A report released today by PrivateEquityCompensation.com indicates the private equity and venture capital markets are continuing to enjoy increases in compensation and that the trend will extend to 2012.
For the second year in a row, private equity professionals reported a solid increase in total earnings over the previous year, with the cash earnings averaging $248,000 USD, which came in the form of both increased base salaries and bonuses.
The average expected increase was 6 percent and, again this year, more than 40 percent of professionals expected double-digit increases over last year. Despite the increases, over half of the respondents indicated they have some concerns over private equity job security.
Employees at smaller firms reported higher earnings and some guaranteed bonuses. “We believe the demand for private equity talent in the larger firms is forcing the smaller firms to keep pace, in order not to lose their most talented players,” saysDavid Kochanek, publisher of PrivateEquityCompensation.com.
Different from past reports, the venture capital firms led the charge in base compensation increases; the downside this year was that their average bonus decreased. “That’s not totally unexpected as last year we reported that VC firms were paying the highest bonus percentages of all the firm types,” said Kochanek.
Will this positive trend continue? “We believe 2012 will bring with it increased base salaries and healthy bonuses once again,” said Kochanek. “Expect continued demand for investment professionals and talented, operationally focused players to work in portfolio companies – even if the economy continues to show lackluster improvements.”
About the Report
The 2012 Private Equity Compensation Report is based on an industry survey conducted in October and November 2011. Data was collected directly from hundreds of private equity and venture capital partners and employees.
The full report can be found at www.privateequitycompensation.com
The Report has grown to be the most comprehensive benchmark for private equity and venture capital compensation practices. Some of the participating firms over the years include: Actis, American Capital, Bain Capital, BlackRock, Carlyle, Century Capital Management, Comcast Ventures, DuPont Capital Management, EdgeStone Capital Partners, Highland Capital Partners, Hilco Consumer Capital, Mission Ventures, Mohr Davidow Ventures, North Atlantic Capital, RBS, Safeguard Scientifics, SV Life Sciences, Siemens Venture Capital, and Wellington Partners.