How much does a HoldCo pay to Portfolio Co CEOs?

by a searcher

7 months ago

Question for those in the know about HoldCo strategies.  Obviously, if your HoldCo owns multiple companies, you need to hire a separate CEO for each portfolio company.  What would the compensation package typically be for this position?  (Assume we're talking about a $1-4M EBITDA business.)

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4 comments

searcher from Queen's University

I would say, while a salary is necessary to attract a strong CEO, the bonus structure is an important component (whether just cash or with equity). You want your CEO focused on the priorities you outline (i.e. growth, driving bottom line improvements, customer retention, improvement in repeat customer rate...what ever it is) and compensate them when they attain those goals. If equity is part of the equation, instead of giving equity away day 1 to an unproven CEO, have them earn it for hitting milestones, this way you're getting something for the equity you're giving up. The structure will definitely depend on the niche, what you're looking for in a CEO (and the availability of strong CEOs) and a lot of other factors,

7 months ago | like reply | 0 likes

searcher from University of Alabama - Tuscaloosa

What amount of equity is the norm? 5%?

7 months ago | like reply | 0 likes

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