Private equity and venture capital firms are having another bang up year.
That’s according to the 2020 Private Equity and Venture Capital Compensation Report, which shows that private equity and venture capital compensation is up again this year, marking the sixth straight year of compensation gains.
Those reporting total compensation greater than $200,000 reached 68 percent of respondents, the highest percentage of professionals reporting this level of annual compensation in the history of the report. Across all job titles, private equity and VC professionals anticipated an increase in total compensation.
“Unlike recent years, we are seeing a closer correlation between increased compensation and greater fund performance,” said David Kochanek, Publisher of PrivateEquityCompensation.com. More than half of funds were up 10 to 24 percent this year.
On average, base pay represents 55 percent of compensation and bonus pay totals 45 percent. Although bonus pay has been declining as a percentage share of total compensation for those in the highest pay ranges since 2014, bonus pay is significantly higher at larger firms with more than 100 employees.
The research shows that private equity bonus pay is typically calculated based on a combination of several factors: firm performance, fund performance, and individual performance. The largest bonus payouts are achieved based on fund performance in firms with more than $1 billion of assets under management.
For private equity job seekers, the 2020 Private Equity and Venture Capital Compensation Report provides additional detail such as positions in demand, percentage of firms hiring, where firms are cutting back and where career opportunities are increasing. This additional data also helps investment firms understand the competition for talent in the private equity and venture capital marketplace.
More than half of firms are hiring investment professionals. But, despite a continued demand for talent and higher reported compensation, more than half of respondents said they are dissatisfied with their overall compensation.
“Firms need to better understand internal satisfaction with their compensation levels, training programs and work environments,” said Kochanek. “Or, they risk losing talented professionals because, in this private equity job market, people have options.”
About The Report
The 2020 Private Equity and Venture Capital Compensation Report is based on data collected directly from hundreds of private equity and venture capital partners, principals and employees.
The report, in its thirteenth year of publication, is widely regarded to be among the most comprehensive benchmarks for private equity and venture capital compensation. It provides independent and impartial data covering a broad range of salary, bonus, carried interest and other compensation-related information, sourced directly from professionals working within the industry.
The full report is available for purchase at http://www.PrivateEquityCompensation.com and can be downloaded instantly in PDF format.