Let’s talk about money!
As a recruitment partner to North American tech companies, we’ve had the opportunity to talk with hundreds of high-growth start-up and scale-up leaders about their experiences, aspirations, motivations, and of course…. their compensation strategies!
When establishing a target compensation range for a new search, clients always ask us “What are you seeing in the market right now for a role like this?” Since we’re having these conversations on a regular basis, we thought we would pull back the curtains and share some insights to help you create a competitive compensation package. And if you’re on the hunt for your next challenge, we hope you’ll find this data to be useful in the negotiation process.
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In this edition we share some insights and analysis on compensation packages for Product Management professionals at all leadership levels. Product executive searches are one of our sweet spots here at Artemis Canada, so we’re fortunate to be able to share learnings from a broad range of recent searches covering individual contributors all the way up to the Chief Product Officer level.
Product Management leaders have some of the most sought-after skills in the tech industry, with salaries that reflect the impact and value they bring. They influence all parts of an organization, from engineering and design to sales and customer success. Not only are they responsible for the decisions about what is to be built, but also play a key role in how and when they will be built, launched, and supported.
The demand for Product Managers is at an all-time high, in what could be considered the ‘golden age’ for these professionals with the emergence of product-led growth strategies in tech. An analysis of publicly available data from Indeed, LinkedIn and the Wayback Machine showed that openings for Product Managers in the US grew by 32% between 2017 and 2019. A more recent datapoint shows that this trend has no signs of slowing down despite a turbulent pandemic economy, as LinkedIn ranked Product Managers as the 11th fastest growing job across all professions and industries in their 2022 Jobs on the Rise report.
FACT: The hypergrowth of the Product Management profession is outpacing even the most sought-after professions perpetually on the high-growth list, including software and security engineers (*in YoY growth %)
The demand for talented Product leaders coupled with the level of impact (positive or negative) they can have on an organization's success are driving forces behind compensation packages that are among the highest we’ve seen across all professions in the tech industry.
Let’s dive into the numbers
We’ve analyzed a spectrum of Product Management compensation packages from Senior Product Managers all the way up to Chief Product Officers to share both the high-level summaries and some of the related insights to share how your peers are crafting plans with a mix of base and variable pay.
Below are snapshots for five groupings of Product leaders that emerged from the data, along with some very interesting insights.
Keep in mind: We support start-up and scale-up organizations, so most of these data points represent Product leaders from organizations who have gone through a similar growth journey (start-up and scale-up leaders). We also look for the cream of the crop within this group - the best of the best. So our sample is from product-oriented tech companies with talent who've demonstrated staying power. Consider these numbers the top 20-25% of the market - which, in most cases, is exactly what you’re looking for.
What are you looking at?
This data represents volunteered current compensation (CAD) aggregated at the 25th, 50th and 75th percentiles, from Product leaders at the following levels:
Senior Product Manager
(Group) Manager, Product Management
Director of Product
Vice President of Product
Chief Product Officer
Each individual was part of a SasS startup or scalep based in Canada or the US at the time they were in conversation with a member of the Artemis Canada team. USD salaries have been converted to CAD at a multiple of x1.29. Each datapoint was collected between January 1, 2021 and present day, from twelve different Product executive searches completed by Artemis Canada.
The structure of compensation plans vary for Product leaders, but we’ve seen the majority structured as base-heavy with a 10-30% bonus plus an equity stake. We’ve opted to show data as total on-target earnings rather than separate out variable incentives.
Deeper Insights
It’s clear from this snapshot that the sky is the limit for earning potential for Product leaders in the tech industry. Unlike some of the other roles we’ve analyzed, Product Management professionals not only have a high ceiling for earnings but also have a remarkably high floor at even the Senior Product Manager level. The lowest total compensation package we recorded came in at $105K CAD, with the median coming in at $143K CAD. CPOs are earning just shy of $400K CAD, and it’s not unusual to see these salaries exceed $500K + equity. Comparably, our 2021 Salary Snapshot for Senior Software Engineers showed Senior Engineers with a median package at $120K CAD, and our most recent look at Engineering Leaders saw high-water marks of $450K CAD.
A big factor playing into this high floor (aside from demand forces as discussed earlier) is that the title of Product Manager is generally not a true indication of experience level, as opposed to comparable titles such a Marketing Manager, HR Manager or Finance Manager. The field of Product Management doesn’t have a true ‘entry level’ role due to the complexity and experience required to influence the direction of a product and large scrum teams. As a result, many newer Product Managers have already built lengthy and successful careers in other adjacent fields such as Development, Design, Sales, Marketing or CX, in some cases reaching the Director or VP level in their field before taking on a Product Manager role. So, a Product Manager earning upwards of $150K is not always just a reflection of their current scope of work, but also a recognition of deep expertise in an adjacent field.
Another factor driving up Product compensation is the relative scarcity of Product Management positions in a tech company. Typically there are between 6 to 12 Developers for every 1 Product Manager (see: Jeff Bezos’ two pizza rule). While there is high cumulative demand for Product Managers and Leaders in the job market, companies demand elite, high calibre talent to fill these positions because of their scale of influence on expensive scrum teams. If one Software Engineer struggles, teams can temporarily pick up their slack. If the Product Manager struggles, the entire team and project can slow to a crawl (or sprint into a wall).
At the most senior level, Product leaders in the tech industry are applying a set of skills that most closely aligns to a CEO role, and are could even be viewed as training grounds for future CEO positions. Product leaders are hyper customer-focused, are experts at leveraging insights from data, and most importantly they know how to lead teams and rally large groups towards a collective goal. Product leaders need to be a jack of all trades AND possess deep expertise in certain areas, so it should be of no surprise that they are among the top compensated executives in tech companies.
What about Start-ups and Equity?
Individuals who are part of earlier-stage companies tend to be on the lower end of the salary range but receive a larger share of equity to compensate for a lower base salary. This is typical for all roles, not just Product.
Leveraging equity as a key component of compensation not only enables companies to conserve cash but also ensures that your team is aligned around success. The downside of highly leveraged compensation plans is the exclusion of great candidates who have financial commitments that preclude them from roles with lower than market salaries.
With the tech talent market coming back into balance, sought-after Product leaders will continue to command large compensation packages, but those packages could start to look different as companies reshuffle the balance of cash and equity.
What’s behind the data?
Our snapshots are not typical salary surveys, as they represent only the data we’ve collected from a handful of recent searches. We find it to be pretty useful and topical information, as it represents current data from a sample of individuals who we’ve carefully selected as having credible and validated experience with successful local companies.
Each Salary Snapshot represents between 40 – 120 sources.
Each source is an individual who we deemed a promising candidate for a role within a high-growth tech company. Most are gainfully employed and many were recommended as exceptionally talented. As a result, our salary numbers might be skewed towards the top of the range.
We elected not to show compensation figures related to equity or options. Though this was a significant aspect of the comp package for many execs, it’s often tough to put an annual dollar value on equity.
Specific details that would identify an individual or their employer will not be shared for obvious reasons.
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