Firms & Funds

Typical mid-level PE exec earned $457K in cash pay in 2015: survey

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PEPG, Private Equity Principal Group, Preqin, compensation, management, private equity
Chart courtesy of PEPG
  • Principal at firm with at least $1.1 bln averaged $567,857
  • VPs averaged $380,833
  • Principals got an average of 2 pct carry

The average cash compensation for mid-level executives at middle-market private equity firms in 2015 was $456,904, as reported by 22 respondents in a survey earlier this year by Private Equity Principal Group.

Cash compensation (salary and bonus) for principals was highest, at an average of $567,857, while vice presidents earned an average of $380,833, the survey said. Principals averaged a 2 percent slice of carried interest, while vice presidents averaged 1 percent, the survey said.

Around 79 percent of respondents reported satisfaction with their compensation in 2015, with an average increase of about 6 percent versus the prior year, the survey said. Respondents expected a 7 percent compensation increase in 2016, the survey said.

Chart courtesy of PEPG
Chart courtesy of PEPG

The average survey participant was a vice president working at a firm of 11 to 30 employees for three years, with a fund size of $1.1 billion, according to the survey metrics. About two-thirds of participants completed graduate school and, on average, worked on Wall Street for five years or less, the survey said.

The findings from the small sample dovetail with findings in a larger study by alternative-assets-data provider Preqin. Around 47 percent of private capital firms increased firmwide base salaries in 2015 and 2016, Preqin said earlier this year, based on a survey of 175 private capital firms done from May to September along with FPL Associates.

About 37 percent of respondents to Preqin expected firmwide base salaries to increase in 2017.

Likewise, the 2016-2017 Holt-MM&K-Buyouts Insider PE/VC Compensation Report found that 70 percent of 100 North American buyout, growth equity and venture capital firms planned to raise salaries for investment professionals below partner in 2016. The median raise is expected to be 8 percent, according to the survey, published by compensation consultants Holt Private Equity Consultants and MM&K and Buyouts Insider (publisher of Buyouts).

PEPG is a group for mid-level private equity executives (VPs, principals and other post-MBA-level PE execs) for networking, education and information sharing via the association’s online discussion platform.

Action Item: Read more about PEPG: http://privateequityprincipalgroup.com/