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

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May 2016

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.

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

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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.

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#2—Driving performance: Award vehicles

Stock options remain the most prevalent form of equity compensation used by financial sponsors.

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#3—Award vesting and performance goals

Sponsors continue to tie award vesting to performance-based conditions.

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#4—Plan participation

Participation is generally limited to the two- to-three most layers of senior management.

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#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.

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Contact us

Orla Beggs

People & Organization (P&O) Tax Leader, PwC US

Steve Rimmer

Principal, PwC US

Andrew Skor

Principal, PwC US

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