15 October 2024

Startup CEO Salaries Take a Dip

By Ronald Smith

Startup CEO Salaries Drop to 2019 Levels

Today I want to talk to you about some interesting news in the world of startup businesses. It turns out that the salaries of CEOs in these companies have decreased, dropping down to the levels we saw back in 2019!

Now, you might be wondering why this is happening. Well, the COVID-19 pandemic has had a major impact on businesses all around the globe. Many startups have been hit hard by the economic downturn caused by the pandemic, leading to a decrease in their revenue.

As a result, these companies have had to make some tough decisions to keep their businesses afloat. One of these decisions includes cutting back on executive salaries, particularly the salaries of CEOs. This is a way for startups to reduce costs and increase their chances of survival during these challenging times.

It’s important to note that this decrease in CEO salaries is not limited to any specific industry. Whether it’s technology, finance, or e-commerce, all types of startups are feeling the impact. The pandemic has truly created a difficult environment for businesses of all kinds.

So, what does this mean for startup CEOs? Well, it means that they are feeling the effects of the pandemic just like everyone else. They are making sacrifices and adjusting to the new normal in order to keep their companies running.

While this news may be disheartening for CEOs, it’s also a reflection of the resilience and adaptability of startup businesses. Despite the challenges they face, these companies are finding ways to navigate through the storm and survive.

As we look towards the future, it’s unclear when things will return to normal. But one thing is for sure – the startup world is no stranger to adversity. They have faced tough times before, and they will undoubtedly come out stronger on the other side.

So, let’s keep an eye on the world of startups and see how they continue to overcome obstacles and pave the way for innovation, even during these challenging times. And who knows, maybe someday you’ll be at the helm of one of these incredible companies!

Startup CEO Salaries Take a Dip

I’ve got some fascinating news to share with you. According to the latest info from Kruze Consulting, a top financial advisory firm for startup companies, the average salary of startup CEOs is back to what it was in 2019. Can you believe it?

So, here’s the deal: in 2023, the average salary of a startup CEO dropped to $142,000. Just last year, it was $150,000, and in 2021, it was $146,000. Why the dip? Well, it’s mainly because the capital markets are becoming stricter, and companies need to make their cash last longer. This means they have to be more mindful of how they spend their money, especially on executive salaries.

Investors, who pump money into these startups, are also putting pressure on the companies to be more cautious with their finances. They want to make sure the businesses they’ve invested in have a better chance of surviving and thriving. So, it’s not just about cutting costs – it’s about making smart decisions to keep the companies going.

But wait, there’s more! Despite the drop in average salary, the median salary of CEOs is actually going up! It’s defying what we’ve seen in the past. It’s like a little ray of sunshine in the midst of all these budget constraints.

You know, I’ve been hearing that the salaries of startup CEOs are going down lately, shared Healy Jones, the Vice President at Kruze Consulting. It’s all because there’s not enough money for startups to go around. Investors are telling founders to stretch out their funds as much as possible, and as a result, CEOs are making less and less money.

This change in salary trends reveals a split in the startup world. It seems like companies are falling into one of two groups. On one side, there are those who have to make big cuts in spending to keep their business going for as long as possible. On the other side, there are those who are making a lot of money and can afford to pay their CEOs more. Interestingly, a larger number of CEOs have decided not to take any salary at all this year, while there’s a growing group earning salaries between $150,000 and $200,000.

Guess what? Something interesting is happening amidst all these changes – the gender pay gap is starting to get smaller. It’s still there, but the difference in pay between male and female CEOs of startups is not as big as it used to be in the past. Back in 2019, male CEOs earned $5,000 more than female CEOs. But during the pandemic in 2020, this gap suddenly jumped to $45,000. Fortunately, it has been going down since then. In 2021, it was $16,000, in 2022, it reached $20,000, and in 2023, it came down to $14,000. So, things are moving in the right direction, albeit slowly. In 2023, on average, male startup CEOs made $145,000, while female startup CEOs earned $131,000.

It’s important to note that the gender pay gap is still a matter of concern, as pointed out by Jones. Even though the gap is getting smaller after the pandemic wreaked havoc, it’s still quite wide. We urge venture capitalists to examine the companies in their portfolio and ensure that female CEOs are being compensated fairly compared to their male counterparts.

I have some super interesting info for you. I gathered this data from more than 400 of Kruze’s super cool startup clients. They’re venture-funded and cover a bunch of different industries like biotech, SaaS, fintech, hardware, and more. Clients often ask about executive compensation, so I put this data together for them.

Now, these findings are important for small business owners like you and me. They show the importance of being smart with money and treating everyone equally when it comes to pay. They also remind us to make wise decisions that fit with what’s happening in the market. It’s becoming tougher to get funding, so we need to be strategic. Sure, reducing our salaries might be tough, but it’s all part of the journey to succeed in a competitive world and grow sustainably in the long run.