It’s too early to know the full impact of the economic meltdown on executive compensation at private technology and life sciences companies. Alas, 2008—or at least the first three fiscal quarters of it—could be viewed next year as the end of the good old days of executive compensation.
Still, for those of you who want to know how much your executive peers’ at said private tech and life sciences companies were compensated this year (or at least the pre-meltdown part of the year), your cup runneth over with the recently completed 2008 Compensation and Entrepreneurship Report in Life Sciences and a similarly titled report in information technology. The annual studies—conducted by the J. Robert Scott executive search agency, law firm WilmerHale, Ernst & Young, and academics at Harvard Business School [disclosure: the first two are Xconomy underwriters]—showed a continued trend that Bob noted last year of steady growth in executive compensation across the board in both life sciences (which in this post means medical devices too) and technology. And an interesting feature of the technology compensation study is the inclusion of clean technology companies for the first time. (Read on to see how their pay compared with executives in other segments of the tech industry. A hint: not great.)
Xconomy isn’t big on covering studies, because many lack the depth to draw serious conclusions, but these compensation studies appear to be quite thorough. The reports are based on compensation data from multiple private companies (342 from tech and 189 from life sciences), with a wide swath of executives (1,600 executives with 10 different job titles on the tech side, and 1,000 executives with 13 job classifications in life sciences). And all U.S. regions are accounted for—so our communities of readers in Boston, San Diego, and Seattle can see where they stack up next to each other (again, see our chart of the results on the next page). Also, the figures were gathered from April to June 2008.
I don’t want to touch the argument on whether electrical engineering courses are more difficult than microbiology, but the studies show that life sciences CEOs typically earn more than their tech counterparts, with average 2008 base salaries of $300,000 for top life sciences executives, up 6.7 percent from $281,000 in 2007, and $236K for the tech chief executives, a 4.2-percent increase from $227K last year. Though not explicit in these reports, perhaps it should be noted that the smaller size of the life sciences industry compared with IT, and the high degree of scientific/technological variation among life sciences firms, could make this compensation gap between the two camps a matter of supply and demand. I’m just speculating, though.
