What is the average CEO salary by company size?

by | Published on Feb 23, 2023 | Last Updated on Jan 25, 2024 | Compensation

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CEO Salary

What does a CEO do?

A Chief Executive Officer (CEO) is the most senior executive in an organization, responsible for making strategic decisions to drive the growth and profitability of the business.

Chief Executives oversee day-to-day operations, create short and long-term goals, motivate teams, and manage resources.

In addition to providing vision and direction for the organization, Chief Executives are also responsible for making tough decisions and tackling problems.

Related: The Best Executive Compensation Consulting Guide

Why good leadership matters

Regardless of the size of the organization, it is important to remember that good leadership matters. CEOs are responsible for setting the tone and vision of an organization.

The job of Chief Executive often requires an advanced degree and one must be capable of making tough decisions. They must also be able to inspire, motivate, and lead their teams effectively to succeed.

The right CEO can make a huge difference in how successful an organization is, whether you look at privately held companies or publicly traded companies.

Therefore, the median pay of a CEO should take into account the individual’s qualifications, experience, and abilities. Ultimately, the value of a good CEO can be worth its weight in gold to an organization.

Executive Pay Explained

Executive pay is the total cash compensation paid to executives of a business. This type of pay typically includes a mix of salary, bonuses, stock options, and other benefits such as a car or housing allowance.

Executive pay has come under intense scrutiny in recent years due to concerns that it is often excessive and out of line with the performance of the organization. It is important to understand how this type of compensation works and the factors that affect it to ensure that compensation is fair.

The salary for a CEO can vary significantly depending on the size of the firm or organization. Data shows that small companies tend to pay less, while large organizations may offer higher salaries and more benefits.

Additionally, pay for executives should be determined based on the individual’s qualifications, experience, and job performance in motivating and leading teams. Organizations need to ensure that the executive pay is fair and in line with the performance of the organization.

Related: Who are the top salary benchmarking companies and get the latest information about CEO salaries.

How Much Does a CEO Make in Small, Medium, and Large Companies?

Data shows that the size of an organization or firm determines the salary range for the vast majority of CEOs.

According to data from the Bureau of Labor Statistics, the average salary for a CEO in 2019 was $183,270 per year with the salary in small companies generally lower than in larger organizations.

Key findings from a 2019 Bureau of Labor Statistics study showed that in 2019 the salary for CEOs at small companies was around $80,000 to $100,000 per year.

This figure is significantly lower than that of more established and larger organizations, which may pay their CEOs up to $250,000 or more annually.

Mid-size companies usually pay between $150,000 and $200,000 per year. CEO total compensation packages may also include bonuses and stock options that can significantly impact their overall earnings.

Average Total Cash Compensation

Total cash compensation is a term used to describe the overall pay package that executives of a business or other organization receive. This type of pay typically includes salary, bonuses, stock awards, and other benefits such as car or housing allowances.

Total cash compensation is an important factor in determining the value of an executive and is often based on the size of the business and the individual’s qualifications, experience, and abilities.

The Impact of the Financing Environment on CEO Compensation

The data shows that the financing environment can have a major impact on the compensation of CEOs.

Generally speaking, when the economy is strong and there is ample access to capital, businesses tend to be more generous with executive salaries and bonuses.

This means that CEOs in industries or sectors that are doing well may receive higher compensation than those in other areas. On the other hand, the data shows that when the economy is weak, revenue is down, or capital access is tight, businesses may need to reduce executive compensation to remain profitable.

Overall, data shows that the size of an organization and the financing environment are two major factors that can affect CEO pay. A smaller company or firm usually has lower salaries than large organizations, while strong economic conditions, like increased revenue, can lead to higher payouts for executives.

Additionally, individual qualifications and achievements can also play a role in determining executive salaries. It is important to understand these factors so that executive pay can remain fair and equitable.

How much do CEOs of startups earn?

