The pay premium for chief executives at private equity-backed companies fell from 72 percent in 2019 to 33 percent in 2025, according to seven years of compensation data analyzed by Chief Executive Group Research. The median PE-backed CEO earned $622,900 in total compensation in 2019, against $362,000 for the median CEO across all U.S. private companies surveyed.

By 2025, the premium had narrowed to roughly one-third, a sharp reversal from the near-90 percent peak recorded in 2021. That year, median PE-backed CEO compensation climbed to $844,500, compared with $445,000 for the overall private-company sample. The finding raises a central question for the industry: whether the financial advantage of PE-backed leadership has genuinely diminished, or whether the structure of executive rewards has simply shifted.

What does the data show year by year?

Chief Executive Group Research drew its findings from annual surveys of U.S. private companies covering 2019 through 2025. The trajectory of the premium breaks down as follows:

• 2019: $622,900 median PE-backed CEO pay versus $362,000 overall — a 72 percent premium
• 2020: the premium held substantial at 62 percent
• 2021: the premium reached nearly 90 percent, with PE-backed median pay of $844,500 against $445,000
• 2022: the gap narrowed sharply; PE-backed median pay fell to $546,000, a 32 percent premium
• 2023: 27 percent
• 2024: 33 percent
• 2025: 33 percent again

The collapse between 2021 and 2022 defines the story. PE-backed median compensation dropped by nearly $300,000 in a single year, from $844,500 to $546,000, while the premium has since remained in a narrow band between 27 and 33 percent.

Why did the premium shrink?

The simplest explanation — that private equity firms have become less generous — finds no direct support in the data. The research does not confirm that conclusion, but it does not exclude it either.

The mechanics of total compensation offer a more precise lens. Total compensation, as measured in the surveys, includes base salary, bonuses, benefits, perks, equity grants and equity appreciation. These components behave very differently from year to year.

Equity appreciation carries particular weight. The value of executive ownership stakes can rise sharply when business valuations climb, then retreat when market conditions change. Executives whose packages include substantial equity participation therefore experience more volatile total compensation than their peers.

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

Equity gains alone do not explain the shift. The research found that the premium has fallen even when controlling for equity gains, indicating that several factors may be at play.

What does this mean for PE firms and CEOs?

The findings pose what the research describes as a critical question for private equity firms: 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 that PE ownership requires?

The answer does not necessarily involve raising pay. The research suggests it may mean communicating incentive value more effectively, or ensuring that executive rewards align closely with achievable business outcomes.

For CEOs weighing a move into PE-backed leadership, the traditional proposition remains formally intact: accept ambitious performance targets, help build a more valuable enterprise and participate financially in the results. PE-backed executives still earn substantially more than the overall private-company median — roughly a third more as of 2025.

But the scale of that advantage has changed materially since the pandemic era. The relevant question, as the research frames it, 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.

Chief Executive Group Research publishes further benchmarks by company size, industry and ownership structure in its latest CEO & Senior Executive Compensation Report.