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16 September 2014

CVC heads net million dollar packages

Extensive industry research set to spark debate about how much groups should look to pay up to attract talent in the industry. The report's author, Jody Thelander, of J Thelander Consulting, is pictured.

Author: Toby Lewis, Editor

Corporate venturing groups are paying as much as $1.5m in cash compensation in an effort to attract executives to lead the programmes, a study of compensation in the industry has found. 

The research, carried out on 116 corporate venturing executives by compensation specialist J Thelander Consulting in partnership with the Corporate Venturing and Innovation Initiative, a consortium of service providers to the corporate venturing industry, is likely to spark debate about how much groups should look to pay up to attract talent in the industry.

The executive summary can be found on Bell Mason’s website, and the full results of the study can be secured from Jody Thelander, head of J Thelander Consulting. Global Corporate Venturing can put you in touch with her or go to her website here.

The Thelander-CVI² 2014 CVC Compensation Report found some units paid the heads of their units $1.5m in cash during the 2013 to 2014 financial year. These pay packages were more the triple the average cash compensation for heads of corporate venturing, and remain an anomaly.

The rising amounts being paid to attract top talent is being driven by an influx of new units into the industry, which are paying up to attract venture capital industry insiders. Global Corporate Venturing data shows the industry has doubled in size since the beginning of 2009 to more than 1100 units.

Thelander said: “The data is showing at the senior level some of the higher numbers are becoming more prevalent.”

The large discrepancy in payment to top executives is because corporate venturing is still developing normal practices for payment. Heidi Mason, of consultancy firm Bell Mason, which is a member of CVI², said: “It does not feel as an industry there are standards which are understood by HR (human resources). This is still an exception–based series of decisions.”

However, there is much less variance in the pay at the junior levels of units. Thelander said the study shows: “There is (pay) stability in the middle of groups.”

Thelander said a way for units to develop more standardised compensation packages would be for corporate venturing units to find an equivalent to carried interest, the typical performance payment received by venture capital executives, and to also find something similar to the way assets under management helps the financial venture industry set pay levels. It is likely at many units this pay would need to take into account strategic value generated by units.

There are a number of other interesting data points in the study. For instance, the data shows that more than 60% groups have hired half their corporate venturing team or more from outside the company.

The members of the Corporate Venture and Innovation Initiative are consultancy firm Bell Mason Group, accountancy firm Deloitte, consultancy firm Doblin, law firm DLA Piper, bank Silicon Valley Bank, and Global Corporate Venturing.

 The survey was also supported by trade associations NCVA, EVCA, Innovator’s Huddle and conference organiser IBF.

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