How does comp vary between origination vs underwriting?

Question

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!

Showtime · Accepted Answer

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.

Stell · Answer

At the senior levels, origination compensation often becomes increasingly tied to deal volume sourced. This means that individuals who are responsible for bringing in new business, such as Principals and MDs, may receive a significant portion of their compensation based on the number and value of deals they bring to the firm. In many cases, there may be specific targets or quotas they need to meet in terms of the deals they originate.

On the other hand, underwriting compensation at these levels may be based on different key performance indicators (KPIs) or metrics.

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How does comp vary between origination vs underwriting?

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How does comp vary between origination vs underwriting?

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