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The average total compensation, industry-wide, was $255,000, up 14% from last year’s figure of $224,000. The highest earners by title include CFO, Partner or Principal, Managing Director, and Vice President. Some of the biggest pay jumps are from Analyst to Senior Analyst, from Senior Analyst to Associate, and from Associate to Senior Associate.
We see these jumps in early career roles as standard in the industry. Where the standard breaks down is in the mid-level roles, especially when carry comes into play. Roughly speaking, a Partner earns four times what an Analyst earns, and twice what an Associate earns.
Last year 1 in 5 expected no change in comp; this year, it’s more than 1 in 4. The percentage expecting a decrease in comp has multiplied by a factor of six – 19 percent compared to last year’s minimal 3 percent. As a rough 2008 comes to a close, those private equity careers still expect a salary increase to $263,000.
Expectations are also modest relative to hedge fund careers. There, nearly half expected an increase of 15 percent or more, and more than 1 in 10 expected an increase of over 70 percent! In private equity careers, only 1.6 percent expected greater than 70 percent increases. Now, the hedge fund report data was collected prior to September 2008 and those expectations have surely been adjusted since then.
At the low end, expectations of the industry are still fairly high – fewer people each year expect to make under $150,000. Also, more people are expecting “Partner-level” income, in the $300,000 to 500,000 range.
We thought it would be interesting to take a look at hourly rates and see if we can draw any conclusions. The hourly earnings are in about the same proportion as total earnings, showing that the work burden (at least measured in hours) is equally distributed across the firm. Partner income is again four times Analyst, and twice Associate. The rate ranges from $40 to over $150 per hour.
back to 2008 Private Equity and VC Compensation Report
