• Incentive stock options remain the most common form of equity granted, accounting for 62% of the aggregate equity given. 
• Average CEO salaries increased from $211,000 in 2005 to $220,000 in 2006. 
• The average target bonus for the CEO is $93,000 in 2006 versus $57,000 in 2005. 
• With the increasing headcount, total cash compensation for the CEO generally rises from $260,000 in companies with 20 full-time employees (FTEs) to $397,000 at the largest companies surveyed with greater than 75 FTEs. 

Other key compensation trends in the Life Sciences sector include: 

• The average target bonus for the CEO in 2006 is $94,000, a rise of $39,000 from the 2005 actual. 
• Average equity holdings across the 13 executive positions surveyed totaled 16.2%, an increase from 14.5% in 2005. 
• Approximately 82% of the companies surveyed utilized options while just 4% used restricted or common stock only. 
• Approximately 66% of the non-founding CEOs in the survey have a severance package with a median of 12 months. 44% of non-founding CSOs (Head of Research and Development) had a severance package. 
• A non-founding CEO commands a 22% premium in total cash compensation over the founding CEO. 
• Dilution of equity for the founding CEO is consistent across rounds of financing raised, moving from an average of 18.10% at companies with one or fewer rounds raised, to 7% at companies with four or more rounds of financing.

About the 2006 Compensation & Entrepreneurship Reports in Information: The report is  co-sponsored by Ernst & Young LLP's Strategic Growth Markets Practice, J. Robert Scott Executive Search, and Wilmer Cutler Pickering Hale and Dorr LLP (WilmerHale), This is the seventh annual Compensation and Entrepreneurship Report in Information Technology, which collects data on the top executive positions in privately held, primarily venture-backed companies. 2006 represents the largest participation in the history of the survey with responses from more than 1,500 executives representing over 300 companies from across the country in five industry segments: Software and Communications, Hardware, Semiconductors and Electronics, Services, Consulting and Integration, and Content and Information Providers.

The annual Compensation and Entrepreneurship Report in Life Sciences collects data on the top executive positions in privately held, primarily venture-backed companies. 2006 represents the largest participation in the history of the survey with responses from more than 800 executives representing over 170 companies in a wide variety of industry segments: Pharmaceuticals, Therapeutics, Diagnostics, Devices, Bioformatics, Genomics and Molecular Technologies.

The survey data was collected between April and June of 2006. The surveys were designed by Noam Wasserman, Assistant Professor at the Harvard Business School, and used extensively in his ongoing academic studies surrounding the early choices faced by founders that have important implications for them and for their ventures. The development of these reports is supported by WilmerHale, J. Robert Scott, and Ernst & Young's Strategic Growth Markets practice, which tailors the firm's national and global capabilities to meet the unique needs of emerging and high-growth companies.