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A recently released report stated tech salaries remained flat with the previous year for the first time in 10 years. However despite stalled growth in salaries in the tech field, venture capitalists remain bullish on the sector.
Released by the executive search firm J. Robert Scott and Ernst & Young LLP, the report showed that average base salaries for the 500 surveyed private technology firms came to $231,000 in 2009 as compared to $230,000 the year before. This is in marked contrast to the average five percent growth among tech CEO pay seen over the past decade, said J. Robert Scott managing director Aaron Lapat.
Bonuses were down from 2007 to 2008 as the technology CEOs received 64 percent of their target bonus in 2008 for an average of $61,000. This represented a six percent decrease in total bonus compensation over the previous year.
By comparison, a group of 200 CEOs from emerging life sciences firms averaged a base salary of $273,000 in 2009, up 3.2 percent from 2008. However these CEOs experienced a sharp decrease in bonuses, a 73 percent decrease from 2007 to 2008 to 44 percent of target bonus, or an average of $48,000.
However, not is all doom and gloom for the technology industry when it comes to venture capital. Despite the flat compensation outlook, venture capitalists still consider the sector a good deal overall. “These executive compensation results reflect the greater focus on capital efficiency and company performance that is especially important in current economic conditions – but for entrepreneurs and venture capital investors there remain many opportunities to form and grow a business because quality talent is currently available at very competitive compensation levels,” said Bryan Pearce, Ernst & Young LLP, Americas Director, Venture Capital Advisory Group.
Indeed, another recent survey finds venture capitalists are increasingly bullish about venture capital in general and Internet technology in particular. According to the survey conducted by the Framingham, Massachusetts-based Polachi Inc., a strong 77 percent majority of venture capitalists feel better about the industry today than they did a year ago.
While others in the financial sector have been pulling back due to continued bad news from Wall Street, many venture capital companies have recently been adding staff in anticipation of increased work and strong growth through the rest of 2011. Fully 93 percent of surveyed venture capital company companies plan to hire during the second half of the year, while 54 percent claim to be “excited” about their exit markets.
Unsurprisingly, tech remains a hot commodity for these venture capital companies. A clear majority of the respondents cited Internet and Web 2.0 companies as attractive investments in the coming months. A great deal of interest in technology-heavy locales such as Silicon Valley in northern California remains as well.
