Private Equity Compensation 2016

Although 2015 will not go on record as a banner year for private equity and venture capital firms, they did turn in a solid performance which resulted in compensation gains and enhanced job opportunities for professionals in the field.

Private equity and venture capital professionals saw a repeat of the modest gains posted in 2014 but that has not dampened optimism for the majority of our respondents, as fully 65 percent of survey respondents expect to see an increase in cash earnings this year.

Salaries Increase but Private Equity Bonuses Level Off

One development of particular interest in 2015 is that bonuses represented a diminished role in overall compensation. At the same time, we saw base salaries rise across all pay bands.

This year we also see the continuation of a shift to compensation parity across all firms without regard to size. This trend is even more pronounced when bonus pay is stripped from the equation and the comparisons are made on the basis of salary alone.

Private Equity Compensation Tied to Performance?

In our surveys through 2013, clear correlations existed between fund performance and bonus expectations. Last year, we saw the line drawn from performance to expectation blur. In 2015 it can only be described as extremely fuzzy, best exemplified by the fact that respondents, whose funds were expected to be down 10 percent or greater, still expected, on average, a $43 thousand bonus.

The MBA Advantage

The impact of an MBA on an individual’s earning power has long been the subject of debate. The graduate business degree will not necessarily garner its holder a larger bonus. However, the base salary for the MBA is 10 percent greater than without one. Not surprisingly, the degree played no part in the amount of vacation awarded. That said, having an MBA gives a decided edge in getting one’s foot in the door and being in a better position to command a higher starting base salary.

Training Provided and Private Equity Pay Satisfaction

Once again this year training continues to be non-existent in the firms of 40 percent of our respondents, while a paltry 16 percent report a pretty good to excellent training experience.

Looking at satisfaction with compensation, this year’s survey revealed that only 45 percent of respondents were content with their pay. This is the same percentage we reported in last year and well below of the 56 percent of respondents that expressed satisfaction two years prior.

In last year’s report we offered 2 possible reasons for the decline: 1) a stronger job market which left employees wondering if they could earn more at another firm, and 2) the significant increase in hours worked caused employees to feel under-compensated. This year’s findings eliminate the second possibility.

Get the Full Private Equity & Venture Capital 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


2. Become a Private Equity Jobs Digest Premium member and get the complimentary version of the report for no charge.