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Management Equity Compensation Benchmarks

Tug-O-War

I'm often asked by entrepreneurs for equity compensation benchmarks.  They want to know how much equity they should give a COO, a VP or a CEO.  Understanding these numbers is important for sizing an option pool and important for creating compensation plans for new members of the team.

Wilson Sonsini Goodrich & Rosati, a venture law firm, recently published the results of a study on the typical equity compensation packages for key managers after a Series A investment.  These numbers provide pretty useful guidance not only for compensation at the time of the Series A, but also for compensation at the Seed or Series B round as these metrics can be adjusted for likely dilution to back into a benchmark for equity at the Seed stage or otherwise.

It is worth noting that these numbers are not the end-all be-all for equity compensation.  They might fluctuate as market dynamics change and may not be representative of the entire market.  That said, they should provide entrepreneurs with some directional guidance.

Management Equity Compensation Benchmarks

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