This marks the third year running for modest gains in the private equity and venture capital industry. However, these experienced professionals have conquered slow growth, high-priced assets, weak exit markets and unprecedented competition, to create the promise for increased earnings and expanded job opportunities.
As a result, fully 65 percent of this year’s respondents have voiced resounding optimism for increased earnings again this year.
This year’s compensation report has confirmed a number of trends, one of which is increasing base salaries and declining bonuses as a percentage of overall compensation.
It seems the correlation between bonus pay and firm performance continues to fade. Our surveys through 2013 had routinely confirmed the principle that outstanding performance is rewarded with great bonuses. In 2015, we saw this principle tested, in 2016, we saw it proved erroneous, and in 2017, it appears that the absence of correlation is the new normal. Once again, we are reporting that respondents employed in firms whose performance is down by ten percent or more; still anticipate bonuses averaging $33,000.
For the first time in the ten-year history of this report, we have identified movement in a positive direction with respect to the quality of training our respondents receive in-house. This is a welcome revelation, and one that we have been calling for these many years.
Our annual review of MBA vacation time, base and bonus compensation reveals a shift from last year in both base and bonus pay relative to non-MBA respondents.
This year’s report also confirms numerous truths that repeat year after year. For example, the clear correlation between pay and job satisfaction, the parallels between experience and earnings and the clear line that is drawn from responsibility for investment decisions to bonus pay.
For those seeking employment opportunities, we can tell you those disciplines in demand and those that are not. For example, 21 percent of firms in our survey have openings in accounting, but just 9 percent have openings in information technology.
We have also added several new graphs and charts that will provide greater insights into the complexities of compensation, as well as information specific to the types of firms covered in the report.
Additional highlights from this year’s report include:
• Eighty-eight percent of all bonuses are paid out annually and 28 percent of these annual bonus payouts occur in December.
• The most common investment strategy for 2016 is PE Small-Cap.
• The majority of firms calculate bonuses using a combination of criteria. Less than one-third of firms focus on a single criterion for bonuses.
• Again this year, those expecting the highest bonuses were not at the top end of the fund performance scale.
• This year we saw an increase of 5 percentage points in the number of firms with carried interest pools of less than 20 percent.
Get the Full Private Equity & VC Compensation Report
This year’s compensation report is primarily made up of responses from North America and the U.K., with about a third representing senior level positions and nearly a half of responses representing mid-level positions.
To learn more about compensation trends and benchmarks, you have 2 options:
1. Purchase this year’s full report at Private Equity & VC Compensation Report
or
2. Become a Private Equity Jobs Digest Premium member and get the complimentary version of the report for no charge.