Yale Case. By: Daniel Lazier, Alex Schneider, and A. J. Wasserstein
A new Yale study examines one of the most important, and least explored, questions in ETA: how much money do ETA CEOs actually make?
The study analyzes 181 ETA CEOs whose companies reached a liquidity event, looking at both cash compensation and equity proceeds. The headline figures are striking: the median CEO earned $200k per year and, among those reporting an exit, received $6M in personal equity proceeds. However, the authors stress that the sample represents a “winners’ circle” and should not be interpreted as the expected outcome for a typical searcher.
Who are the ETA CEOs?
The typical CEO in the sample was a mid-career professional, with 88.8% holding an MBA and 80% having at least four years of operating experience. Finance, private equity, investment banking, management and operations were the most common backgrounds.
Traditional funded searches represented 67.4% of the sample, while 19.3% were self-funded. Solo searches were also more common than partnerships. Business services was the largest acquisition sector, followed by software and tech-enabled businesses and blue-collar services.
Equity is where the big money is
The median CEO ownership stake was 20%, but this varied dramatically by search model. Self-funded CEOs held a median 75% stake, compared with 18.5% for traditionally funded searchers.
Despite this difference, ownership percentage was not the main driver of personal wealth.
The median CEO received $6M in equity proceeds, but outcomes were highly concentrated. The top 10% of CEOs captured 37% of total proceeds, while the largest individual payout reached approximately $62M.
The strongest relationship was instead between exit EBITDA and personal proceeds. CEOs exiting businesses with more than $10M of EBITDA received median proceeds of $14.9M, compared with $1.8M for those exiting businesses below $2.5M of EBITDA.
Salary: a meaningful but modest premium
The median annual CEO salary was $200k compared with $150k before entering ETA—a 31% increase. However, 28% of CEOs actually took a pay cut.
The trade-off was particularly clear for self-funded searchers: their median salary decreased by 16.3%, while traditionally funded CEOs experienced a 50% increase. Self-funded entrepreneurs therefore sacrificed current income in exchange for significantly greater ownership.
Size matters more than ownership
Perhaps the study’s most important finding is that the size of the business matters more than the size of the CEO’s equity stake.
Personal proceeds had a 0.68 correlation with exit EBITDA, compared with just 0.30 with ownership percentage. Moreover, among factors observable before the acquisition, entry EBITDA was the only variable significantly associated with eventual personal proceeds.
This suggests a simple lesson for searchers: owning 50% of a small company may be less valuable than owning 15–20% of a much larger one.
The bottom line
The study paints a picture of ETA as a model where equity—not salary—is the primary source of wealth creation, but where the biggest determinant of that wealth is ultimately the size of the business built.
For prospective searchers, the message is clear: focus not only on how much of the company you own, but on the quality and scale of the business you acquire and grow.
At the same time, the authors’ “winners’ circle” warning is critical: these figures describe CEOs who successfully acquired a company and reached liquidity. They do not represent the probability of achieving these outcomes for the average ETA entrepreneur.
Read the full case in: https://som.yale.edu/sites/default/files/2026-08/How%20Are%20ETA%20CEOs%20Really%20Faring.pdf
