Executive Suite Salaries Remain Stagnant According to Technology Executives Roundtable Survey

ATLANTA, June 15, 2016 – Executive-suite salaries are largely unchanged or slightly lower than previous years, with CEO and president positions averaging the highest salaries among senior positions according to the Technology Executives Roundtable (TER) 2016 Atlanta Technology Executive Compensation Survey.

With the release of its seventh annual Atlanta Technology Executive Compensation Survey, TER, an association of Georgia-based CEOs, CFOs and general managers, is providing a unique service to its members and to the Georgia technology community at large. The study was underwritten by Arketi Group; ExecuLinks; Frazier & Deeter; Morris, Manning & Martin; Pritchard & Jerden; Silicon Valley Bank; and Wm. Leonard & Co.

“Over the years, we’ve seen executive concerns change based on economic status and legislative changes. One example is the sudden shift in 2013 around the effects of Obamacare,” said Eric Christ, president of Technology Executives Roundtable. “While salary averages have either softened marginally or remain unchanged, executives today are faced with new technology and security challenges while balancing other topics of interest including compensations, bonuses, equity bonuses and health care as they grow their business.“

Overall, the survey found the average salary among technology executive teams ranged from $186,000 for CEO and $202,396 for president, to $89,250 for most senior HR executive.

The CEO and president positions consistently command the highest average salaries in the executive suite, followed by CFO, CTO and COO. As in prior years, average salaries of most senior Engineering/Development, Business Development, Sales, and Marketing executive are within the $125,000 to $155,000 range.

The survey also found almost three quarters (71 percent) of companies participating reported revenue growth in 2015 with 37 percent of companies growing by more than 25 percent. A small number of survey participants (9 percent) saw a decline in revenue, which remains consistent throughout the past seven years the survey has been conducted. Higher than previous years, one-fifth of companies reported their revenues were unchanged.

Bonus Potential

With regard to bonus compensation, the study found target bonus potential has decreased from previous years for technology executives in 2015. This ranges from an average high of $75,000 for CEO to $12,424 for most-senior HR executive. Of this available 2015 bonus compensation, the averages actually paid were $46,834 for CEO, $49,852 for president, $29,165 for COO down to $9,822 for HR.

Commission potential for Sales Executive averaged $66,806 at 100 percent of goal and $22,541 of goal for Business Development Executive.

Compensation Plans for 2016

For 2016, two out of three companies surveyed (64 percent) plan to increase base compensation. A careful analysis of individual company plans, however, reveals more than half (54 percent) of those planning an increase will raise compensation 5 percent or less, while only 3 percent will raise compensation by 25 percent or more. Companies not planning an increase went up slightly to 36 percent from last year’s 32 percent, perhaps indicating plateaued perceptions regarding business and the economy.

Executive Equity

In addition to base and bonus compensation, the survey provides information on equity ownership. For example, the study found significant differences in non-founders equity ownership between CEOs, presidents, and other executives. On average, CEOs were granted 13.3 percent, presidents 3.2 percent and COOs 2.9 percent of non-founders equity ownership. The remainder of the executive team held non-founders equity on average as follows:

• CFO: 3 percent
• CTO: 2.1 percent
• Most senior engineering/development: 1.5 percent  
• Most senior business development: 1.2 percent  
• Most senior sales executive: 1 percent  
• Most senior marketing: .5 percent
• Most senior HR: .2 percent

Additional findings regarding stock options included:

• CEOs currently hold the largest percentage of the overall total stock option pool at 12 percent, followed by presidents (8.1 percent) and COOs (6.8 percent). The remaining senior executives average between 2 and 5 percent of the overall option pool, excluding senior HR executives at less than 1 percent. In comparison to prior years, these numbers are down across all positions.
• Vesting periods ranged from one to six years, with four years being the most common vesting period – two-thirds of respondents stated that their vesting period was four years. After that, one-quarter of firms had a three-year vesting period. And 10 percent reported two years or less is required to vest stock options.

Healthcare rates continue to rise

Last year, the majority of companies reported the Patient Protection and Affordable Care Act had had only a minor impact on their healthcare plans and premiums, while this year, only 38 percent said the same. One-third (35 percent) of companies reported that their rates had increased, while 25 percent said they had changed their programs to mitigate rate increases – and one in three of those (6 percent of total) reported making “significant” changes.

A fortunate one percent of companies stated their healthcare rates had decreased. Several respondents noted that they had switched carriers or adjusted deductibles in order to keep costs down, and a number commented that they expected rates to increase significantly next year.

The survey is available exclusively to TER members and clients of TER survey sponsors. For more information on TER, visit www.ter-atlanta.com.

About the 2016 Atlanta Technology Executive Compensation Survey

The study was designed to identify executive compensation and company ownership among Greater Atlanta technology companies during calendar year 2015. Overall, 68 percent of the companies participating in the study described themselves as developers of software/SaaS; other respondents were providers of online services 12 percent, technology consultants and other professional service firms 8 percent, hardware developers 4 percent, and others 6  percent. Almost half (47 percent) of the companies had private funding; 18 percent were

funded by angel investment, 12 percent by venture capital, and 11 percent by private

equity. Thirty-five percent of companies reported more than one source of funding. Three percent were publicly traded. Almost two-thirds (65 percent) of the companies surveyed had been in business longer than five years. The majority (87 percent) reported less than $25 million in revenue, with 35 percent under $2 million and 31 percent between $2 and 10 million. Only 7 percent of responding companies had revenues had more than $50 million in revenue.