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Total cash compensation for senior executives continued to rise in 2013 and became more closely tied to outcomes and performance, according to executive recruiting firm Private Equity Headhunters’ executive compensation survey.
“Experts say the changes in executives’ total cash compensation are indicative of employer’s shift from fee-for-service toward a value-based reimbursement model because they are linked to performance on quality and outcomes,” said Frank Weston, chief operating officer of Private Equity Headhunters. More than 90 percent of the executives who participated in the survey said they preferred the incentive-based packages.
Average total cash compensation increases included:
- CEOs increased by 7.2 percent, from $925,400 in 2012 to $992,000 in 2013
- COOs increased by 3.2 percent, from $532,700 in 2012 to $549,700 in 2013
- CFOs increased by 5.5 percent, from $415,500 in 2012 to $438,400 in 2013
Executives placed in manufacturing and technology portfolio companies backed by large private equity firms saw the largest increase in compensation, with their overall cash compensation increasing by 8 percent from 2012 to 2013.
Executives placed at mid-level companies saw average increases of 3.2 percent from 2012.
The study used data from 2012 and year-to-date 2013 to determine average compensation levels for senior executives Private Equity Headhunters served in 50 job positions in 28 separate industries/disciplines. Total cash compensation in the survey included base salary, bonuses and incentives.