Private Equity Compensation
Guest Post from David Kochanek of JobSearchDigest.com:
Annually JobSearchDigest.com conducts a comprehensive compensation survey to discover insights into the changing landscape of private equity compensation. This is our third year producing the report and, given the turmoil in the financial markets during that time, we have seen many changes.
The 2010 Private Equity Compensation Report is based on data collected directly from hundreds of private equity and venture capital partners and employees in private equity jobs.
Overall, we saw small but positive movement in earnings from 2008 to 2009 and, despite industry rumblings about base salary freezes earlier in the year, the majority of that movement came in the form of increased base compensation. We also saw an increase in dissatisfaction with pay, which typically signals a stronger job market -- good news.
The annual average compensation for private equity and VC professionals was $208,000 USD with an average 3.5 weeks of vacation. On average, bonus levels were reported at 31 percent of total compensation and for those making more than $300,000 the bonus accounts for more than 40 percent of total cash compensation.
Each year we also take a look at earnings calculated on an hourly basis. The 2010 results are interesting but not all that surprising. Taking Associates as a base measure; Directors make twice what an Associate earns and Partners, Managing Directors and CFO's make 3 or more times that amount on a per hour basis.
Keep in mind when benchmarking compensation levels in private equity. common titles such as Manager and Analyst (or Senior Analyst) can mean very different things to different firms. This is especially true at smaller firms, where each person tends to
wear more hats than at their counter-parts at larger firms.
So, how many hours are private equity and venture capital professionals working and how does that correlate to earnings?
77 percent reported working between 50-70 hours per week on average and 10 percent work 40-50 hours per week. As a point of interest, VC respondents reported working 55 hours per week and PE or PE/VC respondents reported working slightly longer weeks at 58 hours on average.
Unlike in past years, this year the number of hours worked didn't necessarily correlate to overall compensation levels (with the exception of a small number of people who worked more than 90 hours per week).
About the Private Equity Compensation Report
The report on Private Equity Compensation is based on data collected directly from hundreds of private equity and venture capital partners and employees. Each year the results go deeper into the compensation practices of private investment firms.
Over the years, some of the participating firms included: 3i. Actis, American Capital. Babson Capital Management. Bain Capital. BlackRock. Deutsche Bank. EDC Equity, EdgeStone Capital Partners, Highland Capital Partners, Kaiser Permanente Ventures, North Atlantic Capital, RBS. Safeguard Scientifics, Time Warner Investments, Credit Suisse. Delta Partners Group, Intel Capital, and Soft Bank Capital.
About Job Search Digest
Since 2002, Job Search Digest has helped investment professionals be more effective with their job search. We know how valuable your time is, which is why we do the legwork for you. Every day our team tracks all online job sources (including the specialty niche sites) and captures the best Hedge Fund, Private Equity, Venture Capital and Investment Banking jobs out there - giving you a competitive advantage in your job search.