Equity compensation for senior management of private equity owned companies is very different from that of publicly traded companies. While both types of companies share a common principle of rewarding management based on an increase in shareholder value, fundamental differences in the investors and their potential holding periods drive divergent equity compensation practices.
This article, co-authored by James F. Reda and Michael S. Sirkin, was published in the June 2020 issue of Thompson Reuters’ Journal of Compensation and Benefits, and appears here with permission. It represents one of the few recent publications that reviews the differences in equity compensation among private equity owned companies and publicly traded companies.
