Highly paid executives have recently found themselves under increasing pressure from shareholder activism groups, and new SEC regulations only make their situation worse. While some of these executive pay concerns are justified, there are many instances in which high pay is justified. For example, successful CEOs that specialize in turn-around situations typically command a higher premium because of the increased risk. However, many members of the media and shareholder activism groups fail to differenciate these CEOs. This is causing many highly paid CEOs to migrate to private equity controlled companies, according to a report from the New York Times.

Private equity groups can offer these CEOs many benefits that are impossible to obtain at most public companies, but are often much more active in their oversight. For example, many private equity groups prefer to give CEOs a significant stake in the company, which can help them generate real wealth if the company performs well. However, if the company doesn't perform as expected, it is a lot easier for the PE group to fire the executive than it would be to oust them from a public company. Moreover, the executive may not see a lot of monetary gain if the company does not perform well. However, many highly paid executives in the world of public companies have excellent management ability, and therefore are more apt to take on such opportunities. The downside, of course, is that the move may draw an increasing amount of talent from public companies to private companies.