Board Of Directors – Pre-IPO Compensation Summary

The level of compensation of a board director on a accelerator company board is typically driven by (i) level of involvement / value creation (ii) industry recognition and (iii) stage/performance of the company. CrossWork companies tend to focus more on (attractive) equity compensation given their pre-IPO status. 

Here are some examples for a smaller size of growth-equity stage company – 

Level of board involvement:

  1. Lower involvement — board directors are more reactive than proactive, available for phone calls from time to time (say, once per quarter – possibly once per month). Will attend board meetings, as required, on a quarterly or other basis. Compensation may be 0.01% to 0.3% equity (options/warrants/stock).
  2. Normal involvement — board directors are more involved and are expected to be present at key strategic events, participate in some business calls in addition to board meetings. Compensation may be 0.1% to 0.5% equity (options/warrants/stock). 
  3. Very high involvement — board directors are involved in daily decision making at the company often having weekly or biweekly calls with the leadership team. They often orchestrate and lead key strategic and growth events.  Up to 2% equity (options/warrants/stock). Sometimes up to 5% for “transformative, definitive, long-term value creation.”

As portfolio companies grow and for larger companies, these compensation percentages (but not absolute value) generally fall.