Case Study

Startup CEO Remuneration Research

17.03.2022

Client: A blockchain technology startup involved in the banking sector. This project was conducted in partnership with an executive search firm.

Project Trigger

The client was moving into the next stage of growth and was looking to hire for a CEO role to lead the organization.

Our Scope

  • Market research of startup CEO remuneration across online sources, compiling of data points and research, modelling and presenting a proposed remuneration structure which fits the startup’s requirements, size and growth.

Project Outcomes

  • Provided a proposed remuneration structure comprising of a mix of Cash Incentives, Short Term Incentives (STIs) and Long Term Incentives (LTIs).
  • Forecasted the potential value of LTIs (Equities) across multiple valuation scenarios.
  • Compared remuneration structure across similar companies, and the potential total remuneration value across a set of larger, matured companies to ensure incentives are attractive for the high growth startup.

Our Value

  • Active Direction’s research and recommendation allowed the Board to make an informed decision on the remuneration structure, minimizing the risk of overpaying while having potential returns that are attractive to a high profile candidate.

Top 3 Tips

Things to consider in an executive remuneration structure:

  • The current remuneration structure should consider the current / short-term organisation size.
  • Expected growth rate (and how much influence the executive have on growth) is the next consideration, and LTIs are an attractive method of providing executives the level of remuneration representative of the potential growth rate while reducing the risk of overpaying if the growth is not achieved.
  • STIs and LTIs should be influenced by factors under the control of the executive and be in line with the goal of maximizing shareholder wealth