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Here's the deal, looking for advice on how the negotiate for a higher salary this week:

- Worked for two years at 2bn PE fund, previously two years in M&A
- Won't get promoted to VP until January 2014 and no salary increase between levels
- Accepted low-ish offer in the first place, didn't know better, know now that previous associates made 15% - 20% more, there is no carry until VP level
- Struggled in the beginning as youngest associate ever, was hired for post-MBA level without enough experience
- I'm performing at the right level now, have completed two deals this year (sourced one of them)

I'm scheduled to speak to the relevant person this week (he doesn't know why), how should I set the tone?

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Comments (8)

  • m2's picture

    My working hypothesis is you get a raise by switching firms, interested in hearing whether there's other approaches...

  • bbballer's picture

    One more data point:
    - Firm is at the end of the fund lifetime and in the process of raising a new / bigger one. As a result management fee will drop from 2% to 1% in January which should be off-set by the new fund starting summer 2013

  • AnalystMonkey2769's picture

    apologize if this is inferred and i sound like an idiot but by this:

    "Won't get promoted to VP until January 2014 and no salary increase between levels"

    does that only mean BASE is the same but BONUS can increase?

    second, is this common for MM PE that they low-ball you on an offer with the hope that you dont negotiate for higher comp? just curious. goodluck to you!

    I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought- GG

  • shark-monkey's picture

    I think the fact that you are younger than the other associates is the reason you were low balled. I think you go in there is examples like you have listed here and also back it up that you are producing at their level. Just polish up your approach, be diplomatic, and it won't hurt to ask for the higher salary. Interested in hearing how it turns out.

    Fear is the greatest motivator. Motivation is what it takes to find profit.

  • ChiTown82's picture

    I recently (April/May) negotiated a higher salary with my firm (12.5% base increase 3 weeks after an annual 6.67% increase; with a second, guaranteed, increase of 11.1% effective 1Q 2013) and used, generally, the following process:

    1) my bank's internal HR system has a base range for each position level - I was at the low-end of this post annual increase (I had originally been at the high end prior to them re-adjusting the range)
    2) I had an informal salary number from a competing firm that had reached out to me regarding an opening (although I wasn't interesting in switching, neither firm knew)
    3) I illustrated my positive impact within the team via successful pitches, ideas, recent mandates, etc.

    I sat down first with my direct boss (strong advocate of mine) to discuss my concern, more or less off-record to gauge his reaction. Upon presenting my three items (and stressing the desire to stay put - but happy) he felt it was a viable strategy to take to his direct boss so I set up a call with him (my boss let him know I would be calling to discuss this so it wasn't out of left field). He agreed with my points and took it up the chain; they then came back with their offer which I accepted because they met my expectations. Now, I have a little more scrutiny to stand up to during reviews but overall I think everyone walked away happy. I'm not outside of the HR range and I didn't leave for a competitor; and they met my number.

    My advice - have at least a couple key points (hard facts) that you can present them, and why these are important, while also verbally stressing your desire to stay put (for the near future, I didn't have to sign any commitments); as well as, giving them ways you plan to "make it worth it to them," be it taking on bigger responsibilities, wanting to expand your skill set, participating to a larger extent in pitches/live deals, etc. Really, it's just like pitching to a client - have your reasons why, show what you can do, have comps.

    Hope this helps.

  • In reply to bbballer
    brandon st randy's picture

    bbballer:
    One more data point:
    - Firm is at the end of the fund lifetime and in the process of raising a new / bigger one. As a result management fee will drop from 2% to 1% in January which should be off-set by the new fund starting summer 2013

    Can you elaborate on this? How many funds is your PE firm currently managing and when is the soft close on the new fund? If there is only one fund and that one is about to be liquidated then you might want to wait until fundraising for the new vehicle has completed. This way firm management will have a better idea of what its budgetary situation will look like. If you ask for a raise now amid the fundraising uncertainty (especially given the prospect of reduced management fee) then they might not be too happy about it or worse, they might feel that they can't afford you.

    Too late for second-guessing Too late to go back to sleep.