The role of a CEO is undeniably pivotal in steering a company towards growth, nurturing a winning culture, and fulfilling value creation goals.

Our work recruiting CEOs into software and SaaS companies sheds light on how CEO needs are evolving, especially in private equity backed companies.

Recently, there’s been a soaring demand for CEO talent, a clear signal that private equity sponsors are in pursuit of leaders who can swiftly drive the company to success. Nearly half of the recent CEO placements involve professionals embracing the role for the first time, suggesting a shift towards valuing fresh perspectives and dynamic leadership capabilities.

What Makes a CEO Stand Out?

The market craves CEOs who are not just leaders but visionaries capable of capital-efficient growth, especially in an era where capital comes at a premium.

High on the list is:

• Go-To-Market Gurus:

  CEOs who can supercharge sales and marketing teams to seize growth opportunities.

• Operational Wizards:

  The ‘General Athletes’ with the knack for lending their expertise across the board.

• Product Innovators:

  Leaders who are well-versed in developing and deploying market-winning products.

Compensation Trends: The Price of Leadership

In today’s tight talent market, CEO compensation packages have skyrocketed, reflecting the critical need for leaders who can execute growth strategies efficiently.

Our research and data demonstrates the typical CEO is commanding a significant premium in cash OTE over the typical C-suite Leader, ranging as high as nearly 75% over the non-CEO senior leaders — demonstrating the incentive to align them closely with the company’s long-term success.

Understanding and aligning compensation with the investment thesis is vital. Whether it’s gearing up for an acquisition or steering towards sustainable, cash-flowing growth, the design of the CEO’s compensation package can significantly influence the ability to attract and retain sought after talent.

M&A

In the intricate landscape of mergers and acquisitions (M&A), a CEO assumes the role of both a visionary and a meticulous planner. Their impact on M&A processes isn’t merely operational but can shape the outcomes of specific transactions and their company’s strategic future. A CEO’s experience navigating through the complexities of M&A – evaluating potential synergies, integrating leadership from acquired entities, orchestrating seamless transitions – is the make or break to success. This nuanced expertise enables them to foresee and mitigate potential challenges, ensuring that each acquisition is a step toward substantial, sustainable growth.

Evolving with Market Conditions

Recent trends indicate a decrease in CEO turnover, possibly due to market uncertainties or compensation challenges. However, this stabilization might also suggest that companies are giving leaders the time needed to navigate through challenging conditions and achieve their strategic objectives.

For CEOs, the current market presents unique opportunities for growth through acquisitions or preparing for future sales. Strategic investments in growth, operational excellence, and product development now can set the stage for outsized returns as market conditions evolve.

Path Ahead for CEOs

Our gathered insights highlight the critical trends shaping CEO roles in the private equity backed software and SaaS sectors. The emphasis on diverse backgrounds, importance of strategic compensation, and the evolving dynamics of CEO turnover and M&A activities paint a complex yet promising picture of leadership in times of change. For current and aspiring CEOs, these trends underscore the importance of adaptability, strategic vision, and operational excellence as they navigate their companies through the intricate landscape of private equity investment and beyond.

Author:
Katherine Baker
Partner

Based in Bespoke’s San Diego office, Katherine co-leads the CEO practice and is a GTM practice expert to help build the executive teams for private equity backed software and technology companies. Over the last 6 years Katherine has completed over 100 searches for firms such as WCAS, Francisco Partners, Clearlake Capital, Insight Partners, TA Associates, Providence Equity, and more.

Prior to joining Bespoke in 2017, Katherine focused on recruiting Finance executives across all industries including SAAS, Biotech, Energy, and Defense from Fortune 500 companies to start-ups. She has led dozens of placement searches that have resulted in portfolio company exits, and billions of dollars of total transaction value creation.