A 2007 pre-IPO and private company total Compensation Survey indicates private companies continue to attract key technical and executive talent with aggressive pay packages.
It is common knowledge that high profile public companies like Google and VMware pay big bucks, but we see private companies - hungry for talent - shell out $160,000 for a top developer plus a big chunk of pre-IPO stock. The authors also noted in the release the number of private companies providing cash compensation to board members doubled in 2007, and the survey found a dramatic increase in the use of annual stock grants.
The survey found comprehensive health care benefits packages are also commonplace, and 90% of the companies are contributing to employee tax-deferred retirement plans.
Other key findings of the survey include:
- Aggregate employee ownership increased 10%, jumping from 15.13% to 16.64% of a company’s total shares outstanding.
- Stock options remained the dominant means of providing employees with equity, however, use of performance-based stock option grants doubled, now provided by 48% of the companies surveyed.
- Restricted stock, which is outright grants of stock to employees, saw a slight increase in prevalence, from 24% to 26%.
- CEO and executive pay also increased. The typical executive team now holds more than 8% of the company - a powerful incentive for top performers.
- The software industry showed the largest increase in overall employee ownership – jumping to 20% in 2007. Annual cash compensation showed a nearly identical leap.
Source(s): Syzygy Consulting Group