Why exit to corp dev
Don't understand why anyone in IB would ever exit to corp dev. Hours are 40-65 and pay is awful, saw some people quoting $300-400 all-in at the most senior level.
At that point why not just go to asset management or corporate banking where you'll make a multiple of this working similar hours.
Neither corporate banking nor asset management is the same type of work as CD. Most asset management roles comp similar to CD.
I know a senior (40-50 years old) in Municipal bonds at an asset manager and he pulls in $1.1mm/yr working low hours.
Okay? And I know people in CD who make a multiple of that. All compensation data in these types of front office and pseudo-front office roles are heavily skewed right.
You now realize most IBD skillsets are garbage and non-transferable to anywhere? It's only traditional PE/IBD (which both aren't really exit actually, you are doing same type of work, putting same hours) and corp dev would value such useless skillsets.
It is a buyers' market. If you are good enough for PE/IBD, you continue to make banks. If you aren't, please take 50% salary off and be exploited. Enjoy.
Edit: 13 MS and no one attempted to refute anything. Bizarre
Here’s the refutation: Sorry you didn’t a PE offer.
AM is extremely, extremely hard to get into, and you are basically beholden to market movements which you have no control over
Corp banking is no picnic either
I think $300-400 for corp dev MD sounds very very low
Corp dev is a corporate function where MD isn't generally a title. It's usually director -> senior director -> VP -> EVP. It's rare for a company to have a Corp Dev EVP. VP is generally the ceiling. A corp dev VP *might* make 400K all in.
It's higher than that at the VP level. I've talked to a couple of large companies about corp dev roles recently. Base was generally around $350k - $450k at the VP level with all-in being in the neighborhood of $700k - $800k. This was for highly acquisitive companies. Also, make sure to realize that a corporate VP is much more senior than a VP in IB.
You’re right, $300K-$400K is definitely understated. Our EVP’s (directly under our Chief Development Officer) easily clear $700K-$800K and possibly over $1.0M per year when you factor in stock options.
Is this in-line with the EVP pay for other divisions at your company? Would corp dev make more than a traditional corp finance role at the same level?
Being tied to the actual project is what it’s about! Way better hours. pay terrible? On hourly basis? Not at all.
What keeps you coming back is being part of a team actively looking for ways to improve a company. You get to be the strategic thinker, executer and the project manager. Did it before IB and I miss a lot of aspects of it.
You realize, money isn't everything in life, right?
Excuse me sir but money is life
I make ~400k as a director, though admittedly I am on the higher end. CD roles have a somewhat bimodal distribution - the deal heavy ones with good comp that require IB/deal chops, and the ones that are comp'd more like regular corporate finance where M&A is not prioritized. As an example, a senior CD role like head of M&A at a PE-backed rollup should easily clear $1m a year.
Associate (got him from banking) is abroad on vacation this week. We have a couple live deals right now. If this was PE/IB, he'd have been told to cancel his trip. I told him bring your laptop, but unless I slack you don't need to even really need to check your emails. I haven't slacked him. I just do a little extra work on my end, push some work to our buyside advisor (RIP banking analysts), and deprioritize/adjust some of the deliverables based on capacity.
I could have forced him to grind and theoretically there's the option to work evenings to get every single thing done ASAP, but I'd rather go to the gym and watch TV. My boss is pretty reasonable, and I don't have some asshole PE/IB MD asking where the materials are.
How many YoE was it to director and did you start in IB? What are your thoughts on IB vs. corp dev in terms of salary, career progression etc. after being on the other side?
About 6 years to director. I got lucky in a couple different ways in that I "skipped" banking and went into a deal-heavy corpdev group right out of undergrad where I got lots of exposure. Overall probably means someone who went the traditional banking route and top bucket likely has slightly better technical skills than me, though I might win out in terms of deal diligence/process and some market/strategic type stuff.
IB is going to make more money, especially looking at straight cash. In CD, a good portion of comp will be in equity - RSU's with some vesting schedule, or PSU's that only pop at an exit event (but can be worth millions). At the beginning of my career, I made less than I would have in banking, and in the last couple years I pulled even/slightly ahead. Most likely the bankers are about to start pulling ahead, again, and I might not ever catch them lol. But like the other guy said, the marginal dollar matters less and less, at least to me, though the monkey part of my bran like numbers going up.
IB is going to have worse hours generally. I'd also say combined with the nature of the work, it can be definitely be more soul sucking. My work tends to be a lot more focused - for example, most of my production is a sets of relatively clean PDF pages of Excel analyses with commentary, etc. or an emailed memo versus having to produce exhaustive decks and formatting in Powerpoint. And it's focused on specific diligence topics, a lot more cross-functional on underlying trends / operational nuances than pure financial analysis. Thankfully, I've never had to make a CIM and our approval memos are typically a dozen pages.
Deal crunch time is deal crunch time regardless, and stakes are ultimately higher when you're the "principal" versus an adviser or service provider. I've sent emails at every hour of the day, pulled all-nighters, etc. including hopping on a meeting at 4am local time after a destination wedding + afterparty. But I have the optionality to chill the fuck out when I need to / based on my judgement.
Career progression is probably a little more linear in banking where up to VP there is a clear path. In CD, it can be a little more difficult and require some job hopping, since new seats don't often open up in the same organization. But, CD in a small and faster growing org can be very nice - you're never more than one or two steps away from the C-suite, and it can be a quick path there.
This is how it should be in a deal heavy group. I'm a Manager (VP level for banking) at a PortCo of a PE firm and report to our CFO. Nature of O&G is we're always in deal mode so there's always things to do and some times you need to stretch into the night or weekend, but for the most part you get stuff done during the business day. We are in the middle of due diligence on a deal right now and I had to attend a wedding last weekend...boss told me essentially the same thing as poster here...he'll text me if he needs anything but for the most part he'll pick up the slack while I'm gone. He refreshed the model as needed, updated status trackers, etc. It's not that big of a deal. You get to still do the things that are interesting to those who find it interesting (modeling, strategy, etc.) and you get to do it at a much more humane pace. Do you take a discount to do the humane pace? Absolutely, but marginal value of money at a certain point and it's not like $200/$300/$400k is chump change for most of america.
How is your $400k set up? Does that include equity / incentive units? What industry?
I'm in Year 1 as a director at a small PE healthcare roll-up and will be at ~$250k all-in this year before equity. Congrats to you regardless, that's a great gig.
$160k base, 50% bonus, remainder RSU's. I've been around long enough that I vest the equivalent of my annual grant each year now. I'm at a small/midcap publicly traded tech co.
Congrats to you too. Depending on what your equity is worth I don't think we're too far off from each other. Plus staring at my RSU's and how the market performed recently just makes me sad.
I'm in it for 2 more bonus cycles then I'm jumping ship to a corp dev/strategy role. Senior management at my firm has a "banking is life" and "we own you" mentality and I'm tired of having to explain to them that I have no intention of building my life around my career, my career needs to fit into my life. I want to enjoy my life completely, not just 1 or 2 weeks per year when I'm on vacation.
Were you A2A or an MBA associate? Curious how you decided when was "enough" for you - is it a savings / net worth amount?
I was A2A but I also have an MBA. I've never subscribed to the banker mentality of doing everything for the deal and false sense of urgency of needing everything right now for no reason and as I get closer to the next rung of the ladder for Director promotion I just can't deal with the nonsense anymore. The push for back to the office full time is also a deal break for me as well, the major cities (NY, SF, Chicago) where the majority of banking resides aren't worth living in anymore. As a VP the exits are a lot more attractive and my sector expertise is in Tech so I have considerable options on that front as well. The waiting 2 more bonus cycles is less about actually needing the money and more that I have a handful of deals I want to see through but I also want to be paid for them.
In the next few years as the major cities continue to decline I think we'll see a lot more people at the VP and above levels exiting IB, realizing it's just not worth it anymore. Remote work opened my eyes to the possibilities being able to live somewhere I actually wanted to live and still be very effective at my job and I'm definitely not the only one thinking the money just isn't enough anymore.
