to Heads of Business Development

averages 1.23%, with a median time of hire grant of 1.00%. $131 $150 $185
≤1
• Heads of Business Development at companies with two to $158
three rounds of financing are expected to receive bonuses $150 $170 $185
that are roughly equal to those at four or more rounds of
2-3
financing, while the Heads at companies with one or fewer
rounds of financing enjoy higher bonuses at both the median $165
$150 $165 $180
and average.
• As expected, equity holdings for the Head of Business 4+

Development decline with an increase in company funding $168
from an average of 1.80% in those with one or fewer rounds
to 0.76% in those companies who have raised more than four
rounds.
Base, Bonus and Equity by Founder Status Base Salary by Founder Status
• Unlike other positions the average base salary for non- $150 $165 $185
founder Heads of Business Development is roughly the same
as the average base salary for founders.
Non-Founder
• The average target 2008 bonus for non-founding Heads of
Business Development is $16,000, or 32% higher than the $165
average bonus for founders. $150 $165 $190
• Founding Heads of Business Development hold an average

6.31% equity stake compared to 1.05% for non-founders. Founder
$166
53
25th 75th 25th 75th
Mean Mean

$25 $38 $63 $100 0.30% 1.00% 1.20%
2007 Time of Hire
$5 $20 $33 $50 1.23%

$25 $40 $95 0.50% 1.00% 1.20%
2008 Current
$66 1.05%

$25 $65 $80 0.00% 1.00% 1.75%
≤1 ≤1
$80 1.80%
$30 $45 $90 0.50% 1.00% 1.20%
2-3 2-3
$65 1.08%
$23 $38 $100 0.09% 0.66% 1.00%
4+ 4+
$63 0.76%

$25 $40 $95 0.50% 1.00% 1.20%
$66 1.05%
$22 $50 $75 2.10% 4.00% 6.20%
Founder Founder
$50 6.31%
BUSINESS
DEVELOPMENT
B KEY: Salary Bonus

• Both base salary and total cash compensation for Heads of $237 $237 $238
Business Development are relatively flat as companies increase $217
$71 $65
their headcount, although there is a slight downward trend in $82
$53
total cash compensation for Heads at companies with 41-75 full-
time employees (FTEs). The target bonuses generally decrease as
the company expands, although Heads of Business Development
$166 $164 $173
at companies with 76 or more FTEs enjoy a modest increase in $155
target bonuses over those at companies with 41-75 FTEs.
• As anticipated, Heads of Business Development equity hold-

ings decrease steadily with increasing company headcount, 1-20 21-40 41-75 76+
although Heads at companies with 21-40 FTEs enjoy the

greatest holdings at 1.61%.

• Average total cash compensation for Heads of Business Cash Compensation by Geography
Development is anticipated to be highest in the West during
$255
2008 at $255,000, driven in large measure by an $84,000
$233 $235
average target bonus. $223 $217
$84
$64 $70
$62 $52
• On the other hand, Heads of Business Development in the
West hold the lowest average equity holdings at 0.79%.
Sample
size too
• Heads of Business Development in the South hold the high- small to
$169 $165 report $171 $165
est average equity holdings at 1.58%. $161

Segment California New Mid- Midwest West South
England Atlantic
• Heads of Business Development in the Content/Information
Provider business segment have the highest total cash com-
pensation at $254,000, though also hold the lowest average
equity in their companies, 0.76%.
• Heads of Business Development in the Communications sec-

tor have the highest equity holdings at 1.28%. Cash Compensation by Business Segment
$254
$240
• The total cash compensation for Heads of Business $74 $201 $201 $84 $197
$62
Development is generally flat at companies with various lev- $41 $27
$53
els of revenues; however there is a spike at companies with
$20M+ in revenue, with Heads of Business Development at
these organizations receiving $287,000 or roughly 30% more $166 $163 $161 $170 $170
$148
than companies under $20M.
• Average equity holdings for Heads of Business Development

increase from pre-revenue companies up to $5M companies, Software Communications Hardware, Services, Content, CleanTech
but then taper off and are lowest at companies with $20M or Electronics Integration Provider
more in revenue.
55
Average
KEY:

1.61% $287
1.43%
$220 $218 $218 $220 $111
$54 $61 $46

$66
0.77%
0.57%
$164 $157 $174 $176
$154
1-20 21-40 41-75 76+ Pre- Up to $5M $5 – 10M $10 – 20M $20M+
Revenue

1.58% 1.43%
1.28%
1.09%
0.97% 0.94%
Sample 0.79% 0.71% 0.72%
size too 0.65%
small to
report

1.28%
1.14%
1.00%
0.96%
0.76%
0.80% HEAD OF
BUSINESS
Semiconductors,
Electronics
Services,
Consulting,
Integration
Content,
Info
Provider
CleanTech DEVELOPMENT
B
25th 75th
HUMAN KEY:
RESOURCES Mean
• Average base salary for the Head of Human Resources $80 $95 $135
increased slightly from 2007 to 2008 from $105,000 to
$113,000.
2007
Bonus – 2007 and 2008

$105
• The average Head of Human Resources received a bonus of
$85 $108 $145
$15,000 on a target of $25,000 in 2007. In 2008, average tar-
get bonus is $28,000, or 24% of base salary.
2008
Equity Holdings
• Current equity held by the non-founding Head of Human $113
Resources is the lowest among the executive positions sur-
veyed in this report and ranges from zero at the 25th
percentile to 0.30% at the 75th percentile.

• Average base salary and target bonus are higher for those
Heads of Human Resources at companies with two or three $100 $130 $144
≤1
rounds of financing raised than for their counterparts at
companies with four or more rounds raised.
$130
• The average equity position held by the Head of Human
$85 $105 $150
Resources drops significantly as the company moves from
two to three rounds of financing to four or more rounds. For 2-3
those companies with two to three rounds raised, the non- $113
founder Head of Human Resources holds an average of $85 $95 $130
0.34% of the company, compared to 0.13% for those at com-
panies with four or more rounds of financing raised. 4+
$104

$85 $108 $145
Non-Founder
$113
Founder Sample size too small to report

57
25th 75th 25th 75th
Mean Mean

$10 $14 $25 $28 0.00% 0.06% 0.30%
2007 Time of Hire
$5 $10 $15 $20 0.24%

$10 $18 $34 0.00% 0.10% 0.30%
2008 Current
$28 0.27%

$4 $38 $75 0.00% 0.10% 0.30%
≤1 ≤1
$63 0.31%
$10 $16 $32 0.05% 0.20% 0.50%
2-3 2-3
$23 0.34%
$10 $19 $25 0.00% 0.10% 0.20%
4+ 4+
$22 0.13%

$10 $18 $34 0.00% 0.10% 0.30%
$20 0.27%
Founder Sample size too small to report Founder Sample size too small to report
HUMAN
RESOURCES
B KEY: Salary Bonus

• Total cash compensation and equity holdings for the Head of $148
Human Resources are both higher at companies with 76 or $129 $129 $31
more FTEs when compared to those at companies with 41-75 $26 $17
FTEs. The rise in equity holdings can possibly be attributed to

the broader role that the Head of Human Resources plays in Sample
size too
these larger organizations. small to
$112 $117
report $103

• Heads of Human Resources in California earn the highest
total cash compensation; however, Heads in the West have 1-20 21-40 41-75 76+
the largest bonus at $46,000.
• Heads of Human Resources in California also hold the largest

equity stakes in their companies with 0.54% at the average.
Cash and Equity Compensation by Revenue Cash Compensation by Geography

• Average total cash and equity cash compensation varied with
$164
company revenues with Heads of Human Resources at com- $158
$30 $144
panies earning $20M or more receiving an average of $28
$130
$153,000 in cash compensation, with 0.39% in equity holdings. $46 $16
Sample Sample
size too size too
$134 $130 small to small to
report report $114
$98

England Atlantic

$157
$141
$46
$25
$108
$12
Sample Sample Sample
size too size too size too
small to small to small to
$116 report report $111 report
$96

59
Average
KEY:

0.28% $149 $153
$145
0.24% $33 $25 $36
$124 $119
$16 $217
0.17%
Sample
size too
small to $120 $117
$116 $108
report $102
1-20 21-40 41-75 76+ Pre- Up to $5M $5 – 10M $10 – 20M $20M+
Revenue

0.54% 0.39%
0.28%
0.32% 0.23% 0.22%

Sample Sample Sample
size too size too size too
0.22% small to small to small to
report report report
0.09%

