While cash incentives predominate, companies managing toward a liquidity event tend to also offer equity, including stock options, often with their entire employee population eligible. But in most cases, shares cannot be cashed out until the liquidity event occurs.

"Of necessity, private companies have become increasingly creative with incentive-based compensation," said Rich Calzaretta, leader of PricewaterhouseCoopers’ U.S. Private Company Services practice. "Cash-based incentives are a staple, with equity-based incentives most often added if a liquidity event is planned."

Looking ahead, 66 percent of surveyed companies expect to stay private; 20 percent are managing toward a liquidity event. The remainder are not sure or did not report. Virtually all those envisioning a liquidity event (86 percent) expect it will occur within the next five years.

"Companies planning to stay private generally don't grant equity, whereas most moving toward a liquidity event, do," said Carl Weinberg, a principal with PricewaterhouseCoopers' Human Resource Services practice. "But companies granting equity tend to not permit cash-out until the liquidity event occurs. The employees must wait for their payoff, just like the owners."

Cash-based incentives, offered by 89 percent of all surveyed companies, may include awards for long-term performance, bonuses, commissions, and other components. For the most part, use of these and other plan elements is comparable for companies planning to stay private and those moving toward liquidity, with one exception: share value-based stock appreciation rights are offered by 23 percent of those managing toward a liquidity event, but by only seven percent of those intending to remain private:

Private companies are offering highly competitive compensation packages tailored to their business strategy and needs -- to attract individuals who can make a significant difference in their business, and for retaining and motivating key employees," said Calzaretta.

The PwC "Trendsetter Barometer" is developed and compiled with assistance from the opinion and economic research firm of BSI Global Research, Inc.