What Executive Search Costs in CPG (And What Drives the Number)

Nobody puts this on a website, which is strange, because it is the first question every founder asks. Not "how do you source candidates" or "what is your process." It is "what is this going to cost me?"

So here is a straight answer, including the parts that usually only come up on a call.

The Short Version

For a CPG or food and beverage leadership hire, retained executive search is commonly quoted at 25 to 30 percent of the role's first-year compensation. On a $200,000 role that lands somewhere around $50,000 to $60,000. On a $350,000 C-suite package, closer to $90,000 to $105,000.

That is the number people quote. It is also the least useful part of the answer, because two firms quoting "25 percent" can send you invoices that differ by thousands of dollars. The percentage is not where the money moves.

What the Percentage Is Calculated On

This is the first thing to pin down, and it is routinely glossed over.

Some firms quote against base salary. Some quote against first-year total compensation, which folds in bonus and sometimes equity. Those are very different denominators.

Run it on a VP of Sales at a $200,000 base with a 30 percent target bonus:

• A 30 percent fee on base alone is $60,000.
• A 25 percent fee on total compensation of $260,000 is $65,000.

The firm quoting the lower percentage is the more expensive one. If you are comparing two proposals and only looking at the percentage, you are not actually comparing them. Ask both firms what figure the percentage applies to, in writing, before you decide anything.

The Part That Catches People Out

Here is the structural problem with how most of this industry prices, and it has nothing to do with whether a given firm is honest.

At most firms, the fee is a percentage of whatever the hire ends up earning. Which means nobody knows the real number until the offer is accepted. You budget against an estimate, and the invoice arrives later.

Now think about what happens during the negotiation. Your finalist pushes for more money. You stretch to win them. The search firm's fee goes up, because your hire got more expensive.

Scope a VP role at $200,000 and plan for a $50,000 fee at 25 percent. Your finalist negotiates to $230,000. The fee is now $57,500. You are $7,500 over budget on a line item you thought you had fixed, and the firm advising you through that negotiation earned it.

I am not suggesting most recruiters consciously inflate offers. Plenty do not. But you should not have to rely on your advisor ignoring their own incentive, and most clients quietly suspect the incentive is there. They are not wrong to.

The fix is simple and almost nobody does it: agree the compensation figure the fee is calculated on, in the contract, before the search starts. Then the fee is a known dollar amount on day one and the negotiation has nothing to do with it. That is how we structure ours, and it is worth asking any firm you are considering whether they will do the same.

Where Contingency Fits

Contingency recruiting looks cheaper. The headline percentage is usually lower, and you pay nothing unless you hire their candidate. For the right role, that is a perfectly good deal.

The catch is what the model rewards. A contingency recruiter is paid only on placement, often while racing other firms for the same role. That rewards speed and volume: the candidates already applying, sent fast, rather than three weeks spent headhunting the operator who is not looking at all. For a mid-level role with a deep active pool, fine. For a leadership hire where the person you want is currently employed and content, it is the wrong instrument. We walk through that tradeoff in detail in retained vs. contingency search.

What Else Shows Up on the Invoice

The fee is not always the whole bill. Before signing, ask explicitly about:

• Expenses. Some firms bill back research, database access, advertising and travel. Ask whether expenses are included, capped, or open-ended.
• Candidates you already knew. If someone already in your pipeline gets hired, do you owe a fee? Get the names written into the agreement up front.
• The guarantee, and its length. Most guarantee windows close at 90 days. A senior hire is often still finding the building at 90 days. Ask what happens at month six.
• What a restarted search costs. If the guarantee triggers, is the rerun genuinely free, or do expenses restart?

The Comparison That Actually Matters

Most founders benchmark the search fee against other search fees. That is the wrong denominator.

The right one is what the seat costs you empty, or filled by the wrong person. SHRM's benchmarking puts the average direct cost to fill an executive role near $36,000, against roughly $5,500 for a typical position, and the direct spend is the smallest part. A mis-hired VP at a $250,000 package runs into severance, a second search, months of lost momentum, and the quiet damage to a team that watched it happen. We put real numbers against that in the real cost of a bad VP hire.

Against that, a $55,000 fee is not the expensive line. The expensive line is doing it twice.

How to Evaluate a Fee in One Conversation

Four questions. Any firm worth hiring will answer all four without flinching:

• What is the percentage calculated on — base, or total compensation?
• Is that figure fixed when we sign, or does it move with the final offer?
• What triggers each installment — a date on a calendar, or a deliverable I can see?
• How long is the guarantee, and what exactly does it cover?

The answers tell you more about how a firm will behave over ten weeks than any pitch deck will. A firm that gets vague on question two is telling you something.

Common Questions

What does a retained executive search cost?

For a CPG or food and beverage leadership hire, retained search fees are commonly quoted at 25 to 30 percent of the role's first-year compensation. On a $200,000 role that is roughly $50,000 to $60,000. The percentage matters less than two other things: what the percentage is calculated on, and whether the number is fixed before the search starts or floats until the offer is signed.

Is an executive search fee based on salary or total compensation?

It varies by firm, and the difference is real money. A fee quoted on total first-year compensation includes bonus and sometimes equity, so a 25 percent fee on a package can cost more than a 30 percent fee on base alone. Always ask which figure the percentage applies to before comparing two quotes.

Why does an executive search fee go up after the offer?

Because at most firms the fee is a percentage of whatever the hire ends up earning, and nobody knows that number until the offer is accepted. If your finalist negotiates a larger package, the fee rises with it. The firm earns more because your hire cost you more.

How much does a contingency recruiter cost compared to retained search?

Contingency fees are typically lower as a headline percentage and are only paid if you hire the firm's candidate. The tradeoff is that contingency firms work non-exclusively and are paid to win a race, which rewards speed and volume over depth. For a leadership role where a mis-hire is expensive, that incentive is usually the wrong one.

Is a retained search fee worth it for a smaller CPG brand?

It depends on what the seat costs you empty or filled wrong. A mis-hired VP at a $250,000 package can cost several times the search fee once you count severance, the second search, lost momentum and team damage. The fee is the visible number; it is rarely the biggest one.

The Bottom Line

Executive search in CPG costs what it costs, and the range is not really the story. The firms worth your money are the ones that will tell you the number, explain what it is calculated on, and put it in writing before the work starts rather than after the offer lands.

If you want to sanity-check what a role should pay before you scope any of this, our compensation benchmarks are free and public. And if you want a fee structure written down rather than described on a call, ask us for ours and you will have it in writing before you commit to anything.