A startup CEO can typically earn a salary ranging from $80,000 to $250,000 per year.

However, this figure can vary significantly depending on the size and success of the startup CEO employer. The amount of venture capital a business receives also plays a role.

The total compensation package of a startup CEO may also include bonuses and stock awards that can significantly impact their overall earnings.

In some cases, startup CEOs may be offered long-term incentives as part of their compensation package.

Different industries of CEO’s and their average pay

Tech Industry

CEOs of tech companies typically earn an average salary ranging from $150,000 to $250,000 per year.

However, this figure can vary significantly depending on the size, revenue, and overall success of the business.

CEO total compensation packages may also include bonuses and long-term incentive plans that can significantly impact their overall earnings.

In some cases, tech CEOs may be offered large equity stakes in the company as part of their compensation package.

Retail Industry

CEOs of retail companies typically earn an average salary ranging from $150,000 to $200,000 per year. However, this figure can vary significantly from other industries depending on the size and success of the company.

CEO total compensation packages may also include bonuses and options to purchase shares of the company that can significantly impact their overall earnings.

In some cases, retail CEOs may be offered large equity stakes in the company as part of their long-term incentive package.

Real Estate Industry

CEOs of real estate companies typically earn an average salary ranging from $200,000 to $400,000 per year.

Real estate compensation for CEOs can vary significantly depending on the size and success of the company.

CEO total compensation packages may also include bonuses and stock options that can significantly impact their overall earnings.

In some cases, real estate CEOs may be offered large equity stakes in the company as part of their compensation package.

Financial Services Industry

CEOs of financial services companies typically earn an average salary ranging from $200,000 to $500,000 per year.

However, this figure can vary significantly depending on the size and success of the company.

CEO total compensation packages may also include bonuses and stock options that can significantly impact their overall earnings.

In some cases, financial services CEOs may be offered large equity stakes in the company as part of their compensation package.

What is the average CEO salary by company size: 2020?

The average CEO salary by the size of the company in 2020 varied widely depending on the type of company and its financial situation at the time.

Generally speaking, larger companies tended to have higher pay for their CEOs than smaller ones, with those at the helm of Fortune 500 companies earning significantly more than their counterparts working as startup CEOs.

For instance, according to a 2020 report, CEOs of large public companies earned an average salary of $1.6 million in 2020, while those at midsize firms averaged about $890,000, and CEOs of smaller private companies earned an average of around $630,000.

What is the average Chief Executive salary: 2021?

The average CEO salary by the size of the company and c-suite salaries by company size in 2021 was higher than the average of the prior year.

According to a 2021 report, CEOs of large public companies saw major increases in executive compensation and earned an average base salary of $2 million in 2021.

Those at midsize firms averaged a base salary of about $1.15 million, and CEOs of smaller companies earned an average base salary of around $850,000.

2022 Startup CEO Salary Report

In 2022, the average startup CEO base salary by company size varied widely depending on the type of company and its financial situation.

CEOs of large public companies saw major salary increases from the prior year and earned a higher pay average of $2.3 million in 2022.

Those at midsize firms averaged about $1.4 million and CEOs of smaller private companies earned an average of around $1 million.

How Did the Covid Pandemic Affect CEO pay?

The Covid pandemic had a significant and far-reaching impact on CEO salaries and executive pay in 2020.

As the pandemic spread across the globe, most companies were forced to cut costs and restructure operations to remain viable and keep up with changing customer demands.

This meant that many companies, especially those in industries like hospitality, travel, and retail, had to lay off employees and reduce the salaries of those remaining.

In many cases, companies needed to reduce the salaries of their top executives to remain financially stable. In some instances, CEOs even took pay cuts or reduced their bonuses.

Although this may have been a difficult decision for many businesses, it did help maintain an acceptable level of company financials during the pandemic.

As we look forward to 2023-2027, we can expect to see further increases in CEO salaries as the economy continues to recover from the COVID-19 pandemic.

