Tech executive salaries stagnated in 2009

For possibly the first time ever, tech executive compensation seeing a dip

Financial trends and news by Ronny Kerr
December 1, 2009 | Comments
Short URL: http://vator.tv/n/c1d

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tech executive salariesWe may have yet another sign that this recession beat up the technology sector a little more than the last recession did in 2001 and 2002.

The base salaries of non-founder U.S. tech executives grew by a measly .8% between 2008 and 2009, according to this year's CompStudy, a huge difference from the 4.7% change seen between 2007 and 2008. Likewise, the tiny growth in tech executive pay looks even more dramatically small when compared with the 3.2% spurt seen in the salaries of executives working in the life sciences sector.

Led by executive search firm J. Robert Scott and Ernst & Young with additional guidance lent from the Harvard Business School, the annual CompStudy only analyzes trends in private companies which usually raise funds via venture capitalists. The companies do not have to report compensation values in the way that publicly traded businesses do.

Remarkably, the drop in pay marked by this year's CompStudy reveals that things didn't even get this bad for executives in the major recession that kicked off the decade.

"The most striking theme here is that in tech, compensation is flat to down,” said Aaron Lapat, a managing director at J. Robert Scott in Boston. “For the ten years we’ve been doing this, compensation has never been down in tech, even in 2001 and 2002."

Combining these two bits of knowledge, that non-tech sectors saw much better results over the past year and that even tech in the earlier part of the decade fared better, we paint a pretty grim picture for IT in the United States this year. While costs were hard for everybody, small and young tech businesses likely struggled especially, trying to find the right place for the right funds.


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