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Parksquare - 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare - November 2013

Parksquare - 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare - November 2013

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    Parksquare - 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare - November 2013 Parksquare - 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare - November 2013 Document Transcript

    • A SERVICE FROM PARK SQUARE EXECUTIVE SEARCH Abbreviated Edition life sciences & healthcare 2013 Special Access Code cs2013LS Visit www.compstudy.com and register to receive full access Sponsored By: www.compstudy.com © Copyright 1999-2013, Park Square Executive Search LLC. All Rights Reserved
    • 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare Founder Compensation and Sponsor Information TABLE OF CONTENTS Letter to the Industry Demographics 3 On behalf of Park Square Executive Search, EY, WilmerHale, and Professor Noam USD 1,000’s Cash Compensation Wasserman of Harvard Business School, I’d like to welcome to the 2013 edition of our $350 annual Compensation and Entrepreneurship Report in Life Sciences & Healthcare. $300 Equity and Severance CEO Compensation by Headcount 4 5 Founder Cash Compensation This report—our fourteenth annual and largest to date—includes summaries and analysis of compensation data collected from executives at more than 250 private 6 Founder Compensation and Sponsor Information 7 companies from across the country in therapeutics, devices, tools/instrumentation, $250 34.9 and other industries. The survey data for this edition were collected between May and August of 2013. 17 $100 This survey responds to our clients’ continuing need for better access to reliable, comparable compensation data to assist them in the critical decisions involved in 240.6 19.3 24 63.4 83.8 19.5 29.6 36.9 9.3 16.3 248.4 257.5 182.8 206.6 191.3 26 51.9 26.3 64.8 30.8 35.3 6 $0 18.5 205.4 192.8 164.7 199.5 174.6 164.7 180.8 152.3 CEO Head of Finance/CFO 2012 Base Salary Head of Bus Dev/CBO Head of Clinical Research 2012 Bonus Received 47.8 260 $50 attracting, motivating and retaining key executives at private companies. We are able to present correlations between executive compensation and a number 72 34.5 19 $200 $150 28 87.5 57 Head of Regulatory Affairs 2012 Unachieved Bonus Research & Develop/CSC Head of Platform Tech/CTO 2013 Base Salary 148.7 Head of Engineering 2013 Target Bonus of variables, including: financing stage, company size both in terms of product stage and headcount, founder/non-founder status, industry segment and geography. We also provide a number of analytics on Board of Directors compensation and makeup, company equity plans, and a look at how organizations develop as they raise Founder Total Cash Founder Equity Holdings • Founder CEO salaries were up slightly less than their nonfounder peers: 0.9% vs 1.42%. • On the average, founders of life sciences companies hold significantly less equity than their technology peers – largely due to the more capital-intensive nature of most life sciences start-ups. additional financing. This summary document provides only high level excerpts from the detailed analysis available on-line at www.compstudy.com. Complete access to the data is available free of charge to survey participants and is also available as a paid subscription. Sponsor Information Thanks for reading, Park Square Executive Search is a retainer-based executive search firm located in Cambridge, Massachusetts and in Menlo Park, California. Park Square serves clients and institutions that are changing the world through discovery, innovation, and growth. Erik Lundh Managing Partner Park Square Executive Search www.parksquare.com EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. WilmerHale offers unparalleled legal representation across a comprehensive range of practice areas that are critical to the success of our clients. We practice at the very top of the legal profession and offer a cutting-edge blend of capabilities that enables us to handle deals and cases of any size and complexity. www.wilmerhale.com www.ey.com # www.compstudy.com | www.parksquare.com www.compstudy.com | www.parksquare.com # 7
