Seventeenth annual report based on data directly from industry professionals shows a decade of gains but increased concerns
ANN ARBOR, Mich., Jan. 2, 2024 /PRNewswire/ — The 2024 Private Equity and Venture Capital Compensation Report marks the tenth straight year of compensation gains in the private equity and venture capital industry. But the market is changing.
The Private Equity Compensation Report reveals that 2023 brought increases across the board. Regardless of job title, all respondents reported an increase in total compensation.
Down from last year, 60 percent of respondents expect to see greater cash earnings, with 40 percent responding that they are earning the same or less than last year. While base pay is up, bonus pay growth is not keeping pace.
“Again this year, compensation for those in pure-play private equity and hybrid firms outpaced those in venture capital,” said David Kochanek, Publisher of PrivateEquityCompensation.com. “VC firms paid much lower total compensation for similar titles.”
Participation in the carried interest pool is largely reserved for the members of the team most directly involved in the investment decisions. Work experience continues to be the main driver of carried interest (or “carry”) participation rates. Between 71 and 78 percent of those with 6 or more years of work experience receive some level of personal carry.
Reported fund performance is down again this year. Funds up 25 percent or more fell by 9 percent (in addition to last year’s 4 percent drop). Funds up 10 to 24 percent dropped from 39 percent last year to 33 percent. And the percentage of respondents who said their fund’s performance was down increased from 8 to 10 percent this year.
“As we’ve reported before, when funds didn’t perform well, the firm continued to pay out lucrative bonuses to team members,” said Kochanek. But bonuses are far from guaranteed as 71 percent of respondents said no portion of their bonus was guaranteed.
Private equity and venture capital professionals continue to express an overall high level of satisfaction, with only 14 percent reporting below average or poor work-life balance.
Although work-life balance is good, 38 percent of respondents are concerned about their job security. This represents an increase of 5 percentage points over last year. The top three reasons for job security concerns remain consistent: market conditions, fundraising, and firm structure.
In addition to compensation data, the report provides additional insights such as positions in demand, percentage of firms hiring, where firms are cutting back, and where career opportunities are increasing.
Although 50 percent of respondents indicated their firms are hiring investment professionals, hiring is down across all positions. The report points out one clear area of concern in that the percentage of respondents reporting headcount reductions is also up across all categories.
About The Report
The 2024 Private Equity and Venture Capital Compensation Report is based on data collected directly from hundreds of private equity and venture capital partners, principals, and employees.
The report, in its seventeenth year of publication, is widely regarded to be among the most comprehensive benchmarks for private equity and venture capital compensation. It provides independent and impartial data covering a broad range of salary, bonus, carried interest, and other compensation-related information, sourced directly from professionals working within the industry.
The full report is available for purchase at http://www.PrivateEquityCompensation.com and can be downloaded instantly in PDF format.
About Benchmark Compensation
PrivateEquityCompensation.com is published by Benchmark Compensation, a division of A2 Media Ventures, Inc. Annually, the firm collects compensation data directly from hundreds of private equity and venture capital partners and employees in firms both large and small.
For more information, contact:
David Kochanek, Publisher
E-mail: [email protected]