Yesterday, I asked whether PE execs are overpaid. This was in response to reports that PE firms are raiding investment banks for relatively inexperienced analysts. I also mentioned the Blackstone Group, where named executives get a $350,000 base annual salary plus a possible chunk of the carry.
Results of the poll were nearly evenly split. A little more than half, or 51.5%, do think PE execs are overpaid. But 48.5% don’t think the executives are overly compensated. Of course, much of peHUB’s readership is comprised of PE execs, so this likely explains the results.
Some of the written responses were notable: “Compensation for GPs are determined by fees and carried interest agreed to by LPs,” one reader said. “This can be highly volatile. If the fund does very well, execs do very well. If a fund does poorly, execs do poorly and may not even raise a next fund.” This reader also went on to tell me why peHUB has gone downhill and that the story provided no real analysis or thoughtfulness. Did I mention I wound easily? Gosh.
“All of their compensation should be tied to performance,” another person said.
“Using other people’s money to make tons of money. It’s crazy,” a different person wrote. “How can I get in on this racket?”