The private company market in the San Francisco Bay Area (which includes Silicon Valley, San Francisco, North Bay/Marin and the East Bay/Oakland) has picked up steam since the beginning of the year and so have General Counsel opportunities. So many professionals and executives are curious as to what constitutes market compensation for this corporate legal executive. In today’s market “Silicon Valley” encompasses all of the Bay Area when it comes to benchmarking compensation. So the Silicon Valley startup General Counsel compensation is similar to his/her counterparts in the other Bay areas. Below are the numbers that apply to them all in today’s market…right now…at this minute.
Innovation and venture capital (“VC”) dominate the landscape in this geographic region and as a result, a private company is born every minute. This activity is having a direct influence on the legal employment market at all levels – as private company executives are fast appreciating the value of hiring legal talent sooner rather than later. This dynamic is particularly applicable to the hiring of a new General Counsel. So a robust number of opportunities exist in the private company sphere for this constituency. Compensation for this group will vary depending on the stage of a company’s life. Consequently, companies through a Series A round of funding will typically offer a comp package different than those mid to late stage companies that have been through a Series D or higher in the alphabet.
A company will often hire its first General Counsel in the mid to late stage of its life so for a General Counsel in a mid-sized, later/mid stage, private venture-backed technology company in the San Francisco Bay Area, “market” compensation is as follows:
Base Salary: $250,000 – $300,000
Over the last decade, base compensation for GCs in mid to late stage private companies has increased between 10%-20%. Of all the compensation knobs, this one has turned the most in a forward direction for candidates. Rarely will the number exceed $300k or fall below $250k at the offer stage.
It’s not an automatic, but today’s executives are using the signing bonus more often and more strategically to get their desired candidate over the line. So if they can’t…or won’t go higher on the base, target bonus or stock, they’ll sweeten the pot with a little more cash in the form of a signing bonus. And that usually does the trick. Most common numbers range from $15k – $30k.
Target Bonus: 0% – 50%
Target bonuses can be all over the map in private companies. It is not uncommon for a private company not to offer any target bonus or if they do, it’s fairly small. But inevitably over time – as the company grows and scales and needs to compete more effectively for talent (typically for top flight engineers), it will revamp its executive compensation and add or increase the bonus to 40% or 50%. So for those considering an opportunity with a non-existent or lackluster bonus, know that this will not be permanent and should not be a deal breaker unless you financially cannot swing a bonus void.
Stock Grant: .20% – .65% as a percentage of company value
The stock grant is often in the form of stock options (as opposed to RSUs). 7-10 years ago, the stock grant range was .40% – .75% with most grants settling in around .50%. Today, this number has decreased across the board and the current range is .25%-.65%. Of course there are outliers on the low and high end, but these are the typical percentages in today’s market. And these numbers are not uniform from company to company. Variables like company stage, funding amount, internal company compensation metrics, GC experience/seniority, value placed on the GC role etc. all come into play when determining the size of the stock grant.
Finally, it’s important to note that private companies have less flexibility on cash than they do with stock because internal comp grids often limit their ability to go materially higher than their stated range. So if you are negotiating an offer, keep this in mind and understand that there will likely be more movement on the stock with a possibility of a signing bonus than there will be on the base compensation.