Business_news The unconventional CEO of $33.3 billion Snowflake — which just listed the largest software IPO in history — is already paid more than the heads of Oracle, Microsoft, and Salesforce. It shows the power of how startup exec compensation can be structured.

Business_news

Snowflake CEO Frank Slootman.

Snowflake


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  • Snowflake, a cloud-based data-warehousing company, went public Wednesday at $120 a share. 
  • The company has been around for eight years and is growing fast. 
  • Executive compensation is complicated: When we say “paid,” we’re talking about what is reported in SEC documents as part of an executive’s compensation.
  • Because of complicated equity valuation, the actual dollar amount paid to executives is typically different from what’s listed in company documents. 
  • CEO Frank Slootman made $287,990 in salary in 2019. But Slootman’s reported total compensation for 2019, bolstered by almost $60 million in option awards, was higher than that of the CEOs of Microsoft, Oracle, and Salesforce.
  • Visit business Insider’s homepage for more stories.

The tech unicornSnowflakeoffers data warehousing in the cloud, and in just eight years, it has taken on the likes of Oracle, Amazon, and Google. On Wednesday, it went public at a$33.3 billionvaluation, breaking records as thelargest-ever US software initial public offering. The previous record holder, Uber, wentpublic at an $8.1 billion valuation.

Leading the company through the IPO is CEO Frank Slootman, who made more than $60 million in total compensation in 2019, according to anS-1 filed by the company.

Slootman, who hasprovedhimself by leading tech companies like Data Domain and ServiceNow through IPOs, stands out in Silicon Valley for his views on investor activism and social justice.

Business_news Analyzing unicorn-executive compensation

We broke out thecompensationfor the CEOs of Microsoft, Alphabet, Oracle, and Amazon and compared those figures with thecompensationfor Slootman and Snowflake’s former CEO Bob Muglia, whostepped downin mid-2019.

Because of the mid-2019 change, both Slootman’s and Muglia’s reported salaries were only a portion of what they would have earned if they’d worked a full year — Slootman’s full-year salary was $375,000, and Muglia’s was $300,000, according to the company’samended S-1 filing.

But even with half a year’s salary, the additional forms of compensation that Slootman received vaulted his overall earnings ahead of the pay of other tech execs.

Let’s unpack salary versus other forms of compensation. 

Business_news Salaries, awards, and full compensation

The full-year salary is sometimes referred to as a salary rate. The compensation data provided by companies in their annual proxy statements filed with the SEC includes the amount earned, rather than the actual salary rate. This difference explains the discrepancy between Slootman’s and Muglia’s earned salary and their salary rate.

Even with these adjusted full-year salaries, both Slootman and Muglia earned lower salaries than CEOs from all firms below, with the exception of Jeff Bezos, who was paid about $82,000 for his reported 2019 salary. To be clear, the total compensation reported for Slootman was more than that reported for Bezos and both CEOs of Oracle. 

Business_news All about equity

The equity awards that Snowflake’s current and former CEOs were awarded made all the difference.Equity awardsessentially grant employees shares of ownership in the company. The shares will gain and lose value as the firm’s stock price changes. 

Because of these awards, Slootman’s total compensation is higher than that of his counterparts from Microsoft, Oracle, Amazon, and Salesforce in terms of total 2019 compensation (as reported in the “Summary Compensation Table” in the latter companies’ latest proxy statements). Muglia’s total compensation was higher than that of Oracle co-CEOs Safra Catz and Mark Hurd, and Bezos.

The chart below shows compensation elements split out for the CEOs of Snowflake, Microsoft, Alphabet, Oracle, Amazon, and Salesforce. You can use the drop-down menu at the top of the graphic to select from salary, non-equity incentive plan compensation, stock awards, option awards, other compensation, and total compensation. 


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Snowflake IPO
Tech Unicorn
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CEO compensation


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