VP Engineering Archives

Conservation Services Group (www.csgrp.com) is the oldest and largest energy efficiency services company in the US, focused on the residential home market. The company engages in the design, development, and delivery of energy efficiency and renewable energy programs. It offers various services, such as appliance recycling, commercial building performance, renewable energy, clean energy market development and generator representation, solar electric power design/installation and service, and other residential energy efficiency services.

Based in Westboro, Massachusetts, CSG was founded in 1984 by current CEO Stephen Cowell and 4 others to change the way utilities perceived of and operated their power generation facilties on behalf of rate payers across the country.

Today, CSG is in 22 states with 6 regional divisions, and has grown from the original five founders to more than 800 employees and $100M in revenues.  Given the initial pioneering economics of CSG’s value proposition, it was founded as a not-for-profit, and remains one today.  However, the entrepreneurial spirit runs deep, and CSG has benefited from this, growing particularly rapidly in the last 5 years.

With clients across the country like NStar, National Grid, Con Edison, Alliant Energy, Nicor Gas, San Diego Gas & Electric, and NYSEG/RG&E, Conservation Services Group has firmly established itself as the market leader in residential efficiency services.

Reporting directly to CSG President Tina Bennett, the Executive Vice President of Software & Technology will play a senior leadership role as part of the senior executive committee, overseeing all software development and technology infrastructure across the enterprise, holding leadership responsibility for a team of 70+ technologists building and maintaining internal and external software, data, and systems that interconnect CSG, their residential field auditing teams, the utilities and their rate-paying residential customers.

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As executive recruiters, we often get asked about executive compensation.

So often—after we finish up a search—we aggregate the compensation data we’ve collected across the search, and share it back with the innovation community. In this case, we recently finished a VP Engineering search for an early-stage Internet client located here in the Northeast in May, 2012.  Note that there was a specialization required in this search requiring the VP Engineering to have prior experience with Ruby on Rails development environment.

Here is the snapshot of compensation highlights from our search—

The footnote at the bottom of the image above articulates the following criteria for the majority of companies in this data set:

• Internet content/e-commerce providers

• Primarily B2C (business-to-consumer) focused

• This compensation data was specifically from those who had at minimum software development team responsibility that included all architecture, development, user interface & QA

• Although a number of these companies had venture capital/external funding, several were bootstrapped but still with engineering teams of more than 10.

• Companies were located in in the Northeast, with highest concentration in Massachusetts & New Hampshire (New England)

There are many variables to consider that influence where to pinpoint one’s own compensation vis-a-vis the above:

• The more urban locations, the more likely compensation will be higher

• The later the stage of company development, the lower the incentive compensation, the earlier the higher. Yes, this is counter-intuitive, but usually the larger the company, the more mature and capped the incentive compensation plans become

• Equity is represented here as a percentage of total outstandng stock options or share grants a company has issued or available. The more mature/de-risked a company, and the more recently an executive has joined, the lower the typical options grant.

Periodically, we make an effort to pull together executive compensation trends and analysis focusing on venture capital backed companies in the United States.  The last executive compensation report we put out was in September 2009 (see prior blog post http://www.bostonsearchgroup.com/blog/ceo-compensation-analysis-west-east-founder/), and focused on C-level compensation, with a further contrasting of founder versus non-founder CEO compensation, both West Coast and East Coast.

This report is similarly focuses on West Coast and East Coast differences in executive compensation, however this time looking at the VP level across the functional organizational structure.  For purposes of this report, only companies who broadly fit the definition of “information technology” were used in the analysis, not including biotech, medical device/medical technology, or cleantech.

The titles looked at include the following–

Vice President Business Development

Vice President Engineering

Vice President  Marketing

Vice President Sales

Vice President Sales & Marketing

VP Software Development

VP Product Management

Note that below we’ve only included the analysis of the executive compensation data, in other words the deltas. If you’d like more detail and the information on which we based the analysis, please email damador@bsgtv.com with your name, title, company and business email address, and we can provide you with the baseline full report.

Do keep in mind that this is only one set of data. To draw the best comparables, it’s important to do all three data-grabs listed above. Also, this is a “blended” sample set of multiple venture-backed industry sub-sectors in the information technology category. Some industry sub-segments may pay more or less than others with further parsing.

West Coast Early vs. Later-stage Venture Capital-backed Companies

Cash compensation is almost always higher in later stage companies, and this is reflected in all 3 quartiles of data analyzed.  For West Coast venture-backed companies, the differences are $15,000 to $50,000 in most roles, with an average different of about $25,000.  The only exception is for the VP Sales/Sales Marketing role, where cash was significantly higher in later stage companies for these roles, ranging between $75,000 to more than $125,000 in the top quartile companies.

Conversely, equity is almost always higher in early-stage companies to offset the lower salaries referred to above.  For these West Coast companies, regardless of quartile, earlier-stage companies received on average ¼% to ½% more equity, with the biggest jump in VP Sales/Marketing, and lowest in the VP Engineering function.

East Coast, Early vs. Later-stage

East Coast compensation tells a different story from their West Coast counterparts.  Although cash compensation was similarly lower in early versus later-stage companies, East Coast executives of venture-backed companies didn’t see the “make-up” effect in equity.  In fact, equity appears lower in many of the quartiles compared, by as much as ½% comparing East Coast early versus East Coast later-stage.

East Coast vs. West Coast, Early-stage

Cash compensation, East versus West, shows that West Coast executives of early-stage companies more often than not earn more in base .  West Coast Engineering is $10,000-20,000 more in base, VP Marketing is up West over East by $10,000 to $50,000. VP Sales/Sales & Marketing is actually the one notably lower cash category where East Coasters are better off than West in the higher quartiles (but not the lowest).  As noted above, West Coast early-stage executives are compensated more favorably when it comes to equity than their East Coast brethren virtually across the board.

East Coast vs. West Coast, later-stage Venture Capital-backed Companies

As for cash compensation for later-stage companies East vs. West, a similar pattern existed being mostly lower than their West Coast counterparts, than its West Coast peers.  However, when looking at equity stakes in later stage companies East vs. West, the East Coast did better, often by ¼% to as much as ½%.