Nearly One-Third of Technology Firms Changed Their Healthcare Plans Due to Obamacare, According to Technology Executives Roundtable Survey

ATLANTA, March 21, 2013 – Approximately one-third (31 percent) of companies participating in the Technology Executives Roundtable (TER) 2013 Atlanta Technology Executive Compensation Survey say they have changed their plans or programs either slightly or significantly as a result of The Patient Protection and Affordable Care Act (“Obamacare”).

“With uncertainty around the effects of Obamacare in 2012, seeing one-third of survey participants change their healthcare plans or programs is an indicator that we will likely see more healthcare changes over the next few years,” said Paul Ilse, president of TER. “Health benefits is making the list of topics of interest to senior executives along with compensation, bonuses and equity ownership as they continue to grow their business.”

With the release of its fourth annual Atlanta Technology Executive Compensation Survey, TER, an association that consists of more than 120 Georgia-based CEOs, CFOs and general managers, is providing a unique service to its members and to the Georgia technology community at large. The study was underwritten by Arketi Group; ExecuLinks, Frazier & Deeter; Morris, Manning & Martin; Pritchard & Jerden; Silicon Valley Bank; and Wm. Leonard & Co.

The survey also found that overall, average base compensation among technology executive teams ranged from $226,136 for CEOs to $138,806 for senior marketing executives. The CEO and president positions commanded the highest average salaries in the executive suite, followed by CFOs, COOs and other executive team members. Within the executive suite, senior sales, marketing, business development and technology/development executives earned similar salaries (less than 20 percent variance).

Bonus Potential

With regard to bonus compensation, the study found target bonus potential for technology executives in 2012 ranged from an average high of $197,484 for CEOs to a low of $25,000 for senior marketing executives. Of this available 2012 bonus compensation, CEOs, senior sales executives and presidents led the executive suite with $119,625, $86,200 and $70,427 of total bonus potential earned respectively.

Commission potential for sales executives averaged $91,613 at 100 percent of goal for sales executives and $30,667 of goal for business development executives.

Compensation Plans for 2013

For 2013, 69 percent of companies surveyed plan to increase base compensation. A careful analysis of individual company plans, however, reveals that 71 percent of those planning an increase will raise compensation 5 percent or less, while only two companies (3 percent) will raise compensation by 25 percent or more. Companies not planning an increase changed significantly from 40 percent in 2012 to 31 percent in 2013, indicating improved perceptions regarding business and the economy.

Executive Equity

In addition to base and bonus compensation, the survey provides information on equity ownership. For example, the study found significant differences in non-founders equity ownership among CEOs and presidents, and other executives. On average, CEOs and presidents were granted 6.63 percent and 9.16 percent of non-founders equity ownership. The remainder of the executive team holds non-founders equity as follows:

• COO: 2.93 percent
• CTO: 2.22 percent
• Senior marketing: 1.78 percent
• CFO: 1.52 percent
• Senior sales: 1.29 percent  
• Senior engineering/development: 1.15 percent  
• Senior business development: .94 percent  

Additional findings regarding stock options included:

• CEOs currently hold the largest percentage of the overall total stock option pool at 24.03 percent, followed by COOs (16.59 percent), presidents (14.33 percent) and CFOs (7.97 percent). Senior business development executives, senior sales executives and senior development executives, averaged between 4 and 7 percent of the overall option pool.
• Vesting periods ranged from one to five years, with four years being the normal vesting period – 54 percent of respondents stated that their vesting period was four years. After that, 19.5 percent of firms had a three-year vesting period, with 12 percent at five years. A very fortunate 14.5 percent of firms were at two years or less required to vest stock options.

The survey is available exclusively to TER members and clients of TER survey sponsors. For more information on TER, visit www.ter-atlanta.com.

About the 2013 Atlanta Technology Executive Compensation Survey

The study was designed to identify executive compensation and company ownership among Greater Atlanta technology companies during calendar year 2012. Overall, 99 public and privately-funded technology companies across a wide range of market segments, including software, hardware and services participated in the survey. Companies participating in the study were led by Software and SaaS Developers (58 percent), Technology Consulting and other professional service firms (15 percent), Internet Services (9 percent), Hardware Developers (9 percent) and others (9 percent). The majority of firms were privately funded (79 percent) with Angel funding the most common source (24 percent), in business longer than five years (72 percent) and had 2012 revenue in excess of $2 million (78 percent). Most companies had less than $25 million in revenue (79 percent), with 22 percent under $2 million and 36 percent with $2-10 million. Only 10 companies (10 percent) had more than $50 million in revenue.