Private Equity Compensation 2015

While many other segments of the broader financial industry have struggled to fully regain their footing since the 2008 financial crisis, professionals working in private equity and venture capital have done quite well, with many firms seeking new talent and overall compensation rising.

This year, we’ve seen a moderation of sorts in the growth of both compensation expectations and satisfaction. While 2014 may not have been as strong of a year as we’ve seen in the recent past, this more moderate pace of growth may be more sustainable in the long run and offers optimism that above average prospects may continue for some time.

Work Increases but Private Equity Attitudes Remain Positive

This year we saw a considerable increase in the number of employees working greater than 70 hours per week. This is a departure from the last several years where we’ve seen declining average time worked per week in the private equity and venture capital sector. That said, at the same time we see increasing hours, employees are also receiving higher vacation allotments, though few take the full vacation amounts provided to them.

Gains in incentive compensation were particularly strong for those in large firms and managing large funds, and for those in the most senior levels of the organization. We found that most of our survey respondents were expecting an increase in their bonuses.

MBAs Still Earn More in Private Equity

While an MBA still provides an edge in compensation versus lesser-educated peers, this gap narrowed considerably this year. In our 2014 report a professional with an MBA could expect a 19 percent advantage in total compensation, this year that has narrowed to a slight advantage. Yet it remains that those with the graduate business degree do still carry an edge in landing the highest paying positions.

The Private Equity Job Market

Those professionals in the private equity and venture capital sector that are currently job hunting can take some comfort in increased hiring intentions in the coming year from our survey respondents. Firms looking for investment professionals jumped to 41 percent this year from only 34 percent in the prior year. And the skill set seeing the biggest surge in demand? Firms looking for accountants jumped to 25 percent this year from only 14 percent in last year’s survey.

Job Satisfaction Wanes

In this year’s survey, we found a decline in the overall number of professionals satisfied with their current compensation arrangements. Only 45 percent of respondents indicated that they were satisfied with their paychecks. This is not materially lower than last year’s report, however if you look back two years to 2013’s report, this is a large decline from the 56 percent that were satisfied with their pay in that year.

This year’s compensation report is primarily made up of responses from North America and the U.K., with 34 percent representing senior level positions and 43 percent representing mid-level positions.

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