Areas to consider in evaluating individual pay
Past accomplishments as CEO and/or Functional Leader of the company
Relevant, prior professional experience and track record
Skills, behaviors, attributes, and presentation
‘Keep the lights on’ cash needs
Compensation in the form of equity (i.e., stock grants, stock options, etc.)
Our executive compensation philosophy for emerging companies
Top management, especially CEOs, should be paid heavily in incentive compensation – a mix of longer term and short term incentive compensation
Lower base salary with the opportunity to achieve and exceed market pay in total compensation by meeting and exceeding goals and objectives
Goals should be aligned with investor/public expectations (if possible)
Objectives should be aligned with strategic initiatives
Compared to top management of ”comparable companies”
Size and revenue growth goals/history
Growth stage and liquidity horizon
We consider the background and successes of top management in comparable companies before making a comparative analysis
For example, many CEOs of emerging companies are also the founders of those companies.
This often makes a difference in the pay structure for that person as they often hold larger equity stakes.
Many of CEOs and top management of emerging companies have track records of success with other hyper‐growth organizations, many do not.
Obviously, it is important to consider this as CEOs and top management who have “been there and done that” command a higher compensation than those who are demonstrating their executive/top management talents for the first time.