PE and VC firms battle for top CEOs
According to a joint study by the search firm Jeff Christian Partners and PE firm Talent Equity Capital, CEO compensation of private equity and venture capital firms will rise over 20 per cent in 2020 compared to 2019.
This is according to a study that included over 100 interviews with PE/VC partners, CEOs and CEO candidates on compensation, conducted over the first 11 months of 2019.
"We are seeing fierce competition for the very best CEO talent between venture capital and private equity firms that continue to realise whoever has the best talent wins," says Jeff Christian, CEO of Jeff Christian Partners.
"With venture capital beginning the year with USD400 billion in dry powder to invest (NVCA) and private equity with over USD2 trillion (Bain & Company), private equity firms will generally win out over VC firms for the very best CEO talent," Christian continues.
However, the study also recognises that the trend in the number of super-sized VC rounds of USD1 billion or more (25 in 2018, McKinsey) will likely continue in 2020 and contribute to the projected +20 per cent increase in VC- and PE-backed CEO compensation.
Of the more than 50 top CEOs and CEO candidates interviewed during the study, 72 per cent were interested in joining PE-backed companies versus 28 per cent attracted to VC-backed firms.
Those more interested in PE-backed companies saw much greater opportunities to monetise their equity in a shorter period of time.
According to Jeff Christian Partners, the hottest PE-backed consolidation plays attract the greatest number of extraordinary CEOs because they can monetise within three to seven years.
Jeff Christian Partners is the world leader in talent equity search, combining extraordinary leadership, market intel and capital in the building of great companies.