0.53%
0.24%
Sample
size too
Sample
size too
Sample
size too
HEAD OF
small to
report 0.17%
small to
report
small to
report
HUMAN
Semiconductors,
Electronics
Services,
Consulting,
Integration
Content,
Info
Provider
CleanTech RESOURCES
B
25th 75th
PROFESSIONAL KEY:
SERVICES Mean
• Average base salary for the average Head of Professional $130 $150 $170
Services rose $8,000 in 2008 to $156,000.
2007
Bonus – 2007 and 2008
• The Head of Professional Services received an average bonus
$148
of $33,000 in 2007, which represents 72% of the 2007 target.
$135 $160 $180
Average target bonus dipped slightly lower for the Head of
Professional Services from 2007 to 2008.
2008
Equity Holdings
• Current equity held by the non-founding Heads of Professional $156
Services is 0.75% at the average and ranges from 0.10% at the
25th percentile to 1.00 % at the 75th percentile.
• The average time of hire equity granted to the Head of

Professional Services is 0.60%.
≤1
• Average base salary and bonus for Heads of Professional
Services are slightly lower at companies at later rounds of Sample size too small to report
financing raised; however, average equity holdings for those
same executives at companies with four or more rounds of
$150 $160 $185
financing are one-third greater than their counterparts at
companies with two or three rounds raised. 2-3
$163
$125 $150 $170
4+
$149

$135 $160 $180
Non-Founder
$156
$126 $163 $183
Founder
$160
61
25th 75th 25th 75th
Mean Mean

$25 $45 $46 $60 0.10% 0.40% 1.00%
2007 Time of Hire
$15 $32 $33 $48 0.60%

$22 $45 $64 0.10% 0.30% 1.00%
2008 Current
$45 0.75%
≤1 Sample size too small to report ≤1 Sample size too small to report
$30 $50 $74 0.16% 0.50% 1.00%
2-3 2-3
$54 0.66%
$15 $31 $55 0.27% 0.40% 0.80%
4+ 4+
$35 0.88%

$22 $45 $64 0.10% 0.30% 1.00%
$45 0.75%
$20 $25 $100 0.96% 2.20% 7.75%
Founder Founder
$60 7.23%
PROFESSIONAL
SERVICES
B KEY: Salary Bonus

• With increasing headcount, total cash compensation for $206 $205
Heads of Professional Services rises from $182,000 in com- $182
$46 $48
panies with 21-40 FTEs to $206,000 at companies surveyed $42
with 41-75 FTEs where it plateaus.
Sample
• Heads of Professional Services in companies with greater size too
small to
than 40 FTEs see equity holdings reduced by over one-third report
$160 $157
$140
from the 0.86% held by those in companies with 21-40 FTEs.

• There is a steady trend upward in total cash compensation 1-20 21-40 41-75 76+
for the Head of Professional Services as company revenue

increases. The reverse correlation holds true for average
equity holdings.

$236
$207 $209
$198 $57
$187
$43 $58
$49 $24
Sample
size too
small to
$164 $179
$149 $163 report $151

England Atlantic

$206
$47
Sample Sample Sample Sample Sample

size too size too size too size too size too
$159 small to small to small to small to small to
report report report report report

63
Average
KEY:

0.86% $240
$218
$189 $194 $66
$57
0.56% 0.59% $38 $40
$147
$20
Sample
size too
small to
report $161 $174
$151 $154
$127
1-20 21-40 41-75 76+ Pre- Up to $5M $5 – 10M $10 – 20M $20M+
Revenue

1.34% 1.17%
0.84%
0.90%
0.68% 0.68%
Sample 0.62%
size too 0.61%
0.50% small to
report
0.15%

0.66%
Sample
size too
Sample
size too
Sample
size too
Sample
size too
Sample
size too
HEAD OF
small to
report
small to
report
small to
report
small to
report
small to
report
PROFESSIONAL
Semiconductors,
Electronics
Services,
Consulting,
Integration
Content,
Info
Provider
CleanTech SERVICES
64 BOARD OF www.compstudy.com
DIRECTORS B
Board Demographics Board Demographics
• There were 342 reported Chairpersons in this survey. 56% 56%
Chairperson
• The Chairperson is the CEO of the company 56% of the time.
Board Member
An investor acts as Chairperson at 16% of the companies
surveyed.
• Of the over 1,200 Board Members reported in this survey,

