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Average Equity Grant to CFO's at PE/VC Portfolio Company's

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cfo equity grantDoes anyone have any average PE/VC industry statistics of the equity grant to CFO's at Portfolio Company's? I have heard common range is 1-5% with the average hovering around 1-2% and 5%  being on the very high end. Interested if anyone has any insight on those figures or knows of data sources that track those sorts of statistics. Thanks.

Answers

Bryan Frey
Title: VP Finance/Corp Controller
Company:
(VP Finance/Corp Controller, ) |

1-2% is most common for series A companies. A few years back I was given some very detailed info from a VC that showed, for non-founders, the average grant was 1.25%. I don't know what their source was for the data, but every VC I have ever worked with has data from some comp firm along these lines. 5% would be for very early stage rock star additions. Almost unheard of unless they are simply core to the whole company. Besides that, 1-2%

Joe Roth
Title: COO / CFO
Company: South Shore Millwork
(COO / CFO, South Shore Millwork) |

Having worked in several equity-backed companies, the answer falls into 2 categories: 1) Grants of stock in the form of options or SARs that vest over time and 2) purchase of stock that have performance-based vesting privileges. In the first case, the average range is between 1% and 2% for the CFO, double that for the CEO. In the second case you are asked to invest along with the equity partners and share their risk. In that case, the award is usually higher, in the range of 5% to 8%. Performance incentives are usually more generous, in some cases allowing a doubling of the equity percentage. Another benefit that arises from risking your own money by purchasing shares is the opportunity to have the gain on exit treated as a capital gain as opposed to ordinary income. In any situation, competent tax and legal advice should be taken.

Topic Expert
Joan Varrone
Title: CFO
Company: Cloud Cruiser
LinkedIn Profile
(CFO, Cloud Cruiser) |

I have found the grants to be between 1 to 1.5% depending on the stage of the company. And the CEO is generally 5% plus

Vinod Keni
Title: Director/Partner
Company: Peachtree Management Advisors/Aquarian G..
(Director/Partner, Peachtree Management Advisors/Aquarian Group LLC) |

Are these grants straight equity grants or options that vest? I have been in situations where I have seen typically 1-2% and an additional amount being granted every year based on milestones being achieved. But the annual grant is pretty small - less than 1%.

In Asia, where I am a consulting CFO, I have noticed that this is something that is pretty difficult, and the concept is just taking root now.

Bryan Frey
Title: VP Finance/Corp Controller
Company:
(VP Finance/Corp Controller, ) |

Definitely option grants with a vesting schedule. If you are granting actual shares then the grant structure is very different, as are the tax ramifications for the recipient.

George Schaefer
Title: CFO
Company: Soltage, LLC
(CFO, Soltage, LLC) |

I can confirm the other posts here.

Over the past five years have worked for three start up companies backed by PE/VC firms, I joined after the A or just after the B round and have received 1-1.5% of the company, vesting over 3-4 years. The PE/VC firms included Kleiner Perkins; DE Shaw; Kholsa Ventures; American Capital and other first tier firms,so I am confident these are competitive levels.

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