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How much should you compensate your startup company board of advisors/directors?

August 31, 2017 by brian prokopowich0

Directors – names are (in most jurisdictions) recorded on the public registrar, role is to protect the shareholders, accept some legal liability, vote on company major decisions. No hands on day-to-day activities.

Executive Director – same as above, but also in an executive role (e.g. President), with hands on day-to-day operational activities.

Advisors – No voting rights, usually are experienced or well-connected business people, guide the founders.


Compensation may vary for directors/advisors 

I had previously written in this article that whether a company has a board of directors or a board of advisors, compensation is flexible.

A company may choose to compensate either a director or an advisor in cash, with options, a combination of cash and options, cash only, or the company may even choose not to compensate such directors. This is not a critical factor for choosing a board of advisors over a board of directors or vice versa. 

Public company board of director positions can receive seven digit compensation.  At the other end of the spectrum, a startup company more likely can offer options for compensation.  When offering option-based compensation consider the following:

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This blog was originally posted by Farrah Roahman

This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find where you see this logo.

brian prokopowich

I am a technology co-founder and lover of all thing related to Start- ups and entrepreneurship. I created this group so we can all learn from each other to create foster a create tech & Start-up community.

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