19%
investors comprise more than half of the seats, while outside 16%
14%
members make up approximately 20% of the Board. 10% 11%
6%
4% 3% 4%
2%
Board Composition by Financing Round
CEO Current Former Investor Outside Academia/
• With increasing financing rounds, the makeup of the Board of Executive Executive Executive Other
(Non-CEO)
Directors shifts to include both a greater number of outside
members and, more so, a larger percentage of investors.
• Investors comprise 33% of the Board of Directors in the ear- Percentage of Outside Directors
liest stage companies, shifting to approximately half of the Receiving Annual Grants
Board in those companies having raised five or more rounds 50%
Chairperson
of financing.
Board Member
• Current and former employees lose seats on the Board with
increasing financing rounds raised.
Annual Cash and Equity Grants 15%

10%
• Half of the outside Chairpersons surveyed receive an annual
5%
cash grant to serve on the Board of Directors, while only 15%
of outside Board Members receive the same. Annual Cash Grants Annual Equity Grants
• Very few outside Chairpersons and Board Members receive

annual equity grants for Board service, 10% and 5%,
respectively.
Percentage of Outside Directors
Receiving Annual Grants
12 25 40
Chairperson
41
4 12 20
Board
Member
14
BOARD OF 65
A
25th Median 75th
percentile percentile
KEY:
DIRECTORS
Mean
Outside Board of Directors Outside Board of Directors Compensation

Current Equity – Chair and Board Member • The median outside Chairperson holds 0.60% of the compa-
ny, though at the average the equity held is 1.93%. This
0.40% 0.60% 1.40%
suggests a small number of outside Chairpersons with rela-
tively large holdings. Outside board members hold a median
Chairperson position of just under one-third of a percent.
• The outside Chairperson receives an average equity grant of

1.93%
0.48% to join the board, while the average outside board
0.09% 0.30% 0.72%
member receives 0.40%. At the 75th percentile the chairper-
Board son receives 0.70% to join the board versus 0.50% for the
Member outside board member.
1.03%
Outside Board of Directors

Equity Granted to Join Board – Chair and Board Member
0.00% 0.50% 0.70%
Chairperson
0.48%
0.00% 0.20% 0.50%
Board
Member
0.40%
Board Composition by Financing Round

18% 17% 19% 16% 21%
33%
44%
52% 54% 50%
49%
39%
29% 30% 29%
0 or 1 2 3 4 5+
Outside Directors
Investors
Current/Former Employees
AAA
Wilmer Cutler Pickering Hale Ernst & Young LLP J. Robert Scott
and Dorr LLP 200 Clarendon Street 260 Franklin Street, Suite 620
60 State Street Boston, MA 02116 Boston, MA 02110
Boston, MA 02109 617.266.2000 617.563.2770
617.526.6000 www.eyonline.ey.com/growth www.j-robert-scott.com
1875 Pennsylvania Avenue, NW Ernst & Young’s worldwide Strategic Growth J. Robert Scott is a retainer-based executive
Washington, DC 20006 Markets Network is dedicated to serving the search firm specializing in the recruitment
202.663.6000 changing needs of rapid-growth companies. and selection of senior managers across a
www.wilmerhale.com For more than 30 years, we’ve helped many of broad range of selected industries. Founded
the world’s most dynamic and ambitious com- in 1986 as a wholly-owned subsidiary of
WilmerHale is internationally recognized for
panies grow into market leaders. Whether Fidelity Investments, the firm has developed
its experience in representing both venture-
working with international mid-cap companies a specialization in entrepreneurial oriented
backed companies and venture capital firms
or early stage venture-backed businesses, our technology businesses. Specialty vertical
in their initial public offerings, mergers and
professionals draw upon their extensive expe- practices include: Life Sciences, Information
acquisitions, intellectual property and intellec-
rience, insight and global resources to help Technology, Higher Education/Not-for-Profit
tual property litigation. As a leader in
your business achieve its potential. It’s how and Financial Services.
technology and life sciences, the firm repre-
Ernst & Young makes a difference.
sents clients in a wide variety of sectors J. Robert Scott provides a thorough, timely
including telecom and wireless, software, elec- Ernst & Young is a global leader in assurance, and proven process for locating and attracting
tronics, biotechnology, and medical devices. tax, transaction and advisory services. highly qualified candidates to fill key positions.
The firm’s full service practice also includes Worldwide, our 130,000 people are united by Our approach is client-oriented and distin-
antitrust and competition; aviation; bankruptcy; our shared values and an unwavering commit- guished by a commitment to service that is
civil and criminal trial and appellate litigation ment to quality. We make a difference by not only promised, but guaranteed. If you
(including white collar defense); communica- helping our people, our clients and our wider would like more information about J. Robert
tions; defense and national security; financial communities achieve potential. Scott’s services, please call or e-mail:
institutions; international arbitration; securi- For more information, please visit www.ey.com.
ties regulation, enforcement and litigation; Aaron Lapat
tax; and trade. Ernst & Young refers to the global organization Managing Director
of member firms of Ernst & Young Global 617.563.2770
The firm is more than 1,000 lawyers strong Limited, each of which is a separate legal entity. aaronl@j-robert-scott.com
and has offices in Beijing, Berlin, Boston, Ernst & Young Global Limited, a UK company
Brussels, Los Angeles, London, New York, limited by guarantee, does not provide services
Oxford, Palo Alto, Waltham and Washington, to clients.
DC. If you would like more information about
WilmerHale’s compensation and benefits Bryan Pearce
practice group, please call or email: Northeast Strategic Growth Markets Leader
617.585.0499
Kimberly B. Wethly bryan.pearce@ey.com
Partner, Tax Practice Group
617.526.6481 Joseph Muscat
kimberly.wethly@wilmerhale.com Director, Venture Capital Advisory Group
650.496.4517
joseph.muscat@ey.com
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2008 Startup Executive Compensation Survey

