Recruiter: Startups Are Offering Crazy, 1999-Like Hiring Incentives - Such As A $1 Million Signing Bonus
Ursula Coyote / AMC
One particularly crazy story Stadler relayed to TechCrunch was about a near-IPO company that was willing to pay an executive-level candidate a $1 million signing bonus, and got turned down.
This year, a startup with revenues of $10 million wanted to find a new chief executive following its Series B raise and offered $450,000 in compensation (5% of revenues). Another startup, quickly growing and approaching an IPO, did a search for a CEO to lead it onto the public markets. In addition to a hefty compensation package, the board of the company is willing to put up a signing bonus of $1 million, to be delivered in two tranches over a year, for a vetted candidate willing to step up and sign the paperwork. Their offer is turned down.
Stadler says massive signing bonuses used to be rare but they're becoming a more common recruitment tactic among startups. Another stat he and TechCrunch dug up: "In the time period between 2013 and July 2014, salaries for CEOs increased by 11%, with chief financial officers and VP of Sales receiving a 14% and 13% increase in compensation respectively," TechCrunch writes. "Notably, the salaries of VPs of Engineering have been flat over the same period."
Large companies have seen some eye-popping payment packages while recruiting executives. Henrique de Castro, for example, was lured to Yahoo for a fleeting period by Marissa Mayer, who offered him a $62 million package over four years. The package was comprised of a $600,000 salary, $540,000 bonus, $36 million in stock awards, $1 million in cash, and $20 million more in stock. But 2 years later when de Castro left Yahoo, he walked away with about $109 million instead.
At a startup or pre-public company, a $1 million signing bonus may be another example of irresponsible, high burn rates, which have a number of investors concerned about the state of the industry.
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