I was wondering if anyone has insight on compensation for software CEOs at PE-backed companies in the lower-middle market. Also, how common is hiring a CEO who will largely be working remote?
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Based on the most helpful WSO content, compensation for software CEOs at PE-backed companies in the lower-middle market can vary significantly depending on the size of the company, the PE firm's strategy, and the CEO's experience. However, it's common for compensation to include a mix of base salary, performance-based bonuses, and equity incentives. For lower-middle market companies, base salaries might range from $200k to $400k, with bonuses and equity potentially pushing total compensation higher.
As for remote work, while remote-friendly policies are becoming more common, especially in tech and software sectors, the decision often depends on the company's operational needs and the PE firm's expectations. Smaller companies and those in software are generally more open to remote arrangements compared to larger, more traditional firms. However, a CEO's ability to lead effectively, whether remote or in-person, is a critical factor in such decisions.
Sources: PE Business development compensation? What's the typical range for a VP?, We should be embracing remote work, Coronavirus, Remote Work, and the Future of CRE, The logic behind going into a Corp Dev/Strat for work-life balance?, Going Fully Remote
I'm not sure, but I know a recruiter who focuses on LMM sponsor-backed software companies would tell you for free. Just tell them you're considering engaging them at some point (you can be vaugue).
Have you had any luck finding Heidrick & Struggles-type reports on the topic?
For a PE-backed software company, I’d look beyond base + bonus because the equity piece can completely change the attractiveness of the role, especially with an exit in mind. Remote matters too, but I’d care more about how the CEO works with the board and whether they can actually lead the company through its next phase.
I’ve actually used CJPI for leadership and succession decisions, and what I liked was that they look at the company first, not just the person’s CV. They help work out what the business needs at its current stage, what kind of leadership structure makes sense, and what capabilities the next CEO actually needs to move the company forward. That’s the part I’d focus on when evaluating a PE-backed CEO role.
get a recruiter who focuses on LMM
or just pay someone to do the thinking for you
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