How much do PE- and VC-backed corporations differ in how they compensate team members? In Carta's new PE Executive Equity Report 2026, we dove into the data to explore this further.
For management teams – including vice presidents, presidents, and C-suite executives – we found that PE-backed corporations are more likely to incorporate cliffs into initial equity grants than startups are. 70% of exec grants issued by PE portcos had a cliff, compared to just 55% of those issued by startups.
This finding underscores how much executive compensation in private equity is structured around the alignment of incentives. Firms want senior employees to work on improving portco operations for at least a year before receiving any equity.
For less senior employees, cliffs are nearly ubiquitous, with close to 90% of initial grants incorporating a cliff at both types of companies. In most cases, the cliffs that exist for both management teams and employees last one year long and vest 25% of shares, as four year grants are still the norm across the board in private markets.
Check out the full 2026 report, which covers vesting schedules, CEO grant sizes, performance conditions, and more!
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Cheers,
Hamza Shad
Carta Insights
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