【海德思哲】2024年北美私募股权投资专业人士薪酬调查报告_36页_751kb

2024 North American Private Equity Operating Professional Compensation Survey Summary

Core Content

This report provides an overview of the compensation trends for private equity (PE) operating professionals in North America, based on a survey of 251 participants. It outlines the evolving role of operating professionals, their backgrounds, and compensation structures across different levels of seniority and responsibilities.

Key Findings

1. Growing Importance of Operating Professionals

• As PE deal activity has declined, especially in 2023, the demand for operating executives has increased.
• Firms are seeking to drive long-term value creation, leading to a greater emphasis on operational expertise.
• The role of operating professionals is expanding beyond traditional value creation tasks to include strategic and functional responsibilities.

2. Backgrounds and Roles

• Firm Leader: Typically founders or senior executives with significant responsibility.
• General Partnership Level: Includes roles such as operating partner and managing director, with a proven operational track record and board involvement.
• One Step Below General Partnership Level: Includes roles like operating principal and director of portfolio operations.
• Vice President: Works closely with portfolio companies and may have board exposure.
• Associate: Entry-level, primarily involved in research and analysis.
• Senior/Executive Advisor: Part-time roles, often exclusive to one firm, consuming 5-50% of an individual's time.

3. Compensation Trends

• Base Salary:
  • From 2022 to 2023: 60% of respondents saw a modest increase, with most increases being $50,000 or less.
  • From 2023 to 2024: 45% of respondents saw an increase, with 79% of those increases being $50,000 or less.
• Bonus:
  • 7.8% of respondents saw a decrease in bonus from 2022 to 2023.
  • 52% of respondents reported that their bonuses were entirely discretionary, down from 67% in 2022.
  • 31% of respondents had bonuses based solely on individual performance, up from 19% in 2022.
• Carried Interest:
  • Most operating professionals see carried interest vest on a straight-line schedule.
  • Co-investment rights are common, with firm leaders having the highest fund-based participation (73%).

4. Compensation by Role Level

• Firm Leader:
  • Base salary and carry did not necessarily increase with firm or fund size.
  • Managing partners at smaller firms tend to have higher compensation.
• General Partnership Level:
  • Cash compensation generally increased with AUM.
  • Notable partner turnover was observed in technology and IT consulting firms.
• One Step Below General Partnership Level:
  • Cash compensation increased significantly from the 2018 survey, especially at firms with less than $10.1 billion in AUM.
• Vice President:
  • Compensation remained relatively stable, with a slight increase in base salary and bonus.
• Associate:
  • Base salary ranged from $100k to $240k, with a mean of $151k.
  • Bonus ranged from $30k to $160k, with a mean of $84k.
  • Carry ranged from $100k to $250k, with a mean of $175k (for all funds) and $125k to $150k (for most recent fund).

5. Employment and Professional Backgrounds

• Industry Expertise:
  • Generalists were the most common (20%), followed by technology/software (19%) and industrial (16%).
• Functional Expertise:
  • Generalists were most common (23%), followed by sales (15%), marketing (14%), and finance (14%).
• Prior Roles:
  • 27% had prior experience as PE operating executives, up from 7% in 2022.
  • Only 12% had previously worked at a portfolio company of their current GP or investment advisor, down from 27% in 2022.
  • Only 17% had been a CEO, down from 26% in 2022.

6. Professional Development

• 67% of respondents reported a clear path to becoming a partner or managing director, up from 56% in 2022.
• The survey respondents skewed younger, with strong majorities having 10 or fewer years of experience.

Conclusion

The report highlights the increasing importance of operating professionals in the PE industry, driven by the need for long-term value creation and the evolving nature of their roles. Compensation trends show a general stability in base salary and bonus, with a shift towards more discretionary bonus structures and a focus on functional and industry-specific expertise. The data also underscores the importance of professional development and the need for clear career progression paths within PE firms.