AngeBlog by Basil Peters

Director Compensation Survey

In the fall of 2006, Basil Peters started a survey of angel investors, entrepreneurs and directors to gather recent data on angel backed company director compensations. The initial request for data went to almost 400 people.

This started out as part of a series of articles in The Angel Journal. It then became an active topic of conversation at the boards he was on and in the companies he was considering investing in. As the survey gathered momentum, it generated a great deal of interest. This should not have been surprising considering how fast this area is changing and how important good boards are today.

This survey is going to continue - at least for the foreseeable future. If you have some recent data on director compensation in early to mid stage companies that you would be willing to contribute, as part of putting something back into our community, please add a comment.

Please let us know if the information you are sending is public or confidential - it will be treated accordingly.

The data on the Director Compensation page is a summary of the survey results and will be updated periodically as new data becomes available.

Bifurcated data and observations from the survey

The compensation data was bifurcated in two ways by whether the boards were engaged and by whether the boards had recently tried to recruit new outside directors.

Director Compensation Survey Bifurcation

Engaged Boards

A surprising number of respondents described boards that received very little compensation. In these cases, the boards were not usually 'engaged' - as surprising as that is at the beginning of the 21st century. These boards met six, or fewer, times per year and continuing to operate more like boards did in the past.

Boards that have recruited recently

Among the active, engage boards, the data was again bifurcated by whether the boards had recently recruited for good, independent directors. Director compensation has increased dramatically over the past three to four years. Boards that had not had to recruit had often not yet updated their board comp plan. This is the data which is summarized on Director Compensation.

Venture Backed Boards

Another distinct subset was companies that were funded by traditional venture capital firms. The norm in those situations is to have a board that is typically the CEO and individuals from the venture funds. Traditional venture partners do not accept board compensation, either cash or equity. This model is fair because those VC partners usually have cash compensations in the several hundred thousand dollar per year range and significant equity upside from their funds carried interest.

Comparison to Other Surveys and Data

The results of this survey correlate well to the small amount of other data available.