Senior GPs project smaller bonuses

Private equity firms' senior echelons are expecting smaller bonuses for their work in 2011 compared to 2010, according to a compensation survey exclusive to PE Manager. 

On average, senior GPs are projecting some $929,000 in bonuses for their work in 2011. If correct, the amount would mark a drop from the $984,000 average bonus reported in 2010, according to the survey which was presented earlier this year at the 9th Annual Private Equity International COOs and CFOs Forum in New York. 

The results chime with a 2011 preliminary year-end report from data provider Dealogic which showed the total value of global buyouts slumping 9 percent in 2011 to $186.4 billion; and exit activity down 6 percent in 2011 to $213.5 billion.

A senior GP's total cash compensation in 2011 was on average $1.4 million, comprised in part by a $793,000 base salary. Performance-based carried interest payments, seen by investors as the portion of compensation aligning interests with investors, made up just over one fifth of senior GPs’ compensation.  

The results further show compensation figures to be influenced by the size of the GPs’ firm. Top dealmakers working for firms managing less than $1 billion commanded on average $1 million in total cash compensation last year. In comparison, firms managing between $2 billion to $5 billion paid their senior GPs roughly twice that figure. 

The figures however pale in comparison to the payrolls of industry titans. Earlier this year The Carlyle Group reported that founders David Rubenstein, Daniel D’Aniello and William Conway each took home about $134 million a piece in cash distributions from the firm, according to a regulatory filing. The founders also each received about $3.8 million in total compensation in 2011, consisting of base salaries of $275,000, bonuses of about $3.5 million and compensation in the form of retirement account contributions from the firm.

The compensation survey will be presented and examined in more detail in the March edition of Private Equity Manager.