Since 2008, there has been a secular trend to increase cash compensation and decrease equity to startup management teams. Tho two tables below tell the story for VPs of Engineering (VPE) and VPs of Product (VPP) across the US broadly and in the SF Bay Area.

In the past 5 years, VPEs have benefitted from a 10 to 16% increase in their cash compensation, but have seen their equity grants fall by 17-19%. The same pattern holds true for VPPs: an 8-26% increas in cash and a 25-30% drop in equity grants.

Above, I’ve charted the cash compensation trends, (salary+bonus), for the different roles and different locations. The Bay Area (marked as SF) is in red; the US is in blue. Below is the same chart for equity.

I’m using a data set that polls the compensation of several hundred venture backed companies in this analysis. I’ve chosen to use non-founder data, in other words, executives who have been hired into startups, because that market has more liquidity and should reflect true market prices better.

Why is this happening? The recent larger investments in startups could make them more cash rich and therefore more generous with cash than equity. Increases in cost of living in different regions might compel new hires to ask for a greater cash/equity split to offset inflation in living costs. Or there might be some bias in the data set towards later stage companies whose success more assured. To determine the real cause requires more analysis.

Nevertheless, startups across the US and across different management positions have meaningfully changed their compensation structures to favor cash over equity in the past five years.