How much does a HoldCo pay to Portfolio Co CEOs?

searcher profile

December 15, 2023

by a searcher in New York, NY, USA

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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commentor profile
Reply by a searcher
from Queen's University in Toronto, ON, Canada
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,
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Reply by an investor
from University of California, Berkeley in San Francisco Bay Area, CA, USA
Depends on location, cost of living, EBITDA and industry. Further assuming the company is not in tech and not in a high COL area, you are probably looking at $180-250k annual cash comp. Equity may or may not be part of the equation (often not expected in sleepy low-tech industries)
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