Buyout Compensation To Grow By Mere 1% While Staffing To Increase

Many PE firms are expected to increase their hiring or hold their staff steady over the next year while compensation is set to increase by roughly 1%.

Don’t get too excited about the increased staffing. Any hiring is likely to be below the partner level, according to FINS, the finance career site of the Wall Street Journal. In today’s uncertain fundraising environment, firms find lower-level professionals attractive because they’re cheaper and less risky.

Pay growth is also expected to increase modestly, particularly at large firms. Associate compensation, including salary and bonus, is expected to remain the same as 2009 or increase by only 1% to 2%.

Associates at buyout shops will make about $203,000 in annual compensation (including salary and bonus), a 1% gain over the $201,000 they made in 2009, according to a FINS chart. The same is true for senior associates ($313,000 in 2010 vs. $311,000 in 2009), vice presidents ($430,000 vs. $424,000), principals ($567,000 vs. $562,000) and partners ($1.5 million vs. $1.48 million), which are expected to see their compensation grow by 1%, according to FINS.

Here is a link to the FINS chart.