Unravelling the Complexity of Executive Compensation Practices for Privately Owned Companies
Private companies face unique challenges in establishing appropriate compensation levels for executives, including a lack of quality data, unique ownership structures, governance structures that may not be fully mature, and stakeholders who may have limited related business experience.
- Lack of Quality Data: Private companies often struggle to find reliable — and appropriate — compensation benchmarks.
- Unique Ownership Structures: Variations include founder-owned, family-owned, employee-owned, and investor-owned companies, each with distinct needs.
- Governance Structures: Many private companies have evolving governance frameworks that may not fully support compensation decisions.
- Stakeholder Savvy: Stakeholders may lack the specialized experience needed to understand and support compensation strategies.
This report examines strategies that private companies can use to navigate these challenges and offers insights into establishing market pay levels, interpreting them for your company, and interfacing with stakeholders. The report explores key drivers of executive compensation using proprietary BDO survey data, outlines five compensation plan design pitfalls to avoid, and delves into the role of private company boards. Download the full report for valuable insights that private companies can use to create effective compensation strategies that support growth and success.
For additional discussion on this topic, please view our recent webcast: Compensation in Growth Environments: Avoiding Compensation Pitfalls While Scaling Your Privately Owned Business.