Private equity groups are working hard to recruit senior executives away from public companies, offering more money and a chance to leave behind the short-term pressures that are part of dealing with the capital markets.
According to the Financial Times, the PE groups want strong business leaders to manage the companies they've been taking over. On the flip side, the incentives they offer - and the demands of corporate governance, compliance and the markets' concern with short-term performance - make it more difficult for public companies to recruit and retain the best talent.
"I think this is a real issue for public companies," Kevin Conway, managing partner at buyout group Clayton Dubilier & Rice told the FT. "I don't think it is a crisis yet but it is a real issue, especially because private equity focuses on the very best, most talented and most experienced managers."
Marc Lipschultz, a partner in the buy-out firm Kohlberg Kravis Roberts, said executives like being able to "spend much more of their time on long-term business building rather than on quarterly earnings." More than a third of KKR's 29 top managers have been chief executives or chief financial officers of public companies, the FT said.