Former Corp dev told me there’s serious money in equity?
One of my colleagues used to work in Corp dev. Was giving me the insight that some higher up individuals would received equity in their package that could sometimes touch $3-5 million+. I’m not sure how true this is so I thought I’d ask.
Much appreciated
Based on the most helpful WSO content, your colleague's insight holds some truth, especially for higher-level roles in corporate development. Equity can indeed be a significant part of compensation packages, particularly for senior positions like Vice Presidents, General Managers, or C-Level Executives. Here's a breakdown:
Equity becomes more substantial as you climb the ladder, starting to appear at the Senior Manager/Director level and growing significantly at the VP level and above. The value of equity depends on the company's performance, the size of the equity pool, and the individual's share. In some cases, equity payouts can indeed reach millions, especially in successful companies or high-growth industries.
If you're aiming for such roles, focusing on career progression and potentially pursuing an MBA (as some WSO threads suggest) could help accelerate your path to these lucrative positions.
Sources: Compensation Structure at the mid-management level in Corporate Development / Strategy / Finance, Corporate Development Manager - Q&A, The Other Road: Corporate Development Associate Fielding Questions, Corporate Development Manager - Q&A, Corp Dev Salary Packages
I am not sure I would feel good about saying there are even ~20 SVPs in Corp Dev who receive that level of equity comp in the US alone, and if there are, many have been in the role for a long time (20+ years Id wager). Additionally, I would also imagine that this $3-5MM equity payout is a one off, and should be treated as a non-recurring bonus. This is similar to saying that some MDs in IB clear $2-5MM a year. Yes, it is true, but you are focusing on the top percentile (quartile? I am not sure exactly what % of IB MDs bring in that kind of money, but it is likely a small percentage). To generate enough deal value to warrant that kind of return requires a TREMENDOUS amount of luck, no matter your intelligence and deal making skill.
IMO, the better question to ask would be what percentage of Corp Dev heads clear >$1MM in all in comp? I think the answer would be ~top 12-15%. This is what folks should strive for. Unless you're a savant, you cannot expect to end up in a spot where you're earning $3-5MM in all in comp (let alone equity alone) in the Corp Dev world. FYI this is a fairly data driven argument, based off of using the Lion Equity's Corp Dev surveys, as I believe the top 10% make an average of ~$1.3MM.
The last thing I will say is that if you play the long game and do Corp Dev for scale players (e.g., F100), the compensation can be very good. With that said, many of the top Corp Dev spots are taken by former EB / BB bankers, so its not like these positions are easy to walk into.
Agreed on how long those people would have to be around to get close to those numbers.
Also from experience at my current spot, old VP was around for ~15-20 years and grew the company through M&A and other business development activities. Eventually they’re head of multiple teams, not strictly M&A. Maybe there’s exceptions where you join right place/right time and your company gets hot and you happen to have a good equity package/LTIP, but that still requires a sizable liquidity event (Buyout or otherwise)
It's infrequent, but it does happen. Basically some combination of a home run (like 5+ MOIC) for the sponsor, and a rollup play where the CorpDev guy is considered critical. There's probably some population of career CorpDev guys who have hit that (largely same as management team folks who have a great exit)/ The question is more, how many have done it more than once? Probably not a lot.
I appreciate your perspective, that was generally my sense.
In general, I recommend ignoring the absolute best upside case when thinking about different career trajectories, and feel as though this scenario is really a right time right place outcome as opposed to a calculated outcome. I.E., regardless of background and skillset, it is really really hard to find and vet a company who wants to leverage M&A to such an extent that you could receive that kind of equity comp as a potential reward, unless you hit several home runs consecutively and generate abnormal returns.
I work for a F500-1000 and our VP(5yr from retirement) do make that with base+stocks+bonus but pure equity is a bit much. I'm an SA (3.5yoe) and make a bit over $200k all in. Idk if that is serious money.
Corp dev or corp finance generally? 200k seems kinda high for that level/years of experience at least to what I see on Linkedin.
Corp dev generally but also some strategy (unavoidable to involve Strategy work at certain $ assets) Not as much sourcing since my TMT industry is kind of an open book. Pretty flat hierarchy, report directly to Director.
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