This look into compensation trends for Directors in the technology industry finishes out our series on salary and benefits changes for executives, with previous dives into the C-suite and VPs in the world of venture capital-funded startups. For a broad view of all pay band developments for VC-backed startup leaders, check out our comprehensive Executive Compensation Guide here.
Director-level positions – as well as the oft-similar “Head of” departmental titles – occupy a unique place in the tech startup space. The Emerald City at the end of every venture capital-funded firm’s Yellow Brick Road is unicorn status after an IPO, which means growth is always the key objective to strive for. This greatly impacts when it makes the most sense to hire for different jobs, especially executives roles, and consequently the average compensation rates from Seed to Series D.
Keep reading below to see the various salary and benefit trends for the top Director and department Head titles:
Salary Trends by Director Title for 2023:
Directors are an interesting placement in the catalogue of executive-level roles for the world of SaaS startups. Those who carry these titles – depending on their area – will usually fall into one of a few general buckets:
- A new hire brought on with the expectation to grow into a more senior level VP or C-suite position
- A more junior executive recruited to lead a team, POD or subdivision under a department
- An early stage startup hire tasked with building out the foundation of a department
These background factors each play an important role in deciding both base salary and benefits packages offered to candidates, since for many becoming a Director or “Head of” was a stepping stone to a higher-earning title. For others, it reflected their move to a more focused management position, such as leading Demand Generation or Business Development.
Here are the top compensation trends we saw in 2023 for Directors in four major departments – Marketing, HR, Product Management and Sales:
Director of Marketing
The salary for a Director of Marketing or Head of Marketing ranged from $175,000 to $260,000 but the median rate was $200,000 to $240,000. Compensation was highly affected by business size and stage, with most reaching their pay band cap off at Series C, even for top performers. Bonuses started low and for some were not even included with their benefits package until Series A or B, while most others saw an average rate of 10% to 20%.
The Director of Marketing can be a more flexible position than others on this list, and are often just as likely to be filling in for a VP at an early stage startup. Once a company has grown enough, however, hiring for Director-level marketing roles should be focused on candidates that bring specific skill sets to drive performance in key areas, such as a Director of Demand Generation.
Director of HR / Head of People
Directors of HR – or Heads of People or People Ops – saw a wide salary range of $180,000 to $300,000 in 2023, while the median held a little narrower at $200,000 to $250,000. However, rates usually stayed at their stage ceiling, with most reaching the cap of their base earnings at Series C. The average bonus rate rounded out on-target earnings (OTE), though, with many Human Resource Directors qualifying for 20% to 30% rates.
A Director of HR or Head of People is definitely most ideal to hire at a later stage versus early, which is reflected in the growing OTE for this title past Series B. However, there is still value in building out Human Resources at a smaller stage since the team will most likely start small and will need to scale with the organization’s headcount as the need for their output grows.
Director of Product
The Director of Product title – also often called Head of Product Management, etc. – commanded a total salary range of $200,000 to $350,000 with a median range of $250,000 to $300,000, the highest rate on this list. Like many other Director-level and “Head of department” positions, base rates remained steady through Seed to Series B before maxing out at Series C. The median bonus rate ranged from 10% to 15% – what is interesting to note is that the 25th percentile of positions surveyed did not qualify for a bonus, while the 75th percentile saw their top rate as early as after Series A.
Directors and Heads of Product are often the most important position of their level for SaaS startups, since their expertise, experience and drive will play a defining part in ensuring continued success and growth. Salary trends for Product Management also usually hit a ceiling at the executive level regardless of title, so many remain here or as VPs under a CTO or another C-level officer.
Director of Sales
A Director or Head of Sales role came with a total salary range of $185,000 to $260,000 while the median landing at $200,000 to $240,000. However, earning rates for this title were much more dynamic than other executive-level positions and broke all the rules when it came to typical averages.
Bonuses varied wildly between different company sizes and bucked more common trends. For example, the highest earners were not usually found at Series D firms, but instead were the top performers at Series A and Series B startups. Larger percentages were typically given to those in smaller organizations to strengthen the incentives for sales leaders, while the median rates usually in fact dropped past Series C.
The reasons for these unique compensation trends are fairly obvious – SaaS startups will need to continue building out their sales team the more they grow and hit new funding targets. Once the organization gets past the Series B or even Series A stages, the department is more likely to be run by a C-suite executive and any new Director hires are going to be managers or team leaders, such as a Director of Business Development or a Director of Sales Engineering.
Other Executive Compensation Trends
2023 was a landmark year for the technology industry, with a lot of ups and downs that brought change to the market. Compensation trends for executive positions were affected by these developments as well, and we saw some noticeable shifts as companies adapted to new scale goals. One of the biggest of these pivots is a growing reliance on fractional executives:
Fractional Executives for Department Leadership Gaps
Fractional executives are something of a middle ground between traditional third-party advisors and interim execs, allowing companies to scale project management to hit short-term goals. Where they differ from an external consultant is being able to contribute their experience on-demand, but still be able to lead a team directly rather than from a distance.
We found that quite a few SaaS startups would leverage this “Expertise as a Service” for core teams and subdivisions that needed more time and direction to continue scaling up to where the organization needed. Here are the top fractional executive titles and compensation rates we saw:
- Fractional Head of Marketing – $200 to $400 per hour, or $10,000 to $20,000 three-month retainer
- Fractional Head of Sales – $200 to $400 per hour, or $10,000 to $20,000 three-month retainer
- Fractional Head of People – $200 to $400 per hour, or $6,500 to $20,000 three-month retainer
Make Executive Recruiting Easier with Betts
The shakeups in the technology industry throughout 2023 created a bigger demand for candidates with more experience, which will directly impact salary trends for startup recruiting in 2024. Trying to stay ahead of these while hiring for new managers and C-level officers could become time-consuming and expensive, but Betts Recruiting can make the process both easier and a lot less costly when you take advantage of our game-changing approach to talent acquisition.
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