Fair ROI Benchmark for Acquisitions/AM Hires? Time to Ask for More?

Based on the most helpful WSO content, your situation seems like a textbook case for initiating a compensation adjustment conversation. Here's why and how you can approach it:

1. ROI Benchmarks in Acquisitions/Asset Management

• Industry standards for ROI benchmarks in forward-facing roles like Acquisitions or Asset Management often hover around 20–25% ROI relative to compensation or a 2.5–3.5x revenue multiple.
• If your self-assessment of producing a 50% ROI is accurate, you're outperforming the standard benchmarks significantly. This alone strengthens your case for a salary bump or additional incentives.

2. Value-Added Contributions

• Refinancing Savings: Shaving 50 bps off multiple refi projects on millions of dollars is a tangible, quantifiable contribution. Highlight the dollar value saved and how it impacts the firm's bottom line.
• Off-Market Deals: Structuring creative seller carry terms and avoiding broker fees (2.50–3.00%) on $5MM/year in acquisitions is another clear value-add. Quantify the savings here as well.
• Time Savings for Partners: By taking on tasks that free up partner time (valued at $1,000/hr), you're creating indirect but significant value. Estimate the hours saved and translate that into a dollar figure.
• Development Cost Savings: Cutting out owners' reps (2–3% of development costs) on $1–$2MM worth of ongoing developments is another substantial contribution. Again, quantify this.

3. Compensation Adjustment Options

• Salary Bump: Given your contributions and the ROI you're generating, a salary increase is a reasonable ask. Use the benchmarks (20–25% ROI vs. your 50%) to justify this.
• Deal Bonuses: If your firm doesn't already have a structured deal bonus system, propose one. For example, a percentage of the savings or value created on each deal.
• Increased Promote: If you're involved in deals with long-term upside (e.g., equity stakes or profit-sharing), negotiating a higher promote percentage could align your incentives with the firm's success.

4. How to Approach the Conversation

• Prepare a Detailed Case: Create a document or presentation that outlines your contributions, quantifies the value you've added, and compares it to your current compensation.
• Use Industry Data: Reference the ROI benchmarks (20–25%) and explain how your performance exceeds them.
• Propose a Win-Win Solution: Frame your request as a way to align your incentives with the firm's success. For example, "Given the value I've added, I believe a salary adjustment or structured deal bonus would better reflect my contributions and motivate me to continue driving results."

5. Additional Resources

• WSO threads often emphasize the importance of quantifiable results and industry benchmarks in compensation discussions. If you're looking for frameworks or examples, check out WSO's Compensation Reports or threads on negotiating raises in small shops.

In summary, your contributions clearly justify a compensation adjustment. Whether it's a salary bump, deal bonus, or increased promote, the key is to present a well-prepared case that ties your value creation directly to the firm's success. Good luck!

Sources: Q&A: 3rd Year PE Associate ($10bn+ AUM, MBO/LBO, equity, mezz, distressed debt), Career advice needed: Acquisitions vs Asset Management, What is a "realistic" expectation on carried interest as part of comp package?, https://www.wallstreetoasis.com/forum/real-estate/what-are-your-big-problems-right-now?customgpt=1, BO to M&A and think I've failed; should I move back to BO?