As companies reach new levels of growth and profitability, CEOs will be rewarded with higher salary packages, including compensation practices that reflect the company’s success.

CEO Salary: Men vs Women

The gender pay gap for female CEOs persisted through 2021, with male CEOs earning on average 24.1 percent more than what their female counterparts were paid.

This disparity highlights the systemic inequality that still exists in many industries, despite progress being made in terms of diversity and inclusion.

The unequal compensation is a direct result of factors like unconscious bias, gender stereotyping, and discrimination, which can all contribute to lower salaries, and incentive plans, for female CEOs.

Overall, CEO salaries remain incredibly high – and this is something to keep an eye on as governments strive to reduce inequality and ensure fair pay for all.

How to Close the Gender Pay Gap

Closing the gender pay gap is an important and achievable goal that requires commitment from both employers and employees.

Employers should ensure that their recruitment and promotion processes are merit-based, eliminating any potential for bias or discrimination.

As well as implementing progressive policies and fair pay structures, it’s also important that businesses take responsibility for ensuring their corporate governance structures are equitable and transparent.

By doing so, they can take a step towards closing the gender pay gap and ensuring more female leaders across all levels of management.

The country with the Highest Chief Executive Wages is…

The United States tops the list of countries with the highest CEO pay as of 2021.

CEOs in the US earned an average salary of $2.3 million in 2022, with those at large public companies earning significantly more than their counterparts at smaller firms.

This high level of compensation is due to the large and highly competitive market in the US.

The top percent of CEO compensation varies by state and the top five states with the highest-paid CEOs are California, New York, Texas, Illinois, and Massachusetts.

California

With an average salary of $2.5 million, California tops the list of states with the highest CEO salaries in 2021.

Important factors leading to the high salaries include the state’s strong economy and large, competitive market, especially in Silicon Valley.

Companies in California compensate their CEOs handsomely and provide lucrative long-term incentives to remain competitive and retain top talent.

New York

The Big Apple is home to some of the world’s most influential businesses, and it comes as no surprise that CEOs here earn one of the highest salaries at an average of $2.3 million per annum.

The high salaries are because New York is home to numerous Fortune 500 companies, and pay levels often include lucrative incentive plans to retain top talent.

Texas

Thanks to its booming tech industry, corporate headquarters located in major cities like Dallas and Houston have helped bring up the state’s numbers when it comes to executive compensation.

The top executives in the Lone Star State saw $1.8 million on average here in 2021 with long-term incentives often included in their compensation packages.

Illinois

The Prairie State has seen a noticeable uptick in executive compensation over recent years – today, CEOs here are taking home an estimated $1.7 million each year according to a report from last year (2022).

Massachusetts

Rounding off our list is Massachusetts where top executives can expect to take home an impressive annual salary averaging just under $1.7M for 2021.

Who Are the Famous CEOs with the Lowest Pays?

Low-paid CEOs are often overlooked in the business world, despite their invaluable contributions to the success of a company.

Steve Jobs

Steve Jobs was famously underpaid for his role as CEO of Apple. As a testament to his commitment and leadership, Jobs was only paid $1 per year for much of his time at Apple.

Mark Zuckerberg

Mark Zuckerberg famously took a salary of $1 per year for his role as CEO of Facebook from 2013-2018 to prioritize long-term investments in the platform’s growth rather than short-term financial returns.

Jack Dorsey

Jack Dorsey famously took a salary of only $1.5 million per year for his role as CEO of Twitter—a fraction of what other tech execs make.

Despite this low salary, he has been credited with the company’s success and its ability to remain competitive in the ever-changing landscape of social media.

These examples demonstrate that low pay does not have to mean a lack of success. With strong leadership and commitment, even CEOs with the lowest compensation can still achieve great things.

Overall, there is an immense amount of variation in CEO salaries across countries and states, with top executives often taking home millions each year.