from DSSResources.com2007 executive compensation findings released at www.compstudy.comBOSTON, Nov. 27, 2007 -- J. Robert Scott, a leading retainer-based executive search firm; Ernst & Young, a global leader in professional services; and the internationally recognized law firm of WilmerHale; in collaboration with professors from Harvard Business School, have released data for their 2007 Compensation & Entrepreneurship Report in Information Technology, available at http://www.compstudy.com. This study is a valuable tool in helping businesses and executives understand today's ever-changing compensation trends for senior executives within private technology companies in the software, communications, hardware/semiconductors/electronics, IT services/consulting/system integration, and content/information providers market segments. "The results are noteworthy because this study specifically addresses compensation trends in private, venture-backed technology companies - information not readily available elsewhere," explains J. Robert Scott Managing Director Aaron Lapat. "The size and quality of the sample generates unrivalled executive level compensation data from emerging private technology companies." Five key findings were identified in this year's survey: 1. Executive Compensation: Average base salaries rose by 4.6% across the executive positions surveyed from 2006 to 2007, and executives earned approximately two-thirds of their target bonus in 2006. 2. Equity holdings: Average equity holdings for CEOs were 5.7% of total fully diluted equity. The combined average equity holdings for the CEO, CFO, CTO, head of engineering, head of sales and head of marketing was 11.82%, up from 10.86% in 2006. 3. Recruiting and Retention: As companies evolve from the early stage, with one or fewer rounds of funding, to becoming more mature companies with four or more rounds of funding, the number of Founders remaining in the CEO position declines dramatically from two-thirds to one-third. 4. Severance Packages: Approximately two-thirds of non-founding CEOs have some form of a severance package. Of those with severance packages, the average severance period is seven months, up from six months in last year's survey. Approximately 25 - 30% of the remaining team has a severance package. 5. Board Compensation: Very few private companies offer cash grants to board members. Typically, board members are granted between .25 to .5 percent of fully diluted equity to join the board. Very few outside board members of private companies receive cash compensation. Methodology The proprietary study of executive equity and cash compensation provides authoritative compensation data for ten top management positions, examining the evolution of executive pay as companies advance from start-ups to fully developed private enterprises. The study results provide essential information for businesses and investors to stay abreast of current trends in senior executive compensation and trends in organizational structures. Two hundred forty privately-held technology companies throughout the United States took part in the survey which includes data on more than 1,100 executives. The concentration of respondent companies are at the early to middle stages of development based on financing status, and 64% of respondents are from companies with less than $5 million in revenue. Fifty-three percent of respondents represent software companies. The study delved into the compensation and bonus equity packages of ten key executive positions: Chief Executive Officer, President/Chief Operating Officer, Chief Financial Officer, Chief Technology Officer, Heads of Engineering, Sales, Marketing, Business Development, Human Resources and Professional Services. Data is analyzed in aggregate with detailed views by position looking at: revenue, headcount, geography, business segment, and number of financing rounds raised. The number of financing rounds had the most profound impact on compensation trends while geography was the least statistically relevant. J. Robert Scott J. Robert Scott is a retainer-based executive search firm and a portfolio company of Devonshire Investors, which is wholly owned by Fidelity Investments. The firm specializes in recruiting senior level executives for a wide array of international companies in the technology, financial services, biomedical, biopharmaceutical and higher education/not for profit fields. J. Robert Scott is headquartered in Boston, Massachusetts with international offices in Hong Kong and Singapore. Additional information about the firm can be found at http://www.j-robert-scott.com. Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 130,000 people are united by our shared values and an unwavering commitment to quality. For more information, please visit http://www.ey.com. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. This news release has been issued by EYGM Limited, a member of the global Ernst & Young organization that also does not provide any services to clients. Wilmer Cutler Pickering Hale and Dorr LLP WilmerHale is recognized globally for its premier practices in antitrust and competition; aviation; bankruptcy; civil and criminal trial and appellate litigation (including white collar defense); communications; corporate (including public offerings, public company counseling, start-up companies, venture capital, mergers and acquisitions, and licensing); defense and national security; financial institutions; intellectual property counseling and litigation; international arbitration; life sciences; securities regulation, enforcement and litigation; tax; and trade. With a longstanding commitment to public service, WilmerHale is renowned as a leader in pro bono representation. The firm has more than 1,100 lawyers, and offices worldwide in Baltimore, Beijing, Berlin, Boston, Brussels, London, Los Angeles, New York, Oxford, Palo Alto, Waltham and Washington. For more information, please visit our website at http://www.wilmerhale.com. SOURCE J. Robert Scott |