Greater sharing—even greater expectations: Private equity portfolio company management compensation survey

At a glance

Greater sharing—even greater expectations: Private equity portfolio company management compensation survey

PwC’s 2016 US Private Equity Portfolio Company Management Compensation Survey highlights trends and practices in equity compensation design among US-based private equity firms.


Big picture: Equity compensation trends and practices

Sponsors have begun to increase the size of equity compensation pools to push equity deeper into the organization, while continuing to use return-based performance conditions.


Key takeaways:


#1—Diving in: Increase in Management equity pool Management equity pool reserves have increased to 12% of fully diluted shares (up from 10% in earlier studies), at the median.

Read more >
#2—Driving performance: Award vehicles Stock options remain the most prevalent form of equity compensation used by financial sponsors.

Read more >

#3—Award vesting and performance goals Sponsors continue to tie award vesting to performance-based conditions.

Read more >
#4—Plan participation Participation is generally limited to the two- to-three most layers of senior management.

Read more >

#5—Cash compensation levels Cash compensation (salary plus annual bonus opportunity) for executives at sponsor-backed companies is generally aligned with market competitive pay levels for public company executives.

Read more >