The Cost of a Full-time CEO
By Bob Norton

Lets look at the cost of a typical experienced CEO today at a small to medium size business:

  Low Average
Salary Range: $175,000 $500,000

Bonus Range:

$ 50,000 $250,000
Other costs & benefits $ 15,000 $ 50,000
Equity/Options 10%-100% 5%+
Total Cash Cost Range: $240,000 $800,000

NOTES: The average figure above may be skewed high by larger companies so we have included a lower average for smaller companies that reflect the CEO in an early stage company that they are a founder of and may have 20% to 100% equity ownership. Figures below do not reflect the high equity component for earlier stage companies. The real cost of equity must be considered also. Given the risk reward ratio needed to compensate equity percentages must be high just like those for early stage investors (VCs target a 40%+ ROI/year).

Another Source For Technology Based Companies:

1999 CEO Compensation Package
Average salary for a public Internet retail CEO: $213,075
Average salary for FORTUNE 100 CEO: $1.1 Million
Average bonus for a public Internet retail CEO: $420,000
Average bonus for a FORTUNE 100 CEO: $1.5 Million

Average options for a public Internet retail CEO: $5.7 Million
Average options for a FORTUNE 100 CEO: $27.1 Million

(Source: Jericho Communications, Inc. August 5, 2000.)

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