    • 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare Demographics When controlling for other variables, headcount has proven to be the best predictor of non-founder cash compensation. Equity holdings tend to be most strongly correlated with the number of financing rounds a company has raised. This survey of executive compensation in privately held life sciences and healthcare companies was conducted between May and August of 2013. The questionnaire resulted in over 250 companies participating with data from over 2,000 executives in a wide cross section of industry sectors, geographies and stages of development. Base Salary: By Number of Full-time Employees Geography $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 Equity: By Number of Full-time Employees Financing Rounds Raised % respondents in this range 7% % Fully Diluted Shares 1,000’s USD CEO Compensation by Headcount 25th 50th Mean 75th 1–20 FTEs 230 300 280.6 338 21–40 FTEs 300 353 333 41+ FTEs 275 330 330 % respondents in this range 6% 25 5% 12.5 4% California 27.7 9.8 3% New England Mid Atlantic 2% Midwest 14.1 1% 0% 30 West 25th 50th Mean 75th 1–20 FTEs 3.7 4.3 4.9 6 382 21–40 FTEs 3.9 4.8 4.6 41+ FTEs 2.8 4.5 4.2 5 15 25.2 20.5 10 5 17.3 14.2 14.6 8.3 5.4 375 26.6 9.4 20 South 0 0 1 2 3 4 5 or more The geographic distribution in 2013 closely mirrors venture capital funding trends, and the universe of private companies at large. The companies in this year’s survey are at roughly the same stage as in last year’s survey, when measured by the number of financing rounds raised. Business Segment Headcount by Number of Full-Time Employees Slice this data yourself at www.compstudy.com % respondents in this range 42.6 6.1 11.7 Therapeutics Devices Tools/Instrumentation Other 39.6 Medical device companies made up a proportionally larger amount of this year’s sample, up to 40% from 35% last year. 80 70 60 50 40 30 20 10 0 % respondents in this range 44.9 18.8 1–20 21–40 14.4 22 41–75 76+ Respondent company headcounts were distributed similarly to those in the 2012 survey, with a slightly higher percentage of large companies this year. Screenshot of online reporting tool 6 # www.compstudy.com | www.parksquare.com www.compstudy.com | www.parksquare.com # 3
    • 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare Cash Compensation Equity and Severance This data compares 2013 compensation data with compensation data for 2012 non-founding executives. 2012 figures are represented with both actual bonus received and total unachieved target bonus for the year. 2013 bonus figures indicate at-plan target amounts. More granular analysis can be found online at www.compstudy.com. The CompStudy survey also contains detailed questions around non-cash executive compensation and benefits. The 2013 online reports show base, bonus, equity at hire, current equity, and severance for each executive role. More granular analysis can be found online at www.compstudy.com. Total Cash Compensation: Non-Founders Equity Holdings USD 1,000’s % equity owned, fully diluted $500 5 34 $400 124 87 22.3 $300 4 21 16 16 22 34 $200 303 54 34 65 47 5 29 191 198 203 207 220 63 11.8 12 24 23 50 195 231 235 232 3 73 55 49 37 11.6 306 $100 20 42 64 201 4 37 183 60 45 189 32 9 4.5 36 44 2 181 184 17 4.6 1 244 235 173 179 172 193 2 0.9 $0 CEO Head of Head of Head of Finance/CFO Bus Dev/CBO Clin Research 2012 Base Salary Head of Reg Affairs 2012 Bonus Received Research & Develop/CSC COO 2012 Unachieved Bonus Head of Head of Platform Tech/CTO Eng Head of Marketing 2013 Base Salary Head of MFG/Ops 0 CEO 1 0.9 1 1 0.8 0.5 Head of Head of Head of Finance/CFO Bus Dev/CBO Clin Research 1 0.7 Head of Reg Affairs 2013 Target Bonus 2.2 1.9 1.3 1.2 Research & Develop/CSC 2013 Median COO 0.9 1.1 Head of Head of Platform Tech/CTO Eng 0.7 1 Head of Marketing 0.5 0.8 Head of MFG/Ops 2013 Mean • These equity figures are averages covering companies across the maturity and fundraising spectrum. • On average in 2012, non-founder executives received 67.8% of their target bonuses, up slightly from 65.5% in 2011. Bonus as a Percentage of Base Salary • Earlier-stage non-founder executives do tend to have more equity, but dilution effects tend to level off after the second round of financing has been raised. • As the chart below illustrates, only CEOs consistently received any severance package. • Non-founder total target cash compensation was up 3% in 2013, down slightly the 3.5% rate of increase between 2011 and 2012. • Nearly all severance packages are granted in three-month increments. The median length of severance for CEOs is six months. For all other positions it is three months. Severance Eligibility % of base salary % eligible for severance 40% 35% 30% 80 70 10.5 46.3 17 20% 15% 6.4 15.8 25.4 22.8 11.6 19.4 16.8 23.3 22.5 23 17.5 18.5 13.6 40 31.4 28.3 26.7 19.8 4.4 2.5 12.1 5% 20.2 22.8 18.4 22.5 11.9 30 Head of Head of Head of Finance/CFO Bus Dev/CBO Clin Research Head of Reg Affairs Research & Develop/CSC 17 67.3 44.2 20 39.7 COO Head of Head of Platform Tech/CTO Eng 2012 Unachieved Bonus Head of Marketing Head of MFG/Ops 45.3 41 48.9 34.6 25.6 10 0 CEO 2012 Bonus Received # 4 50 8.4 2.9 28.7 27 10% 0% 10.9 60 6.2 6.4 25% CEO Head of Head of Head of Finance/CFO Bus Dev/CBO Clin Research Head of Reg Affairs Research & Develop/CSC COO 28.9 Head of Head of Platform Tech/CTO Eng 33.3 Head of Marketing 30.4 Head of MFG/Ops 2013 Target Bonus www.compstudy.com | www.parksquare.com www.compstudy.com | www.parksquare.com # 5
