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With Public and Private Firms Competing for Talent, Have Executive Pay Packages Changed?

Compensation among private and public company executives is vastly different in both total value and the way rewards programs are structured. With private and public companies increasingly competing with one another for top talent, it’s important for boards to better understand these differences as they benchmark executive pay to the market and against a peer group of companies they compete with for executive-level talent.

To gain a sense of the compensation landscape for executive talent, we analyzed executive compensation data at nearly 450 public companies and more than 130 private companies that reported pay for 2019 to Aon’s Total Compensation Measurement Survey. Companies are based in the United States, span all industries and have a median revenue of $5 billion for the public companies and $1.3 billion for the private companies (see Appendix A for more details). Private companies in this analysis are generally companies that intend to remain private (e.g., family-owned businesses, S Corporations, non-profits, business units) rather than private equity or venture capital sponsored companies.

We found that total direct compensation for a CEO at a privately-held company trails publicly-traded companies by 40%. That premium is slightly lower for other private company executives who earn about 50% of their public company counterparts. However, as an organization’s revenue size increases, this gap narrows significantly.

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