Private equity rise 'to boost exec pay'

A global shortage of executive talent means private equity firms are no longer paying their top staff lower base salaries, says Hay Group Pacific senior consultant Karyn Johnson.

She said such higher base salaries combined with the performance-linked payments synonymous with private equity would increase "competitive tension" with listed companies.

"It's not going to be a compelling enough proposition for (private equity) executives to take a big cut in base salary for some upside that may result down the track," Mrs Johnson said.

The low level of disclosure required by private equity firms will make it difficult for listed companies to compare remuneration packages, causing them even more anxiety about what they pay there own people, she said.

In the United States, long-term performance-based payments make up more of an executive's total salary than in Australia.

According to Hay Group, this is due partly to the increased presence of private equity groups in the US placing upward pressure on the wider market.

Hay Group said that offshore private equity firms coming to Australia were becoming increasingly likely to fish for local talent.

There has been a surge in private equity deals in the past 12 months with offers made for the likes of Coles Group, Publishing and Broadcasting Ltd and Seven Network Ltd.