The Private Equity CEO Pay Premium Has Shrunk by More Than Half

By 2025, the median CEO of a private equity-backed company earned just 33 percent more than the median private-company CEO, down from a 72 percent premium in 2019. The finding comes from Chief Executive Group Research, which analyzed seven years of CEO compensation data, 2019 through 2025, drawn from its annual surveys of U.S. private companies.

The numbers tell a story of boom and retreat. In 2019, the median PE-backed CEO earned $622,900 in total compensation against $362,000 for the overall private-company sample. The premium held at 62 percent in 2020, then surged to nearly 90 percent in 2021, when median PE-backed CEO pay climbed to $844,500 versus $445,000 for the broader group.

Then the gap narrowed sharply. In 2022, median PE-backed CEO compensation fell to $546,000, leaving a premium of 32 percent. Since then it has been remarkably stable: 27 percent in 2023, 33 percent in 2024 and 33 percent again in 2025.

The result raises an obvious question. Has the financial advantage of PE-backed leadership genuinely diminished, or has the way executives are rewarded simply changed?

What does the pay premium consist of?

Total compensation, as measured in the surveys, includes base salary, bonuses, benefits, perks, equity grants and equity appreciation (the change in value of shares an executive already holds). These components can behave very differently from year to year.

Equity appreciation is the volatile element. Ownership stakes can swell dramatically when business valuations rise, then retreat when market conditions change. That makes total pay inherently more volatile for executives whose packages include substantial equity participation.

What explains the 2021 spike?

The simplest explanation would be that PE firms have become less generous. The data does not support that conclusion, though it does not deny it either.

The conditions of 2021 are particularly relevant to the numbers. That period featured strong business recoveries, elevated transaction activity and significant valuation increases across parts of the private market. Those conditions may well have inflated the reported value of executive equity in that year's figures.

But this is only one possible factor. Several forces may be at play, and even when controlling for equity gains, the premium has still fallen.

What does this mean for talent recruitment?

Whatever the cause, the findings pose a critical question for PE firms, as the research itself frames it: if the annual compensation premium over other private companies has narrowed, is the potential for long-term wealth creation still sufficiently clear and compelling to attract the leadership talent required?

The answer does not necessarily involve paying more. It may mean communicating incentive value more effectively, or ensuring that executive rewards are closely aligned with achievable business outcomes.

PE-backed executives still earn substantially more than the overall private-company median; a one-third premium is hardly charity. Yet their advantage is considerably smaller than it once was. The pre-pandemic era of outsized, near-double pay gaps appears to be over, at least for now.

For CEOs and investors alike, the relevant question may no longer be simply how much more PE-backed executives can earn. It may be how much value they have the opportunity to create, and how much of that value they stand to receive.

The verdict, for now, is measured: the premium has not vanished, but its 2021 peak looks increasingly like an artifact of the market cycle rather than a durable feature of private equity ownership.