Private equity and venture capital employee compensation is up in 2021 for the eighth straight year, according to the 2022 Private Equity and Venture Capital Compensation Report from Benchmark Compensation in Ann Arbor.
The percentage of respondents earning $150,000 and below has continued to decline and those earning from $151,000 to $1 million increased to 80 percent of respondents. This is the highest percentage of private equity and venture capital professionals reporting earnings more than $150,000 in annual compensation in the history of this report.
“Overall, compensation is up, yet 57 percent of those surveyed are dissatisfied with their pay,” says David Kochanek, publisher of PrivateEquityCompensation.com. “We’ve seen this before. When the market is strong, pay satisfaction is weak. This is because investment professionals are not currently concerned about losing their job and they are reading about the top performers and huge pay packages.”
Market conditions and employee expectations are the reasons cited by 62 percent of those dissatisfied.
Estimated fund performance in 2021 was also up compared to 2020, and funds up 10 to 24 percent over last year represented the majority at 45 percent.
The research shows that bonus pay is typically calculated based on firm performance, fund performance, individual performance, and a combination of factors. The largest bonus payouts are achieved in the largest firms based on individual performance. Employees at the largest firms can expect to earn more than triple the bonus pay of those at smaller firms.
In addition to compensation data, the 2022 Private Equity and Venture Capital Compensation Report provides additional insights such as positions in demand, percentage of firms hiring, where firms are cutting back and where career opportunities are increasing.
The report, in its 15th year, is based on data collected directly from hundreds of private equity and venture capital partners, principals and employees. It is available for purchase here and can be downloaded instantly in PDF format.