CEO Discovery Meeting Room - Discussing a Platform for Executives and Financial Sponsors

Executives can fill any of these roles, either at the portfolio company level or at the Financial Sponsor level:

Full Time
Part Time
Running a Portfolio Company
Full Time
CEO
COO
Turn-around Manager
Part Time
Chairman
Board Member
Consultant / Coach
Advising a Financial Sponsor
Full Time
Operating Executive
Industry Advisor
Part Time
Functional Advisor

Typical Middle-market Compensation
Package For A CEO In Private Equity

BASE SALARY $300k to $500k $400kx 4 year $400k (100% of base salary)x 4 years = $15+ million over 4 years Example Compensation Package $300 millionof value creationx 4% $1.6 million $1.6 million $12 million 75% to 150%of base salary 2% to 5% of valuecreated upon exit ANNUAL BONUS INCENTIVE COMPENSATIONEARNED UPON EXIT

Typical Board Composition

The board of directors for a private equity-backed portfolio company is typically small (5 to 7 people) and always controlled by the PE firm.

From the Management Team:
  • CEO of the portfolio company
From the Private Equity Firm:
  • Lead investment partner (often serves as chairman)
  • 2nd investment partner
  • Vice president
Outside Directors:
  • Added to the board due to their industry or other expertise
  • Formal board meetings/calls are often monthly or quarterly.
  • Informal conversations between the CEO and the lead investment partner can be weekly or even daily.

Board Compensation

Director compensation is often compromised of two components: an annual advisory fee ($50k to $250k) plus a portion of the equity incentive plan.

1 2 3 $400mm TEV $200mm TEV $200mm $100mm Equity $100mm Equity $100mm Debt $100mm Debt Purchase Price Exit Price Value Created: $300 million equity proceeds $100 million equity invested $200 million value created 10% of value created(equal to $20 million in thisscenario) 40% for the CEO ($8mm)50% for other management ($10mm)10% for independent board members ($2mm) Equity IncentivePlan: Allocation ofEquity IncentivePlan: