How to Evaluate Corp Dev Gig / What is market comp?
Have a Corp Dev superday coming up that I expect to convert (so no $$$ figures -- will update once / if I convert). For context, I'm way more familiar with PE interview / market dynamics than CD
- Small and lean, growing team (handful of juniors) at F500 that has made 20+ acquisitions in last few years ($XX billion) so it's execution focused, less on integration or strategy. Potential for divestitures / that type of work
- Tech / tech enabled products and services, lots of end markets to acquire into / generally interesting industries
- T2/T3 city (my IBD experience was in NYC but I'm fine moving anywhere), potential for good comp (recruiter said it was higher than other CD roles but didn't give figures)
The backgrounds of the team are from IBD programs, but given geography maybe not as good as the one I'm from (e.g. MMIBD vs. EB / BB) but I'm not too particular about that. I'm happy to join and be a useful asset in a growing team
What are some methods of valuation to figure out how much is market comp if I get the offer?
What are some other factors to evaluate the quality of this opportunity beyond fit, compared to other CD roles (what are good questions to ask that reveal the quality of this opportunity?)
I do feel good overall about the role, but know these roles can vary dramatically. Appreciate any and all help
Based on the most helpful WSO content, evaluating a Corp Dev role and its compensation can be a bit tricky as it varies widely depending on the company, industry, and location. However, I can provide some general insights based on the WSO threads.
Compensation: From the WSO threads, it seems that the compensation for Corp Dev roles can range quite a bit. For instance, a senior associate or senior manager in corporate development could expect a total compensation ranging from $200-$275k, with a base salary of around $165k. Junior Corp Dev employees might start just under six figures, with bonuses taking them over. Mid-level managers could make about $125-150K with bonuses and stock options taking them above $200K. All of the senior managers are above $200K with significant bonuses/stock options.
Evaluating the Opportunity: Beyond compensation, there are several factors you might want to consider when evaluating a Corp Dev role. These could include the size and growth of the team, the company's acquisition strategy and track record, the industries they're involved in, and the backgrounds of the team members.
Questions to Ask: To get a better sense of the quality of the opportunity, you might want to ask about the company's acquisition strategy, the team's growth plans, the typical career progression within the team, and the company's approach to integration post-acquisition.
Remember, these are just general insights and the specifics can vary widely. It's always a good idea to do your own research and ask plenty of questions during the interview process. Good luck with your superday!
Sources: Corporate Development: My Experiences and Background, Got Corp Dev Offer - Compensation?, Development Comp Package - What to ask for?, Corp Dev Comp
bump
bump
Market comp depends on the city. What’s tier 2 or 3 to you?
Atlanta as tier 3?
Yeah think ATL as a tier 3 along with other non-super major cities
Still a city but not huge, with medium-high COL but not like Cali nyc bos mia etc
So you have a handful of good questions and are definitely thinking about the right factors. Lets go through based on topic:
1. Compensation
Every year Lion Equity Partners compiles 500+ points on Corp Dev comp, experiences, and # of deals closed. As of FY22, the average corp dev comp for someone with 2 years of corp dev experience (not including other industries) was around 115k with an average of a 10% bonus. This should give you the benchmark for the baseline. Personally, I would try and negotiate higher given your background and the additional context of the role paying above market. I would target a base of 140-150k and take the bonus range as is, but hey, that's just me.
I would also inquire about sign ons. They are not guaranteed in Corp Dev, but some companies will provide pretty material sign ons. Not really a point for negotiation, but definitely good to think about as your think about Y1 TC.
2. Quality of Opportunity
This is much harder to determine, but I can list out a handful of questions I like to keep top of mind for Corp Dev quality assessment:
1. How many deals do you look to close per year? Note: it doesnt matter if they say 1 or 10, but this should give you a better idea of WLB. It is rare that corp dev resembles IB hours, but I know people in the field regularly working 70+ so you want to have a pulse on things.
