Tech and product leaders in startups are pulling ahead in the pay scale, while CFOs are increasingly being evaluated on their ability to secure funding, according to the latest Total Rewards Benchmarking (TRB) report by xto10x. The report says that pay disparity is driven by the growing importance of engineering, product, design, and data science roles, which can command up to 80% higher compensation than HR, marketing, and finance counterparts.
According to the report, chief technology officers (CTOs) and senior vice presidents (SVP) of Product command a median fixed salary of Rs 1.77 crore and Rs 1.72 crore, respectively. In contrast, brand marketing heads earn Rs 80.6 lakh, VP-Sales (B2B SaaS) Rs 85.1 lakh, Chief Human Resources Officers (CHROs) Rs 95.2 lakh, and CFOs Rs 1.1 crore.
Leadership compensation is increasingly aligned with a startup’s business model. As startups scale, they require more experienced executives, leading to a 20-30% salary increase at each growth stage. Growth-stage startups allocate an average of 68% of their revenue to employee compensation.
In sectors like fintech and edtech, architects are paid 10% more than peers due to the need for scalable systems. D2C startups, on the other hand, pay developers and managers 21% less due to lower technical demands. Similarly, marketing heads in B2C and D2C startups earn 10-20% more than their counterparts in other industries due to their role in brand-driven sales.
Operational roles also experience variance in incentives. Quick commerce frontline workers can earn up to Rs 60,000-70,000 annually in performance incentives, whereas D2C startups, which often outsource fulfillment, offer minimal incentives.
A major shift is occurring in CFO compensation. While traditionally receiving 10-15% of their pay as variable, many CFOs are now on fundraising-linked incentive plans. These tie a percentage of raised funds directly to CFO compensation, aligning pay with capital acquisition success. Late-stage startups, prioritising profitability, incentivise financial leaders to optimise capital efficiency.
This shift extends beyond CFOs. Variable pay now constitutes 25-50% of total compensation for sales, marketing, and growth leaders, with sales heads most commonly seeing 50%. Non-business roles such as HR, finance, and engineering typically see variable pay around 15% of fixed salaries.
Cash remains a key element in leadership compensation, but startups are increasingly adopting Management Stock Option Plans (MSOPs). Founders of companies like Zomato, Paytm, and Freshworks receive performance-linked stock grants based on business milestones such as valuation or revenue growth. Other startups, including FirstCry and PolicyBazaar, have IPO-readiness-linked stock grants to ensure founders maintain desired equity levels before listing.
Typically, founder compensation carries a 20-40% premium over the highest-paid CXO, though many founders forgo salaries at later stages. This differs from enterprise CEOs, who generally continue receiving high salaries regardless of business phase.
Startups are moving toward dynamic, outcome-driven pay structures. Early-stage firms lean on commission-based incentives, transitioning to structured target-based plans beyond $3-4 million in revenue. Variable pay, once reserved for sales roles, is now common across functions. In SaaS startups, Customer Success Managers (CSMs) have incentives tied to Gross Revenue Retention (GRR), while Account Executives (AEs) earn bonuses based on new revenue.
“With the growing emphasis on profitability, getting compensation and payroll spends right is crucial for startups. However, the lack of clear benchmarks often leads to sub-optimal decision-making in this area. This report aims to bring clarity and establish the right benchmarks for what is often the most significant cost in a startup’s P&L,” said Neeraj Aggarwal, co-founder and COO, xto10x.
