It can be difficult to find a good benchmark for venture capital salaries and bonuses. PrivateEquityCompensation.com released their 2012 report that shows the venture capital industry continues to increase compensation and that the trend that will extend into 2012.
For the second year in a row, professionals reported a solid increase in total earnings over the previous year, with the average cash earnings coming in at $248,000 USD, coming in the form of both increased base salaries and bonuses. The average expected increase was 6 percent and, again this year, more than 40 percent of professionals expected double digit increases over last year.
Different from past reports, the venture capital firms led the charge in base compensation increases; the downside this year was that their average bonus decreased. “That’s not totally unexpected as last year we reported that VC firms were paying the highest bonus percentages of all the firm types,” said Kochanek.
Most of those reporting said their fund’s performance was in the black. This year’s expectations are a bit tempered, as 73 percent are projecting a positive year. Unlike last year’s Private Equity Compensation Report, this year there was a disconnect between fund performance and bonuses. If a fund was even or down, good sized bonuses are still expected and some even guaranteed.
Will this positive trend continue? “We believe 2012 will bring with it increased base salaries and healthy bonuses once again,” said Kochanek. “Expect continued demand for investment professionals and talented operationally-focused players to work in portfolio companies — even if the economy continues to show lackluster improvements.”
About The Report
The 2012 Private Equity Compensation Report is based on an industry survey conducted in October and November 2011. Data was collected directly from hundreds of private equity and venture capital partners and employees. The full report can be found at PrivateEquityCompensation.com
The Report has grown to be the most comprehensive benchmark for private equity and venture capital compensation practices. Some of the participating firms over the years include: 3i, Actis, American Capital, AXA Private Equity, Babson Capital Management, Bain Capital, Barclays Capital, BlackRock, Carlyle, Century Capital Management, Clairvest, Comcast Ventures, CPP Investment Board, Deutsche Bank, DuPont Capital Management, EDC Equity, EdgeStone Capital Partners, Global Environment Fund, Highland Capital Partners, Hilco Consumer Capital, Kaiser Permanente Ventures, Kayne Anderson, Mission Ventures, Mohr Davidow Ventures, North Atlantic Capital, Qualcomm, RBS, Safeguard Scientifics, SV Life Sciences, Siemens Venture Capital, Time Warner Investments, and Wellington Partners.
