PRIVATE EQUIT Y PR ACTICE 2022 North American Private Equity Operating Professional Compensation Survey
ContentsA message from the authors 3Methodology 4Executive summary 5Operating executives’ backgrounds and role structure 8State of operating executive compensation 12Non-cash compensation 202022 NORTH AMERICAN PRIVATE EQUIT Y OPER ATING PROFESSIONAL COMPENSATION SURVEY2
A message from the authorsWelcome to our 2022 North American Private Equity Operating Professional Compensation Survey. Together with our survey of private equity investment professionals, this report provides a comprehensive picture of the compensation that North American private equity (PE) executives are currently receiving. Deal activity is at record levels. With firms paying full price for their investments, the pressure is on operating professionals to ensure deals reach their full potential. We see in this report that in order to attract the right people, firms are raising compensation, providing increased job flexibility, and casting a wide net in their search for candidates. We hope you enjoy reading the survey, which remains the only one of its kind. As always, suggestions are welcome, so please feel free to contact us—or your Heidrick & Struggles representative—with questions and comments.With warmest regards,On confidentialityThe North American private equity operating professional compensation survey, 2021, was conducted on an anonymous basis; no data relating to the identity of individual respondents or their employers is included in the following report.Jonathan GoldsteinRegional Managing Partner, Americas Private Equity Practicejgoldstein@heidrick.comJohn RubinettiPartner Private Equity Practicejrubinetti@heidrick.comAcknowledgmentsThe authors wish to thank Mohd Arsalan and Akshat Singhal for their contributions to this report.Diverse region, inclusive workforces: Diversity and inclusion policy and practice in Asia PacificHEIDRICK & STRUGGLES3
MethodologyIn an online survey conducted in the fall of 2021, we asked participants to provide compensation data for 2019, 2020, and 2021. All data collected is self-reported by private equity operating professionals and has been aggregated to evaluate trends in compensation packages, including base salary, bonus, and carried interest plans (carry). Responses from 186 participants are included in the survey results. In each compensation table, we report mean base, bonus, and carry for each of six levels of private equity operating professionals. Please note that the mean can be influenced by particularly high or low data points, especially when the number of respondents in a given group is small. Carried interest is calculated using “carry dollars at work,” which is the expected return on total carry participation across all vehicles, based on achieving a net 2x return (above hurdle and after fees) in a vehicle charging a 20% performance fee....
