Pardon me for asking this silly question. I’m one of the Cofounders and my CEO decided to hire a COO as we need to scale our operation.
This new COO will get quite a significant salary while I’m the CTO, who’s been with the company from the beginning will get the lowest salary among the c-level people in our company and the smallest amount of shares as well.
Is these situation fair?
Is it normal that for a Cofounder/CTO, who is the backbone for a tech company get lowest salary compared to other c-level guys?
When the cashflow is insufficient to pay all execs a market salary the CEO should take the lowest salary. So it’s possible the CEO is taking advantage of you.
no its not. boosting salary and shares to convince someone to join is common. Its way harder to convince a new guy/girl to join with lower salary than to convince one of the already loyal internal employees to accept a lower payment and balance a cash flow.
You are way more invested into this and has spent a significant amount of risk, time, passion & effort that makes it easier to “convince” you to accept your current situation. Don’t take it hard on yourself nor on the COO, if you were interviewing for a new company tomorrow, you’d negotiate as high as you could, the argument but our long lasting CMO is earning x won’t really pay your rent.
however :
– A fair compensation model if cash is low is higher share. If you’re earning 10 and COO is earning 15, then you should have 20 shares and she 5.
– Id reconsider working along with such a CEO that doesn’t really offer a fair compensation model, especially someone who doesn’t appreciate loyalty.
– Its also quite remarkable how a “Cofounder” has less shares than a newly hired employee.
That being said, if you are sure about the fact you’re the backbone of the company you should renogotiate your terms. There’s a lot of negotiation tactics for that, id strong advise against comparing yourself to the new hire, the “but he is that and im this..” puts you already in a bad box to start with. And in general people realise the importance of certain people once they’re gone, preparing plan Bs wouldn’t be dumb.
If they depend on you, ask for better salary/equity and you’ll get it. If not, find a better job. You don’t have much to lose. It is probably really easy to you to find it.
I was in your shoes some years ago when I joined the company I’m CTO today. I joined as an engineer, but it was just me, the tech chief was never there and delayed some critical milestones. I asked to be CTO without their interference, asked to better payment and everything worked fine after some fights. I’m younger than the CEO and he tried to convince me I deserved a lower wage because I wasn’t senior enough.
I think I did everything right, but looking to the past, I was prepared to jump the boat if they didn’t gave me what I wanted. I had great offers to leave. It’s easy to say it was the best choice to me, our startup is successful today, but I had to handle a lot to make it happen. The CEO is poisonous, tried a lot to reduce my role, but the board helped me a lot. If the problem is your CEO, think if you want to work with him before ask for more responsibility.
cto
3objectively
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