2. What is your approach to vetting acquisition targets? What is your valuation technique? Note: there are bad Corp Dev teams that use a simple EBITDA multiple, and there are corp dev teams with proprietary models that are extremely nuanced, making IBD models look like childs play. I have seen both. Try and understand the level of sophistication behind their approach.
3. Is there a standalone integration team? Note: this is important as you dont want to be bogged down with 50+% of your time being allocated to non-M&A work
4. Do we partner closely with the internal strategy team and or relevant business units to narrow down prospective acquisition targets? Note: this is to tease out the level of collaboration. If the business units and strategy teams are not bought in heavily, good luck closing deals.
5. What is the biggest hurdle when it comes to getting IC approval to submit an offer? Note: every org is plagued by their own struggles, but it is next to impossible to tell from the outside. This should be the right question to ask in order to get candid feedback on the biggest deal hurdles.
6. What does my role look like? Note: in a good role, you should own the model, should engage heavily with bankers on diligence request items, and should help try and work with business leaders to quantify synergies. In a bad role, you will spread comps, build inaccurate models designed to spit out a certain valuation (yes this actually happens) and will have limited exposure to real deal strategy.
Hope this helps, happy to answer any follow up questions as needed. Good luck. Corp Dev is a very cool role when you're on a strong team, and the fact that your entire team is ex-IB is a great sign. I wouldn't worry at all about MM IB vs EB as you stated in your initial post. I've worked with a lot of MM bankers that have impressed me far more than some of the BB / EB guys, so no need to think there is a material variance in quality. You should be able to assess the intelligence and the quality of the team through the interview process. Some of the stupidest folks I have worked for in Corp Dev had many years of IBD experience and M7 MBAs, so dont think strong credentials is a metric of success in Corp Dev.
Would say good teams go with comps approach for (2) perhaps if they also do a simple 1-2 tabs operating model to also get a sense of y1/2/3 projection when looking at comps. Much more straight forward and less toxic vs super nuisanced model that doesn't go anywhere and spending countless hours on these granular pointless modeling just because team is acquisitive or keen to learn and joined 10+ processes every year
For (3), definitely go with more integration work as one gets to learn business and how things work plus work together closely with subsidiary level executive, which will be helpful down the road pivot to non-corp dev functions. Rarely corp dev guys become CFO and corp dev is filled with ex-banker lifers. Better get diverse skill set and contact to parachute somewhere else down the road
Thanks man this is what I was looking for to a T and makes sense - I had similar thoughts but couldn’t articulate them as well.
Offer turned out to be ~140k base + 35% bonus (20% is gtd if you stay one year). I think it’s a strong offer
If this is after 2 years of IB analyst then sounds great.
Given the economy this is a great offer, what industry?
That is a strong offer, congrats on earning it! Working on a good Corp Dev team is actually a lot of fun and if you find the right team youll be working with a bunch of really sharp ex-bankers who have the work ethic but dont expect everyone to grind the hours like IB. Additionally you'll likely get a lot of exposure to deal strategy which is very different from a strategic vs. financial sponsor lens.
Again congrats on your offer, there really aren't a ton of strong corp dev teams out there that also pay competitively. I would assume your comp ramps pretty significantly each year you stay too, so just another potential positive
Corp Dev will never be as sexy as PE but it is a really great role and as someone who has explored many different M&A roles, it is by far my favorite.
Nobis incidunt non sunt odit deserunt. Est molestias dolores maxime quidem nesciunt. Aut consequatur esse quasi ex quis nulla id. Modi et voluptatem rerum consequatur et sed libero.
Sint commodi qui earum quo. Quae molestias eum delectus esse laboriosam velit. Reprehenderit dolor nisi exercitationem et. Necessitatibus quam nemo necessitatibus nobis est iste. Eum soluta natus porro iure dolorum. Architecto dolor quasi in quibusdam beatae voluptas consequuntur voluptatem. Illum eum numquam vel provident.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...