2025 PE Executive Equity Report
2025 PE Executive Equity Report
Authors:
Kevin Dowd, Hamza Shad, Peter Walker, Janet Deng, Lucy Wang
Published date:
April 22, 2025
Data from more than 1,500 corporations and 500 LLCs that are backed by private equity firms sheds new light on how equity compensation works within the multitrillion-dollar industry.
Employee equity isn’t just for startups backed by venture capital firms. Increasingly, companies owned by private equity firms—a much larger source of private capital—are now also using equity as a key part of their compensation strategies, especially for management teams.
The ways that equity is used at these PE-backed corporations and LLCs can be quite different from how equity is deployed by VC-backed startups. It can also differ significantly from one PE-backed company to the next.
This report relies on data from more than 1,500 corporations and 500 LLCs on Carta that are backed by private equity firms to shed new light on how equity compensation works within this multitrillion-dollar segment of the economy. We examine several of the key variables and characteristics that can define an equity strategy, including different types of equity securities, different vesting schedules, the typical size of equity grants, and different performance conditions that might impact how and when equity grants ultimately vest. We particularly focus on equity granted to management teams, also referred to as executives, as these represent the leadership at PE-backed companies.
Consistent and reliable data around compensation at PE-backed companies can be notoriously difficult to find. This report aims to give decision-makers at these companies a new level of insight into how their peers and competitors across the private-market landscape are using equity to attract and retain high-end talent.
Highlights
Monthly vesting is more common at corporations than LLCs: About 63% of initial equity grants issued to executives at PE-backed corporations were on monthly vesting schedules, while 15% were annual. That stands in stark contrast to PE-backed LLCs, where 72% of initial executive grants vest annually and less than 10% vest monthly.
Most performance conditions are linked to financial returns: When equity grants issued to management teams at PE-backed LLCs come with performance conditions, the majority of those conditions—about 52%—are linked to MOIC, IRR, or some other metric that measures the financial return generated for the PE owner. A smaller segment of performance conditions are linked to achieving an exit.
Median grants to CEOs top 2% of equity: At PE-backed corporations, the median initial equity grant issued to a new CEO comprises about 2.6% of the company’s fully diluted equity. At PE-backed LLCs, the median initial grant issued to new CEO hires in 2024 was about 2.2% of company ownership.
PE-backed corporations
At both PE-backed corporations and VC-backed corporations, more than 50% of initial equity grants issued to executives in 2024 were in the form of incentive stock options (ISOs), and over 25% of grants were non-qualified stock options (NSOs). In recent years, ISOs have been growing more common among both populations.
Across the first half of the 2020s, PE-backed corporations have been much more likely than VC-backed corporations to issue restricted stock units (RSUs) to new executive hires. RSUs accounted for 16.5% of all equity grants at PE-backed corporations in 2024, down from 24.5% the year before.
This difference is perhaps to be expected. It’s a common progression for young startups to initially issue stock options to new employees, then eventually transition to RSUs as the company grows. As a company’s valuation increases, the strike price that employees would be required to pay to exercise their options grows commensurately higher.
Stock options and RSUs are both ways to give employees an equity ownership stake once certain vesting criteria have been met, but they function in different ways. While stock options give employees the option to buy equity shares in the company in the future at a predetermined price, RSUs convert directly to equity shares at no extra cost to the holder, besides any applicable taxes.
The median CEO hire at a PE-backed corporation receives an initial grant comprising about 2.6% of the company’s fully diluted equity. That’s six or seven times larger than the median equity grant for other C-suite hires at PE-backed corporations, which is about 0.4%.
Hires at the SVP and VP level typically receive far smaller initial grants than executives higher up the org chart. The median grant for CEOs is more than 1,000 times larger than it is for VPs.
In addition to these initial grants, many executives will receive additional equity grants in the future in the form of refresh grants or bonuses, increasing their eventual share of the equity pie.
Full report available: Start reading now for free
Our complete PE Executive Equity Report includes 15 more charts and analysis on grant percentages, industry breakdowns, vesting schedules, performance conditions, and more for executives at PE-backed corporations and LLCs.