PE Jobs See 2003 Total Pay Decline

The 2003 Private Equity Compensation Survey from Mercer Human Resource Consulting found that base-pay increases for spots ranging from partner-level to administrative jobs ranged from 3.2% to 9.6%. However, when carried interest distributions were factored in, five of the positions suffered a decline – including a significant 31.5% drop (to $1,277,700 in 2003 from $1,865,000 in 2002) for the managing general partner/CEO position.

Other positions showing an overall decline in total pay include:

• CFO/administrative partner, -11.3%
• chief operating officer, -7.5%
• mid-level partner/senior vice president, -4%
• senior partner/executive vice president, -2.5%.

Lower-level, non-leadership employees – such as associate, analyst, and administrative manager/coordinator – fared much better with increases in total compensation of up to 18.2%, according to the Mercer research.

In addition to its influence on pay, the still recovering economy also appears to be affecting private equity firms in other ways. When asked about their overall workforce size for the past three years, 22% of the survey participants indicated it had decreased, while 56% said it had increased and 22% indicated it stayed the same. Nearly one-fifth (18%) reported having a head count reduction in 2002, compared to 15% in 2001.

The survey examines compensation levels and practices for 11 positions common in the private equity area, including partner-level, professional, and administrative jobs. The 2003 survey includes data provided by 72 firms (63% of which are private firms and 38% of which are institutional) representing a total of nearly 1,000 employees. The organizations surveyed have an average of 25 employees and average total capital committed for all active funds of $1 billion.

The 2003 Private Equity Compensation Survey can be purchased from Mercer online at www.imercer.com or by calling 800 333 3070.