    • 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare Cash Compensation Equity and Severance This data compares 2013 compensation data with compensation data for 2012 non-founding executives. 2012 figures are represented with both actual bonus received and total unachieved target bonus for the year. 2013 bonus figures indicate at-plan target amounts. More granular analysis can be found online at www.compstudy.com. The CompStudy survey also contains detailed questions around non-cash executive compensation and benefits. The 2013 online reports show base, bonus, equity at hire, current equity, and severance for each executive role. More granular analysis can be found online at www.compstudy.com. Total Cash Compensation: Non-Founders Equity Holdings USD 1,000’s % equity owned, fully diluted $500 5 34 $400 124 87 22.3 $300 4 21 16 16 22 34 $200 303 54 34 65 47 5 29 191 198 203 207 220 63 11.8 12 24 23 50 195 231 235 232 3 73 55 49 37 11.6 306 $100 20 42 64 201 4 37 183 60 45 189 32 9 4.5 36 44 2 181 184 17 4.6 1 244 235 173 179 172 193 2 0.9 $0 CEO Head of Head of Head of Finance/CFO Bus Dev/CBO Clin Research 2012 Base Salary Head of Reg Affairs 2012 Bonus Received Research & Develop/CSC COO 2012 Unachieved Bonus Head of Head of Platform Tech/CTO Eng Head of Marketing 2013 Base Salary Head of MFG/Ops 0 CEO 1 0.9 1 1 0.8 0.5 Head of Head of Head of Finance/CFO Bus Dev/CBO Clin Research 1 0.7 Head of Reg Affairs 2013 Target Bonus 2.2 1.9 1.3 1.2 Research & Develop/CSC 2013 Median COO 0.9 1.1 Head of Head of Platform Tech/CTO Eng 0.7 1 Head of Marketing 0.5 0.8 Head of MFG/Ops 2013 Mean • These equity figures are averages covering companies across the maturity and fundraising spectrum. • On average in 2012, non-founder executives received 67.8% of their target bonuses, up slightly from 65.5% in 2011. Bonus as a Percentage of Base Salary • Earlier-stage non-founder executives do tend to have more equity, but dilution effects tend to level off after the second round of financing has been raised. • As the chart below illustrates, only CEOs consistently received any severance package. • Non-founder total target cash compensation was up 3% in 2013, down slightly the 3.5% rate of increase between 2011 and 2012. • Nearly all severance packages are granted in three-month increments. The median length of severance for CEOs is six months. For all other positions it is three months. Severance Eligibility % of base salary % eligible for severance 40% 35% 30% 80 70 10.5 46.3 17 20% 15% 6.4 15.8 25.4 22.8 11.6 19.4 16.8 23.3 22.5 23 17.5 18.5 13.6 40 31.4 28.3 26.7 19.8 4.4 2.5 12.1 5% 20.2 22.8 18.4 22.5 11.9 30 Head of Head of Head of Finance/CFO Bus Dev/CBO Clin Research Head of Reg Affairs Research & Develop/CSC 17 67.3 44.2 20 39.7 COO Head of Head of Platform Tech/CTO Eng 2012 Unachieved Bonus Head of Marketing Head of MFG/Ops 45.3 41 48.9 34.6 25.6 10 0 CEO 2012 Bonus Received # 4 50 8.4 2.9 28.7 27 10% 0% 10.9 60 6.2 6.4 25% CEO Head of Head of Head of Finance/CFO Bus Dev/CBO Clin Research Head of Reg Affairs Research & Develop/CSC COO 28.9 Head of Head of Platform Tech/CTO Eng 33.3 Head of Marketing 30.4 Head of MFG/Ops 2013 Target Bonus www.compstudy.com | www.parksquare.com www.compstudy.com | www.parksquare.com # 5
    • 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare Demographics When controlling for other variables, headcount has proven to be the best predictor of non-founder cash compensation. Equity holdings tend to be most strongly correlated with the number of financing rounds a company has raised. This survey of executive compensation in privately held life sciences and healthcare companies was conducted between May and August of 2013. The questionnaire resulted in over 250 companies participating with data from over 2,000 executives in a wide cross section of industry sectors, geographies and stages of development. Base Salary: By Number of Full-time Employees Geography $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 Equity: By Number of Full-time Employees Financing Rounds Raised % respondents in this range 7% % Fully Diluted Shares 1,000’s USD CEO Compensation by Headcount 25th 50th Mean 75th 1–20 FTEs 230 300 280.6 338 21–40 FTEs 300 353 333 41+ FTEs 275 330 330 % respondents in this range 6% 25 5% 12.5 4% California 27.7 9.8 3% New England Mid Atlantic 2% Midwest 14.1 1% 0% 30 West 25th 50th Mean 75th 1–20 FTEs 3.7 4.3 4.9 6 382 21–40 FTEs 3.9 4.8 4.6 41+ FTEs 2.8 4.5 4.2 5 15 25.2 20.5 10 5 17.3 14.2 14.6 8.3 5.4 375 26.6 9.4 20 South 0 0 1 2 3 4 5 or more The geographic distribution in 2013 