Benefits September 21, 2007

Company Culture, Work/Life Balance Win Exec Talent for Private Cos.

September 21, 2007 (PLANSPONSOR.com) - Despite feeling the pressure of competing with public companies for executive talent, the majority of private companies say they are up to the task.
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In a press release from PricewaterhouseCooper’s (PwC) about the results of its Trendsetter Barometer, PwC said 55% of private company CEOs surveyed rank the current market for executive talent as “competitive,” and 33% rank it as “highly competitive.” However, 59% of respondents said they do not feel disadvantaged when competing against public companies.

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Private company CEOs said their advantages in the market for executive talent include:

  • Company culture – 92%,
  • Organizational structure – 73%
  • Work/Life balance – 72%,
  • Geographic location – 60%
  • Corporate responsibility – 58%, and
  • Type of business – 57%.

When it comes to pay, private companies tend to lean more on cash than equity. Forty-three percent of “Trendsetter” firms provide both equity and cash compensation, while 57% provide cash only, according to the press release. The survey found the typical pay mix for private company executives is:

  • Base salary – 73.64% of total compensation,
  • Annual incentives – 15.76%,
  • Cash-based long-term incentives – 5.49%, and
  • Equity-based long-term incentives – 5.11%.

Half of firms benchmarking against public companies said they are providing similar levels of cash-based incentives as public firms, but only 28% said they are providing competitive equity-based incentives. While 69% of all respondents offer an annual incentive of some kind, only 43% offer long-term incentive-based compensation to their employees. Of those, 69% offer equity-based incentives and 54% offer cash-based incentives.

Similar to public companies, the survey found that privately-held companies offer a mix of stock options, restricted stock, phantom stock, and other equity vehicles as long-term incentive compensation. The most popular was stock options, offered by 58%.

PricewaterhouseCoopers’ Trendsetter Barometer tracks the business issues of privately-held companies identified in the media as the fastest-growing U.S. businesses. It incorporates the views of 302 CEOs interviewed between January 23, 2007 and April 30, 2007.

The PwC Barometer surveys can be found here .

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