How does comp vary between origination vs underwriting?
For firms with separate underwriting / origination roles (eg Monroe, Antares, etc), I’m curious if anyone has a sense of how comp structure varies as you move up, particularly at the Principal / MD levels.
At the senior levels, is origination comp based on a formula based on deal volume sourced, and is underwriting comp based on some other KPI / metric?
Thank you!
Hey Senior VP in PE - Other, I'm here because nobody responded to this thread after a few days...maybe one of these resources will help you:
More suggestions...
I hope those threads give you a bit more insight.
Bump
Clawback on bonus if there is a credit loss on a deal that you sourced / underwrote
Really interesting, thank you. Any specifics on what the terms look like? Eg does 1 loss wipe out half of your bonus? And is it based on default rate or loss recovery rate?
My shop has separate UW and originator/RM roles. I’m an underwriter / PM, and my comp structure is pretty typical. Base + bonus for junior level, with carry generally starting around VP level. I don’t have specific KPIs/metrics to determine my bonus (although I’m sure some shops do), so my bonus is primarily a combo of personal performance and firm-wide performance. We have a target bonus range (e.g., 50-75% of base), with the low end being personal underperformance and/or a worse year for the firm, and vice versa for top of the range. Maybe you can call it a KPI, but my annual performance reviews look at the number of deals I’ve closed as well as my portfolio management capabilities. And of course all the little stuff on the side, like ad hoc projects, skill in presenting to investment committees, etc.
I don’t have much insight on the origination side, but the bits of info I’ve heard seem to be that it’s tied to deal volume. I believe my shop gives originators a bonus for each deal closed, generally tied to the size of the deal. I personally haven’t heard of any clawback provisions for underperforming deals but wouldn’t be totally shocked if some firms do that.
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