Money on money

6 January 2020 By Liam Proud Follow @liamwardproud

Private-equity managers can earn more than company CEOs or bankers, whose remuneration has drawn most scrutiny in recent years. The $4 trln industry is now too big to stay under the radar. A surge in company failures would make well-paid dealmakers easy targets for politicians.

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A survey by executive-search firm Heidrick & Struggles found that 56% of private equity professionals in North America reported an increase in their base salary for 2019. The results, which were first reported by the Financial Times on Jan. 6, were based on a sample of 895 professionals in the buyout industry.

Managing partners of firms with $2 billion to $10 billion of assets could theoretically receive performance-based payments of between $112.5 million and $120 million, the Heidrick & Struggles survey showed. That sum would be paid out over a number of years, and was calculated assuming the funds double investors’ money after fees.

Base salaries for managing partners at those same firms ranged from $250,000 to $700,000 in 2019, while annual bonuses were between $1.5 million and $8 million.

Almost one-third of the managing partners surveyed felt they were not paid enough.

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