Executive Compensation: Insights from the 2013 CompStudy Survey, Life Sciences & Healthcare Edition
Explores the CompStudy as well as:
- Current Founder’s Dilemmas research
- 2013 survey – company profiles
- Summary compensation data
- CEO compensation review
- Hot topics and current trends
3. Today’s
presenters
Bruce Booth
Glen Giovannetti
Atlas Ventures
Partner
EY
Global Life Sciences
Sector Leader
Rosemary Reilly
Noam Wasserman
WilmerHale
Partner
Erik R. Lundh
Park Square
Managing Partner
Kimberly Wethly
Harvard Business School WilmerHale
Associate Professor,
Partner
Tukman Faculty Fellow
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 3
4. Today’s
agenda
•
CompStudy overview
•
Current Founder’s Dilemmas research
•
2013 survey – company profiles
•
Summary compensation data
•
CEO compensation review
•
Hot topics and current trends
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 4
5. CompStudy
Overview
CompStudy.com
• All reporting now done on our online, fully interactive
platform, located at CompStudy.com.
• Participants in the annual survey receive free,
year-long access to the reports. Access is also available for
purchase.
• New features for 2013:
New options for filtering the data,
including company valuation,
profitability, CEO experience, and
more
Enhanced Board of Directors
reporting
Additional printable summarylevel charts
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 5
6. CompStudy
Overview
Technology Survey
2000
2013
211 cos.
550 cos.
The CompStudy.com Survey
Data collected in every survey includes:
• Cash compensation and equity
• Founding team
• Financing history
• Company size
Life Sciences Survey
• Products/revenue
2002
• Equity programs
168 cos.
2013
256 cos.
• Executive backgrounds
• Board of directors
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 6
7. Today’s
agenda
•
CompStudy overview
•
Current Founder’s Dilemmas research
•
2013 survey – company profiles
•
Summary compensation data
•
CEO compensation review
•
Hot topics and current trends
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 7
18. •
•
•
•
•
Detailed table of contents
Chapter 1
Self-assessment survey
“When to Leap” video
Other awesome stuff
NoamWasserman.com
19. Audience
Poll
What is your company’s outlook
on the economy over the next
12-18 months:
A. Things are good and getting better
B. Still receiving mixed signals from the market
C. Growing increasingly concerned about a
downturn
Webinar poll results:
A. 44%
B. 47%
C. 9%
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 19
20. Today’s
agenda
•
CompStudy overview
•
Current Founder’s Dilemmas research
•
2013 survey – company profiles
•
Summary compensation data
•
CEO compensation review
•
Hot topics and current trends
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 20
21. 2013 Survey – Company Profiles
Institutional rounds raised
Headcount
Later stage companies are betterrepresented in this year’s survey; 82% of the
companies surveyed have raised 2+ rounds
of financing, compared to 78% in 2012.
Respondent company headcounts were slightly
larger than in 2012, though the distribution is
fairly close.
% respondents in this range
% respondents in this range
Number of rounds
Number of full time employees
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 21
22. 2013 Survey – Company Profiles
Geography
% respondents in this range
Revenue
Business Segments
% respondents in this range
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 22
23. 2013 Survey – Company Profiles
Founder status - % of role held by founders vs. non-founders
Participants had essentially the same founder/non-founder split by position profile as in 2012
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 23
24. Audience
Poll
What change do you anticipate for
base salaries next year?
A. Decrease
B. No change
C. Increase up to 5%
D. Increase between 5% and 10%
E. Increase more than 10%
Webinar poll results:
A. 1%
B. 17%
C. 70%
Presented by Park Square, WilmerHale and EY
D. 9%
E. 3%
www.compstudy.com | 24
25. Today’s
agenda
•
CompStudy overview
•
Current Founder’s Dilemmas research
•
2013 survey – company profiles
•
Summary compensation data
•
CEO compensation review
•
Hot topics and current trends
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 25
26. Compensation data
Founder cash compensation
*Fewer positions shown due to lack of founders in certain roles
Founder CEO salaries were
up slightly less than their
non-founder peers: 0.9% vs
1.42%
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 26
27. Compensation data
Founder current equity holdings, as % of fully diluted shares
*Fewer positions shown due to lack of founders in certain roles
On the average, founders of life sciences companies hold significantly less equity than their
technology peers – largely due to the more capital-intensive nature of most life sciences
start-ups.
% equity owned, fully diluted
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 27
28. CompStudy Overview
Percentage growth in year-over-year non-founder total target cash compensation
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 28
29. Compensation data
Cash compensation – non-founders, 2012 and 2013
Non-founder total target cash compensation was up 3% in 2013, down slightly from the 3.5% rate of
increase between 2011 and 2012.
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 29
30. Compensation data
Bonus as a percentage of base salaries – non-founders
On average in 2012, non-founder executives received 67.8% of their target bonuses, up slightly from
65.5% in 2011.
% of base salary
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 30
31. Compensation data
Equity holdings – non-founder executives
Current equity - % of fully diluted shares
Equity at hire - % of fully diluted shares
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 31
32. Audience
Poll
What percentage of the equity in your
company is reserved for management,
directors and employees?
A. Less than 10%
B. 11 – 15%
C. 16 – 20%
D. 21 – 25%
E. More than 25%
Webinar poll results:
A. 29%
B. 36%
C. 20%
Presented by Park Square, WilmerHale and EY
D. 5%
E. 9%
www.compstudy.com | 32
33. Compensation data
Equity holdings – type of equity vehicles used
% of equity grants given by vehicle type
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 33
34. Compensation data
Percentage of non-founder executives eligible for severance
67.3% of non-founder CEOs surveyed had some sort of severance package, down from the
survey’s historical average of 73%.
No other position exceeded 50% participation.
% eligible for severance
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 34
35. Compensation data
Length of severance packages granted (months)
As the median numbers suggest, the length of nearly every severance package granted is a
multiple of three months
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 35
36. Today’s
agenda
•
CompStudy overview
•
Current Founder’s Dilemmas research
•
2013 survey – company profiles
•
Summary compensation data
•
CEO compensation review
•
Hot topics and current trends
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 36
37. CEO compensation review
Non-founder CEO base (1,000s USD)
CEO salaries are more highly correlated with company headcount, as evidenced in the chart above by
the large gap in pay between CEOs at 1-20 FTE companies and CEOs at 21-40 FTE companies
By number of financing rounds raised
By number of full time employees
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 37
38. CEO compensation review
Non-founder CEO current equity (% of fully diluted shares)
Headcount is a slightly better predictor of non-founder CEO equity; there is a lot of variability in the
data when sliced by financing status. This is partly attributable to difference between therapeutics
companies and all others in the survey; more filters can be applied at CompStudy.com
By number of financing rounds raised
By number of full time employees
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 38
39. Today’s
agenda
•
CompStudy overview
•
Current Founder’s Dilemmas research
•
2013 survey – company profiles
•
Summary compensation data
•
CEO compensation review
•
Hot topics and current trends
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 39
40. Hot topics
and current
trends
• Recruiting and retaining top talent in
an increasingly competitive market
- Founder transitions
- Recruiting dynamics
- Retention issues
• Compensation differences between earlier
and later stage companies
• Alternatives to dilutive equity issuances
• 409A Valuations
• Compensation in a holding company model
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 40
41. Recap
•
1-minute recap from each panelist
Presented by Park Square, WilmerHale and EY
www.compstudy.com | 41