PERE CFO: Top dealmakers trump CFOs in pay(2)

A firm’s top investment professional has a slight edge over its top financial executive in terms of compensation, according to survey results revealed at the PERE CFO Forum.

A general partner’s chief financial officer may be in charge of managing a firm’s dollars, but that person on average earns less than the executive overseeing all of the firm’s deals.

The largest salary allocations for CFOs came at both ends of the pay scale, according to a compensation survey presented by Robert Baron and Neil Golub of executive search firm BCGI at the PERE CFO Forum in New York yesterday. Twenty-five percent of chief financial officers collected total compensation, including long-term incentive plans, between $100,000 and $250,000 in 2013, while nearly 22 percent earned total compensation of more than $750,000. Almost 44 percent of CFOs received compensation between $100,000 and $350,000.

The size of the total compensation package was strongly correlated to a GP’s assets under management. For example, about 65 percent of CFOs at firms with less than $500 million of AUM garnered between $100,000 and $250,000, while nearly 50 percent of CFOs at companies with AUM exceeding $5 billion received compensation of more than $750,000. Also, 90 percent of CFOs at the very top end of the pay scale also were entitled to carried interest, compared to half of those who earned less than $250,000. The survey also showed some correlation between compensation and the GP’s location, as none of the CFOs earnings less than $250,000 in 2013 were based in New York.

The results showed a similar barbell effect for the total compensation of transaction heads. The largest salary allocation in this category was more than $750,000, accounting for more than a quarter of respondents. This was followed by top deal professionals earning between $100,000 and $250,000, representing almost 20 percent of survey participants. All other salary ranges for heads of transactions each represented 5 percent to 10 percent of respondents.

Nearly three-quarters of controllers ranged between $100,000 and $300,000 in total compensation. In asset management, 44 percent of division heads commanded pay in that range, while 22 percent of executives collected more than $500,000. Meanwhile, 45 percent of heads of investor relations earned total compensation between $100,000 and $300,000, and 25 percent of senior professionals in that role garnered packages of more than $500,000. All of the highest-earning IR executives were employed at firms that managed more than $1 billion in assets.

Fifty-five North American real estate managers participated in the survey conducted by BCGI. The majority of the respondents were CFOs, while chief operating officers, managing partners and investor relations professionals made up the remainder. In excess of 30 percent of participating firms had total AUM between $1 billion and $5 billion; more than 25 percent with $500 million to $1 billion; 20 percent with less than $500 million; and nearly 15 percent with more than $5 billion. Forty-six percent of respondents were based in major cities such as New York, Boston, San Francisco, Washington DC and Dallas.