closely mirrors venture capital funding trends, and the universe of private companies at large. The companies in this year’s survey are at roughly the same stage as in last year’s survey, when measured by the number of financing rounds raised. Business Segment Headcount by Number of Full-Time Employees Slice this data yourself at www.compstudy.com % respondents in this range 42.6 6.1 11.7 Therapeutics Devices Tools/Instrumentation Other 39.6 Medical device companies made up a proportionally larger amount of this year’s sample, up to 40% from 35% last year. 80 70 60 50 40 30 20 10 0 % respondents in this range 44.9 18.8 1–20 21–40 14.4 22 41–75 76+ Respondent company headcounts were distributed similarly to those in the 2012 survey, with a slightly higher percentage of large companies this year. Screenshot of online reporting tool 6 # www.compstudy.com | www.parksquare.com www.compstudy.com | www.parksquare.com # 3
    • 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare 2013 Compensation & Entrepreneurship Report in Life Sciences & Healthcare Founder Compensation and Sponsor Information TABLE OF CONTENTS Letter to the Industry Demographics 3 On behalf of Park Square Executive Search, EY, WilmerHale, and Professor Noam USD 1,000’s Cash Compensation Wasserman of Harvard Business School, I’d like to welcome to the 2013 edition of our $350 annual Compensation and Entrepreneurship Report in Life Sciences & Healthcare. $300 Equity and Severance CEO Compensation by Headcount 4 5 Founder Cash Compensation This report—our fourteenth annual and largest to date—includes summaries and analysis of compensation data collected from executives at more than 250 private 6 Founder Compensation and Sponsor Information 7 companies from across the country in therapeutics, devices, tools/instrumentation, $250 34.9 and other industries. The survey data for this edition were collected between May and August of 2013. 17 $100 This survey responds to our clients’ continuing need for better access to reliable, comparable compensation data to assist them in the critical decisions involved in 240.6 19.3 24 63.4 83.8 19.5 29.6 36.9 9.3 16.3 248.4 257.5 182.8 206.6 191.3 26 51.9 26.3 64.8 30.8 35.3 6 $0 18.5 205.4 192.8 164.7 199.5 174.6 164.7 180.8 152.3 CEO Head of Finance/CFO 2012 Base Salary Head of Bus Dev/CBO Head of Clinical Research 2012 Bonus Received 47.8 260 $50 attracting, motivating and retaining key executives at private companies. We are able to present correlations between executive compensation and a number 72 34.5 19 $200 $150 28 87.5 57 Head of Regulatory Affairs 2012 Unachieved Bonus Research & Develop/CSC Head of Platform Tech/CTO 2013 Base Salary 148.7 Head of Engineering 2013 Target Bonus of variables, including: financing stage, company size both in terms of product stage and headcount, founder/non-founder status, industry segment and geography. We also provide a number of analytics on Board of Directors compensation and makeup, company equity plans, and a look at how organizations develop as they raise Founder Total Cash Founder Equity Holdings • Founder CEO salaries were up slightly less than their nonfounder peers: 0.9% vs 1.42%. • On the average, founders of life sciences companies hold significantly less equity than their technology peers – largely due to the more capital-intensive nature of most life sciences start-ups. additional financing. This summary document provides only high level excerpts from the detailed analysis available on-line at www.compstudy.com. Complete access to the data is available free of charge to survey participants and is also available as a paid subscription. Sponsor Information Thanks for reading, Park Square Executive Search is a retainer-based executive search firm located in Cambridge, Massachusetts and in Menlo Park, California. Park Square serves clients and institutions that are changing the world through discovery, innovation, and growth. Erik Lundh Managing Partner Park Square Executive Search www.parksquare.com EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. WilmerHale offers unparalleled legal representation across a comprehensive range of practice areas that are critical to the success of our clients. We practice at the very top of the legal profession and offer a cutting-edge blend of capabilities that enables us to handle deals and cases of any size and complexity. www.wilmerhale.com www.ey.com # www.compstudy.com | www.parksquare.com www.compstudy.com | www.parksquare.com # 7
    • A SERVICE FROM PARK SQUARE EXECUTIVE SEARCH Abbreviated Edition life sciences & healthcare 2013 Special Access Code cs2013LS Visit www.compstudy.com and register to receive full access Sponsored By: www.compstudy.com © Copyright 1999-2013, Park Square Executive Search LLC. All Rights Reserved