How do headhunters get paid for senior positions?
My understanding is for junior and mid-level positions, headhunters generally follow one of two paths:
- Retained where they are in part paid for their time, but the basis is still a % of salary and expected or median bonus.
- Contingent where they are paid on completion of the search, and the basis is a % of salary and expected or median bonus.
In both cases, the %s are clear - somewhere between 20-33%, and all cash.
It would seem that it gets more complicated with senior searches. For example, a COO may have performance compensation that is many multiples of a small base salary, and have it paid over many years. Or a CEO may have a small base, but lots of equity with a long term vesting period. And does a headhunter who places a million dollar CEO really get 20-33%?
How is headhunter compensation based in these cases? Is it a flat fee that is high (because senior jobs take a lot of work) but less than the typical 20-33%? Do they take equity when helping startups? Or is there something else that I'm missing?
I would especially appreciate responses from headhunters, or folks who have hired them for senior positions.
For added context: When I hire a headhunter for a junior or mid-level position, I understand the economics and know how to push. Nudging someone from 33% to 25% is good business. If I push a headhunter to 10%, I know the service will be poor, because they accepted an off-market price. I've hired enough juniors that I understand the game. Hiring very senior people is a much more bespoke game. If the market standard is, "Pay up front whether you hire or not" then it's useful to have in mind. Or if the headhunter asks for equity, it will help to know if this is the market standard.