How Startup Founders Earn Before The EXIT
Yes, most sensible founders do not take all the money raised to pay themselves, LinkedIn News reports. Of course, they work to create value, knowing that exit is what matters.
While much is known — and criticized — about CEO compensation, what founders pay themselves remains largely a mystery. A report compiled by startup accounting firm Pilot, however, has a surprising reveal: Relative to high-flying executives, founder pay can be modest. Of the 500 included in the report, almost half pay themselves less than $100,000 a year. While these founders may be holding out for an initial public offering or company sale — or prefer to spend the money on hiring employees, for example — they, too, require financial security to perform well, says Pilot. What employees earn:
- CEOs in the S&P 500 earned a median $14.5 million last year — more than double their compensation in 2012, according to The Wall Street Journal.
- The federal minimum wage remained flat over the same period — at $7.25 per hour — while median weekly earnings for salaried employees rose 36%, notes Inc.