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January 03, 2008
Executive Recruitment Hinges on Entire Package: Compensation, Culture, Perks
The competition from publicly owned corporations versus privately owned companies in recruiting executive talent doesn't pose a major problem, according to 59 percent of private company CEOs when asked if they feel at a disadvantage.

A third quarter 2007 PricewaterhouseCoopers' Trendsetter Barometer reported this finding, noting that perhaps this is due to the performance of the stock market, since public companies rely heavily on equity programs for executives. The current state of the market may, in fact, ease some private companies' lack of stock options and other programs to offer to prospective executives as company perks.

According to the Trendsetter Barometer, CEOs of private companies that did not feel that they were at a disadvantage when recruiting executives highlighted some advantages that they thought they had over many publicly held corporations:

  • Company culture--92%
  • Organizational culture--73%
  • Work/life balance--72%
  • Geographic location--60%
  • Corporate responsibility--58%
  • Type of business--57%

"Clearly, these CEOs have determined that a competitive compensation program is the 'price of admission,' but still is just one element of the overall package," said Steven Slutsky, total compensation director with PricewaterhouseCoopers Human Resource Services practice.

According to the Barometer, 55% of the CEOs surveyed said that the current market for executive talent is competitive, and 33% said it's highly competitive. For the CEOs at privately held companies surveyed, the breakdown of total compensation was as follows:

  • Base salary--73.64%
  • Annual incentives--15.76%
  • Cash-based long-term incentives--5.49%
  • Equity-based long-term incentives--5.11%

The panel of 302 CEOs and companies that reported the information included in the Barometer was comprised of product and service companies. These companies were identified in the media as the fastest growing U.S. businesses in the last 5 years with the following demographic profile: average number of employees--190, average revenues--$37.1 million, and average 5-year growth--269%.

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