According to new Kruze Consulting research, CEO wages are dropping, the gender pay gap is narrowing, and the difference between successful and surviving firms is widening.
SAN FRANCISCO, May 24, 2023 – Kruze Consulting, a major CPA and finance consulting firm for VC-backed firms, has disclosed new salary data for startup CEOs. In 2023, the average startup CEO compensation is $142,000, a decrease from $150,000 in 2022 and $146,000 in 2021, and a return to the level of 2019. The reduction is ascribed to more constrained capital markets and the need to extend cash runways as a result.
It is significant to note that despite the enormous spread of the pandemic, the salary gap between male and female startup CEOs is narrowing but still substantial. Men and women in CEO positions differed by $5,000 in 2019, and that differential rose to $45,000 in 2020 during the pandemic. This differential shrank to a $16,000 spread in 2021 and to a $20,000 spread in 2022. The gap between male and female company CEOs has somewhat narrowed this year to $14,000, according to data. In comparison to their female colleagues, CEOs made an average of $131,000 this year compared to $145,000 for men.
Furthermore, a significant departure from historical practice was seen as the median wage rose even while the average salary fell. A tale of two worlds currently exists in the startup sector. Startups fall into one of two categories: those that need to drastically cut spending to expand runway or those who are producing enough income to support significant increases in CEO compensation. Since the beginning of 2023, a higher-than-average proportion of CEOs have earned nothing, although the proportion of those earning salaries between $150,000 and $200,000 is rising.
“Declining startup CEO salaries are a result of the limited cash available to companies. According to Healy Jones, Vice President of Kruze Consulting, “Investors have been urging entrepreneurs to extend runways as much as possible, resulting in lowering pay. “Despite the tremendous pandemic spread, the pay difference is still large. We continue to advise VCs to examine their whole portfolio and ensure that the compensation of the women who operate their businesses is comparable to that of their male counterparts.
The information comes from more than 400 of Kruze Consulting’s more than 800 venture-backed startup customers, ranging from seed to series-b funded firms in a variety of sectors, including hardware, software as a service, biotechnology, and other verticals. Since one of the most frequent inquiries Kruze gets from their clients is about what executive salary should be, they pull this data yearly.
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Overview of Kruze Consulting
Over 800+ firms in Silicon Valley, Los Angeles, New York, and other important startup hubs benefit from Kruze’s Startup CFO Consulting services. Market-leading Saas, software, eCommerce, eHealth, and FinTech firms make up Kruze’s clientele, who have raised over $12 billion in venture financing to date. The firm, which deals with all things related to accounting, tax, finance, and HR, was founded in 2012 by Big Four alumna and startup controller Vanessa Kruze. The experts at Kruze can efficiently manage everything, including interim CFO Consulting, financial modeling, startup tax returns, venture debt consulting, 409A valuations, bookkeeping, AR/AP, and Seed/Series A/B Fundraising Preparation.