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Peter Thiel: Startup CEO Salaries Shouldn’t Be Above $150,000

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Re: Peter Thiel: Startup CEO Salaries Shouldn’t Be Above $150,000

#11

Post by wtvanhest »

philwelch wrote: post #8
larrys wrote: post #5

"...Thiel believes that a CEO should not be paying themselves more than $150,000, even after a Series A investment. Anything above that shows a lack of motivation to the company and to the future success of the company." Anything above? Really? This assumes a few things. First that the cost of living is the same for any CEO. A CEO at a startup in NYC or SV has considerably higher cost of living than a CEO located in…

Most people with kids and mortgages get by on less than 150k. If you really can't make ends meet on 150k you've overextended yourself.

Yes, but they have 9 to 5, low stress jobs. I want the CEO of a company I work for/invest in etc. to be focused on the business, not saving.

I want them to feel good about their personal expenses so they can focus on the business.

Re: Peter Thiel: Startup CEO Salaries Shouldn’t Be Above $150,000

#12

Post by larrys »

philwelch wrote: post #8
larrys wrote: post #5

"...Thiel believes that a CEO should not be paying themselves more than $150,000, even after a Series A investment. Anything above that shows a lack of motivation to the company and to the future success of the company." Anything above? Really? This assumes a few things. First that the cost of living is the same for any CEO. A CEO at a startup in NYC or SV has considerably higher cost of living than a CEO located in…

Most people with kids and mortgages get by on less than 150k. If you really can't make ends meet on 150k you've overextended yourself.

What if they have a few kids in college? Even a public college can cost, what, $35,000 these days if out of state? What if they want to do a startup but they already have kids in private college? Sorry kids, I want to do a startup please switch to the instate public college.

My point is simply that there are other circumstances and picking an absolute number seems to be biased toward younger people with no obligations.

Re: Peter Thiel: Startup CEO Salaries Shouldn’t Be Above $150,000

#14

Post by larrys »

lpolovets wrote: post #4

I don't understand the example of Reid Hoffman taking a $15k salary as CEO of LinkedIn. IIRC, Reid was pretty well off from from being a very early PayPal employee and board member. When you have $X million in the bank (X >> 1), do you even care if you make $15k or $100k or $250k per year?

I agree it's window dressing and almost meaningless to me. Steve Jobs taking a $1? So what? He has money already and is trading that for future upside. And actually for the thrill of making his vision a success. My guess is that for many people (and especially Jobs) he could be paid $4 million and that wouldn't change his commitment to Apple.

Re: Peter Thiel: Startup CEO Salaries Shouldn’t Be Above $150,000

#16

Post by earl »

philwelch wrote: post #8
larrys wrote: post #5

"...Thiel believes that a CEO should not be paying themselves more than $150,000, even after a Series A investment. Anything above that shows a lack of motivation to the company and to the future success of the company." Anything above? Really? This assumes a few things. First that the cost of living is the same for any CEO. A CEO at a startup in NYC or SV has considerably higher cost of living than a CEO located in…

Most people with kids and mortgages get by on less than 150k. If you really can't make ends meet on 150k you've overextended yourself.

Not in sf or nyc.

a low end (not dumpy, but definitely not high end with a doorman) 2 bed apartment is going to run you $650k in the decent bits of sf and more in nyc.

In sf, you end up paying approx $1100 per month per million dollars of value in property taxes. So $715 in taxes, $300 or so in insurance, a $2500 mortgage, and you can easily be spending $3500-$4k/mo (after taxes) on housing. Using the rough rule of thumb that your salary should be 40 times your monthly housing payment, that's $160K already.

It isn't hard if you're an adult, with a family, or housing obligations, or kids, etc. If you wish to restrict the universe of ceos to relatively recent college grads with no life obligations who are content to pay $1500 to share a crappy apartment, then maybe Thiel is being reasonable.

Re: Peter Thiel: Startup CEO Salaries Shouldn’t Be Above $150,000

#17

Post by kposehn »

Ehhh, $150k is a rather broad generalization.

I'd say that a startup CEO shouldn't make more than mid/senior level engineers. This allows food to be put on the table and some decent quality of life, while not sucking cash away at the expense of growth.

At the same time, if you're capable of not taking a salary at all, I think it is wise.

Re: Peter Thiel: Startup CEO Salaries Shouldn’t Be Above $150,000

#18

Post by 1123581321 »

The CEO's salary should be the amount that maximizes the startup's chances of succeeding.

For a young/single or independently wealthy founder that's as close to zero as possible.

For a founder with family (like me) that's the lowest amount that puts all concern about supporting his/her children out of mind, so the CEO can focus. That number can really range.

Re: Peter Thiel: Startup CEO Salaries Shouldn’t Be Above $150,000

#19

Post by _delirium »

earl wrote: post #16
philwelch wrote: post #8

Earlier quoted context omitted.

Most people with kids and mortgages get by on less than 150k. If you really can't make ends meet on 150k you've overextended yourself.

Not in sf or nyc. a low end (not dumpy, but definitely not high end with a doorman) 2 bed apartment is going to run you $650k in the decent bits of sf and more in nyc. In sf, you end up paying approx $1100 per month per million dollars of value in property taxes. So $715 in taxes, $300 or so in insurance, a $2500 mortgage, and you can easily be spending $3500-$4k/mo (after taxes) on housing. Using the rough rule of t…

>> Most people with kids and mortgages get by on less than 150k.

> Not in sf or nyc.

It's still trivially true that most people in SF and NYC, including married adults with families, get by on way less than $150k. Even Upper-East-Side Manhattan, one of the wealthiest zip codes in the U.S., has average incomes "only" in the high 5 figures. Maybe there is a small section of Nob Hill where $150k incomes are normal, but even in most nice parts of SF that's not a typical family's income.

Part of the reason is that in areas where housing is the major cost, the 40x-your-housing-cost rule of thumb is too conservative, and would lead to a conclusion that almost nobody can actually live in the city, whereas clearly many people do. And anyway I believe the usual mortgage-company rules of thumb are 30% of your gross income on the mortgage payment itself, but up to 40% on mortgage+insurance+etc. So that'd lead to $120k in your hypothetical.

Re: Peter Thiel: Startup CEO Salaries Shouldn’t Be Above $150,000

#20

Post by vaksel »

larrys wrote: post #5

"...Thiel believes that a CEO should not be paying themselves more than $150,000, even after a Series A investment. Anything above that shows a lack of motivation to the company and to the future success of the company." Anything above? Really? This assumes a few things. First that the cost of living is the same for any CEO. A CEO at a startup in NYC or SV has considerably higher cost of living than a CEO located in…

yeah

you'd think they'd want the CEO to be able to 100% focus on their startup

If for example the CEO's wife lost her job...$150K is suddenly not that much for a family. Do you really want your CEO to do consulting on the side to pay the bills instead of focusing on the startup?

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