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2008 Compensation & Entrepreneurship Report in Information Technology

2008 Compensation and Entrepreneurship

About the Sponsors . . . . . . . . . . . . . . . . . . . . . . .67

Data in this report produced in collaboration with

We are pleased to present the 2008 edition of our Compensation and

Lastly, we would like to express our gratitude to Associate Professor Noam

Demographics of Respondent Population Financing Rounds

cross section of industry sectors, geographies and stages of 43

• The 2008 report provides aggregated results of the data as

percentage of organizations having raised three rounds. 102

• CTOs and CEOs were the most frequent founders of their

Headcount by Number of Full Time Employees

41-75 FTE range, 25% of respondents, up from 20% in 2007.

1-20 21-40 41-75 76+

California New Mid- Midwest West South

added in 2008 and drew 6% of the responding population.

Business Segment Company Revenue

RESULTS 2007 Base Salary 2008 Base Salary

Cash Compensation – 2007 and 2008 Total Cash Compensation

2008 bonus figures indicate at-plan target amounts.

a steady 4.7% rate from 2007 to 2008, repeating closely the

• Within prior year bonus figures, we have distinguished

• Overall bonus targets as a percentage of base salary did not

160 167 160 166 157 165 148 156

Bonus – 2007 and 2008 Company Age (Years)

90% 91% 90% 58

0-1 2-6 6-10 10+

Where Companies Locate Talent

Equity/Option Grants at Time of Hire Equity/Option Grants at Time

• Incentive Stock Options continue to be the most common

This figure is down significantly, however, from our 2007

• The combined 10 positions surveyed in this report hold on Equity Holdings

• The average CEO severance package is 7.4 months. The CEO,

Severance Packages (Median

6.00 6.00 6.00

Only Incentive Stock Options

Only Incentive Stock Options

Stock and Options

1.00 1.21 0.90 0.92 1.00 1.05

and Average in # of months) Executives with Severance Package

2007 Base Salary 2008 Base Salary

Organizational Structure by Financing Round Organizational Structure by Financing

190 197 180 191

Round (Founder and Non-Founder) Founder CEO – Equity by Financing Round

Head of Head of Head of Head of Head of

– Founders Founder President/COO – Equity by Financing Round

KEY: Median Average ≤1

2.00 3.00 6.00

Aaron: How was that different from a technology transfer

Clint: It was set up differently. It was set up as a private compa-

Clint: One of the things Steve wanted to do was to teach. So he

Clint: We learned to syndicate. We made mistakes and learned

Prior to joining J. Robert Scott, Aaron spent four years with a

Aaron: When did you come to Texas?

Clint: I came here in 2000. We continued to get bigger. Our sec-

Clint: These can be very uncomfortable conversations to have if

Aaron: I suppose standard vesting schedules on options can

Clint: Yes. This is an area where I’ve been spending a fair

Aaron: Instead, have you been tying vesting to performance

Clint: Yes. The accounting profession did us a bit of a favor in

Aaron: Because in the early stages, objectives are fluid?

Clint: They are very fluid. Sometimes technical milestones take

Aaron: So does that mean milestone based vesting just