CEO Compensation for a Startup


For a startup that currently has no funding and wants to put a business team in place, how much equity would you give someone who would be coming on board as the CEO to take over the business side of things, and who will then be receiving a salary once funding is found.

Then after they come on board, should they become vested over time, even if they end up walking away before the company becomes funded. Should they feel like they deserve percentages for time served regardless?

I always thought that if you set aside a portion for a CEO, and then they put in time, but end up walking away, why would they keep their percentage, when you then have to go find a new CEO?


asked Sep 11 '11 at 02:41
16 points

2 Answers


It's common in a closely held startup for key employees to get stock in the company, and for the company to have the option to buy back the stock at fair market value if the employee leaves for any reason. The fair market value can be determined by the company or by predetermined formula.

answered Sep 11 '11 at 09:52
652 points


You should read this post: Forming a new software startup, how do I allocate ownership fairly? It covers many of the questions you will (or already) have about issuing equity to employees, including a CEO. It really is a well written piece, with some very insightful comments by other users.

answered Sep 11 '11 at 12:21
1,194 points

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