RXCO MD comp?
Have seen all the posts about crazy comp at A&M and other RXCO firms at junior and midlevels, curious what the senior guys are making.
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A&M / Alix etc typically don't hire MDs or equivalent (most senior position) externally, same with quite a few other firms. Typically the startup firms are the ones that hire for super senior positions externally. With that being said. I was at a T1 before, and I still am close friends with a MD from there who I'd call my mentor. I remember being curious about what the ceiling was for compensation, and they did reveal that they averaged around $2.1m / yr all in looking at all the years they were in that position for. They were in the far lower end of the comp spectrum. Generally speaking, it's a super wide range so I can't put a cap on it, especially for firms that run the billable hour model.
Also, as another point of reference, PPP pays their MDs all the way from 950k to 2m+ based on what I've heard. You could browse their postings and see if there's anything. A&M typically pays the highest.
One more note: FTI notoriously underpays.
Edit: the comp figures jump tremendously if you land a CRO gig, to a point where they can easily beat IB MD and PE figures. However, if you are just staffed on deals like other employees it obviously won't be as high relatively speaking, I'm not saying $2m a year is bad money lol.
That seems kind of low no, given the fees these places charge and comp at comparable levels in banking and law?
Also curious, as am heading to T1 as An, did you leave to PE, and if so, how and why? Would also be happy to PM to ask more questions
Three things 1) much less comp is deferred than in IB, atleast for my contact 2) the person I know isn't exactly what I'd call a rainmaker (they hadn't been a CRO, just a MD) 3) like I mentioned comp is super variable because at that level it depends on your ability to bring in business, and most importantly, the terms of your CRO agreement because CROs get paid the most. I just used the person I knew the best, but as a reference point, the MDs at my firm who were CROs made mid - high seven to low eight figures per year. I obviously wasn't going to ask them for exact figures; don't know them that well.
To the second part of your question, I got a pretty good offer at a small PE firm that could afford to pay better than street. I plan to exit out of it back to RX co after I get some experience in the buyside, bc in all honesty I've got a way better chance of making MD in rxco than a partner in PE, bunch of lifers who don't want to give up their positions and make way for the younger generation. In short, thought it'd be a cool experience.
OP here, had some more questions.
I’m interested in potentially going down the PE route and was curious how common it was, in your experience, for RXCO people to end up on the investment team as opposed to the operating team?
How did you end up finding this PE firm? Did a headhunter reach out? Also is there a certain size of PE firm that is more open to hiring RXCO guys, I.e. LMM? (As opposed to UMM). And is there a sector or strategy slant in favor of the RXCO guys? (Ie distressed, or retail if work at BRG for example)
Do you think there is an advantage to gaining PE/buyside experience before heading into RXCO? How would you recommend preparing for interviews?
Also, any advice for performing well in RXCO as a junior?
Thanks a ton for the info!
For your first question, it's not very common for people to leave the field at all in the first place lol, regardless if it's to HF, IB, PE or to work on a farm. Look on some prospecting tools for people who worked in RX consulting, like 75-80% are still in RX consulting. I've seen a pretty equal split between both, maybe slightly more ops leaning because ppl in RXco are more likely to find that work interesting.
For the second question, it wasn't a headhunter or anything, we just worked with this PE firm on a deal, and a couple of their associates and I got pretty friendly, and they called me up when there was an opening, gave me the spiel, asked if I was interested, and I said yes. Went through the process and the rest is history. So, I guess I had a 100% success rate, since that was the only firm I "applied" to. I've seen a fair amount of luck with headhunters etc, and this ties into your first question, but those who go with headhunters typically have more flexibility to tailor to investing vs operating roles, vs with warm connections it's whatever your connection works in most likely. You will have to be proactive regardless, don't just expect headhunters to ring you up. As for fund size, I've seen the entire spectrum, including a couple people who somehow got into talks with a pretty well regarded activist firm (Icahn, Elliott, Pershing etc). Not sure what came of it but atleast shows some level of foot in the door-iness. Again, all depends on how you decide to approach it. Distressed / spec sits are always more open to RXCo backgrounds, over buyout and growth PE. Not impossible to get into the latter two, case in point being me.
And yes, I honestly would advocate for people to exit into RX Consulting from PE/IB rather than the other way around; that's the way it's traditionally been. PE and IB give you some amazing skills that you can put to use in RX co, with better WLB and generally comparable or better comp. The way I think of it is that IB and PE are "generalist / platform" careers. Even RX IB is just IB in the RX space, and distressed PE is just PE in the distressed space. In comparison, RX consulting is very much its own thing, it's not management consulting or strategy consulting etc in the RX space. That makes it a "niche / functionally specialized" career. The pros are that given how specialized your skills are you can make absolute bank, but a con is that it doesn't perfectly map to other careers, like IB to PE or PE to corp dev. The skills themselves are portable, but there's a translation issue like less templatization, less precedent etc and some exits as a result are an uphill battle. Very path dependent. Niche ≠ bad however, it's a power niche that the market strongly values. All of which is why it makes sense as an exit career. Not saying it's a one way door, more like a gravity well. Once you stay long enough it becomes optimal to stay.
As for advice: be a sponge. You'll be around some extremely smart operators and people (and some not very smart people), so as a junior, do what you're told, don't get in anyone's hair, and absorb as much as you can from those who have more experience than you do. Very few other careers teach you to run a business that's in bankruptcy and then get it out of bankruptcy. It's also an increasingly valuable skill, since with that liquidity focused background, you can pretty easily run a non-bankrupt business well. Much better than financial engineering. I know you're looking to exit, and i'm not saying not to, just realize the amount of learning that RX consulting can give you.
I left RX consulting some time ago, but even back then the MDs or equivalent roles were earning in the seven to eight figures. These were individuals stepping into CRO, interim CEO, or CFO roles; that was always the endgame for top performers in turnaround consulting. My sense is that this dynamic still holds, and if anything the economics have only improved as those skills and that operating judgment have become more valuable.
hi, assuming from your title you left to PE? I’m curious why you made the jump and for what kind of person you’d recommend making the jump, and if you had any advice/perspective on it
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