PortCo Compensation (CEO/CFO/COO)
Question for the people -- what is ballpark range for c-suite cash comp at a PE PortCo?
Thanks in advance friends
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Far too broad to get a useful answer, need to at least give company size... CFO of a LMM portco in the midwest is a lot different than a UMM tech CEO in NYC
Typically in MM-UMM size range (call it $500M EV - $2B) I see something like:
CEO: 500k-1M, maybe a touch more with performance bonus or if they are a founder
CFO: 250-500k, same point on bonuses (usually see up to 50% bonus target for hitting plan)
Rest of CSuite: 200-400k, though again there are outliers if someone has unique background, is super essential, etc
The real upside is in equity comp so my experience has always been no one is super focused on cash comp and equity options are the far bigger focus
What is the usual equity comp for each of these positions?
A good rule of thumb is 5% of equity value as options in the base case (20% or 25% IRR). Allocation is pretty variable but maybe 2% goes to CEO, 1% to CFO, 2% to rest of CSuite and 1% of options. Obviously highly variable but that’s a good rough starting point
Any numbers for LMM companies? Thanks
Wow not bad. Are incentive milestones difficult to reach?
Have a reference point- former F500 SVP. Now $550k cash base with up to 100% bonus performance targeted, around 2.5% equity.
$30mm ebitda $450Mm top line manufacturing and logistics. CEO $650k similar terms, more equity.
Thanks for the replies — all very helpful.
I'll bite, $500m business $150m of EBITDA CEO takes $1m cash compensation with 100% bonus target; 2-3% of equity which would be around a $25-35m on a 2.5-3x deal
Damn. Assuming software with those margins? Also what class of shares does he get?
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