Comparing compensation

Hiring talent invariably involves a discussion on compensation. And negotiations can be tricky if fund managers are unaware of what rival firms can offer candidates. That’s why each year PE Manager takes a look into the compensation levels of private equity professionals, specifically those who are responsible for help managing the firm.

With nonpublic data provided by compensation consultants J.Thelander – who polled roughly 100 private equity and venture capital firms predominately in the US about their compensation packages – the following pages contain a snapshot of how much money (including base pay, bonus and carry) firms are paying their partners and staff.

And it’s not just senior executives who are given attention. Compensation stats are provided on a range of professionals including pre-MBA associates, general counsel and fund accountants.

As the data in the following pages show, one of the primary determinants of pay in the private equity industry appears to be the size of the firm one works for. Average compensation figures are offered for various professions across all firm sizes, but pay averages are also broken down between firms with $1 billion or more in total assets under management and firms that manage less. Smaller firms generally have smaller budgets to work with. However, the data reveals their compensation trends do not deviate too far from what large firms are paying.

The 2013 compensation survey additionally reveals that more senior positions have greater volatility in pay relative to more junior roles at the firm. Recruiters say firms are generally more flexible in compensation packages for senior positions because not hiring a top performing dealmaker or chief compliance officer comes with greater risk. To account for the varying levels of volatility across professions, the data provides both the average and median pay levels of each position.

Subscribers who are interested in comparing and contrasting this year’s compensation survey with those of years past are invited to visit our archives on privateequitymanager.com where past survey data is stored. For more comprehensive compensation data around a particular private equity profession, readers should email Jody Thelander at jt@jthelander.com. Enjoy the survey, which also includes an interesting look into fee models, GP commitments and some other indirect factors that may impact compensation at the private equity firm.

CLICK HERE FOR THE SURVEY