We’ve written before on normalizing adjustments, as well as the impact that executive comp can have on valuation. In that vein there’s a pretty interesting thread going over on Quora. A questioner asks: “Is it OK for the CEO of a Start Up to draw a $350k salary?”
Lots of great responses here. Whats interesting is that 1) the answer is “no” and 2) the range pretty well settles in $125k to $150k or so. One responder links over the a post on StartupCompass with this chart:
Here’s out take in the “mature” company valuation world we live in: executive comp is more often than not outsized, and is just disguising dividends as salary. Even from a tax perspective it’s pretty hard to justify doing this. But nonetheless, for business valuation purposes, you can expect we’ll be talking reducing your salary!