In terms of take home pay, South African startup founders or CEOs earn more salaries than their counterparts in other sub-Saharan African countries. A survey of startup compensation packages which focused on nearly 50 startups in Kenya, South Africa, Nigeria and Ghana was carried out by Timon Capital, an early-stage investor in sub-Saharan Africa and think tank Briter Bridges. The aim of the survey was to determine how much startup founders and CEOs take home on monthly basis as their salaries.
“We wanted data around compensation because it’s a useful tool for ourselves — and also useful to the entire ecosystem,” says Chris Muscarella, partner at Timon Capital, on their motivation for undertaking this survey.
Here Is All You Need To Know
- According to the survey, 25% of African startup CEOs earn compensation above $60,000 annually, six times the median compensation for junior engineers.
- CEOs take home salaries that are substantially larger than other employees, but other C-level positions are roughly similar to senior engineers.
- Kenya and South Africa generally have higher compensation across the board than Nigeria and Ghana, especially for executives.
- However, on average, startup employees across all levels earn far more in South Africa than anywhere else. For instance, chief executives of startups in South Africa earn more than five times their counterparts in Ghana and Nigeria, and more than double those in Kenya.
Due to obvious sensitivities when it comes to disclosing financial data, companies are not easily forthcoming with information about their compensation structure, according to Lisa With, Head of Research at Briter Bridges.
“Most respondents were at their pre-series A funding stage. When companies receive funding, there is an understandable increase in sensitivity about financial details.”
The lack of data and transparency represents an obstacle to how deeply we can understand compensation in Africa. Yet, “it is not possible to compel company leaders to respond due to the sensitive nature of questions about salaries. Some companies, for fear of being targeted, declined to participate in our study.” With said.
Among software engineers, the survey also found that South Africa ranks highest for pay packages. In contrast, despite being Africa’s largest economy and being home to the continent’s most valuable start-up ecosystem, Nigeria is the least lucrative for software engineers among countries surveyed.
“There’s a definite correlation between founders who are magnets for talent and able to retain that talent over time. Compensation is an important part of retaining great talent, but not the only part,” the report notes.
According to the survey, senior engineers are in the middle of the compensation spectrum. They often receive double the salary of junior engineers. Median compensation for senior engineers is $22,500 and median compensation for junior engineers is $10,000.
Disparity In Talents
The survey also found that the average startup founder in Africa holds a Bachelor’s degree. Nearly 33% of founders obtained a university degree outside of Africa.
Amongst 1,079 founders of 788 startups surveyed, only 20% are female. Kenya has the least gender disparity with 25% female founders.
”Those developer salaries are fascinating – you’re competing with remote work from around the world so,” tweets Seyi Taylor, entrepreneur and founder of online tech magazine, TechCabal. ”Remote work means a bunch of things but the one that always stands out to me: companies in wealthier countries have access to cheaper talent companies in poorer countries compete for talent with wealthier companies from across the world.”
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world