I am considering doing something similar as well. I have also just thought about moving elsewhere within the bank, I am at a BB so there are a lot roles that could be potnetially transferred into, even if its more of some random internal operations type role, depnding on comp of course. Easier to make sure I get to keep remaining RSUs this way too.
A VP I worked with went to CorpDev to be closer to family and actually be able to spend time with them
Corp dev and Corp banking salaries and hours are comparable. AM pays better but is harder to get into and much more niche.
Lots of people hating on OP, but as I get more experience I agree. You should look for the path that maximizes your pay per hour, nothing more nothing less. Corporations use you for labor so you should use them as well and get the greatest pay per hour that you can. Of course there are nuances within this (get paid a ton in IB and lose your soul vs get paid decent in Corp dev and have hobbies/friends/etc) but that should absolutely be the guiding principle.
Just to share my limited experience in this; I interviewed for a CD role in a highly acquisitive techco and the pay was insultingly low. I am sure that work life balance would have been slightly better than my current sellside role but I also got the feeling that promotion timelines were also to be desired. Don't extrapolate my experience elsewhere just wanted to add another data point to the conversation
I know I’m bumping a 6-month old thread, but sharing my knowledge having over 5.5 years of Corp dev experience.
The main attractive part of corp dev at mid/senior levels is the equity, especially in PE-backed companies. It’s not uncommon to get equity at the manager level now, but you’ll get meaningful chunks at Director level and over. Here we’re talking $750k over the course of 3-7 years when the company exits for Directors and $1M-$10M for Heads of Corp Dev groups. For working, at times, half the amount of hours as those in PE, it’s similar equity upside to carry that a Senior Associate, VP, or even Principal at LMM PE shops would get.
The thing is, it’s obviously not guaranteed and more contingent on your portfolio company performing. I’ve seen people exit in 3 years with equity in mid-level roles and make almost $1M and then I’ve seen companies hold for 10 years for everyone with equity to end-up with nothing. Usually the key is a 3.0x return - under that you get nothing and over that (and some portfolio companies could get sold for 5.0-6.0x ROIC) you could hit a home run. I would say the goal if you want to make a killing in Corp dev is to jump around and get to the top as quickly as possible, and then get the chance to be part of multiple successful exits. If you get to head of Corp dev in your mid 30s, it’s not unreasonable to think you’ll be part of potentially 3 or so successful exits by your early 40s and pull-in $10M+ in total equity from those total.
There are some PE Associates that get sent out to portfolio companies to essentially prove their own investment theses out and I think that’s a great path - usually these are earlier stage portfolio companies too (or essentially start-ups where a PE firm like Summit allocates $25M to grow a platform) and the expected exit on these tends to be less than 5 years (sometimes as little as 2-3). Definitely not a bad way to A. Start at the top in your late 20s/early 30s; and B. Get a sizable check. What’s surprising to me is a lot of folks in those backgrounds just go back to PE for Principal or even sometimes VP spots (and these are LMM funds usually). It’s personal preference - you’re more guaranteed a path to wealth in PE, but IMO the hours are not worth it.
Finally, I’ll say this - in Corp Dev you actually have time to have a life outside of the office. My partner did PE for a reputable firm before going back into the corporate world and I felt like he was a sub-human for the span of 2 years. I play soccer 3 nights a week, workout 4 nights a week, and go to tasting menus and dinner dates with friends on random Tuesdays. I enjoy cooking and in a remote setting, I usually have time to run to the store during the day, and cook an elaborate dinner. I also run a 501(c)(3) I’m very passionate about. My partner and I have taken 4 international vacations this year lasting about a week long. You realize that even in a mid-level Corp Dev role, you’re taking in as much or more than most of your other social colleagues ever will, and have equity upside that they can’t dream of. $200-$300k in total comp is a lot of money for mid-20s/mid-30s for 95% of America.
Heads of Corp Dev at PE-backed companies are treated like executives - and that includes the lucrative compensation that goes with it. I’ve seen a lot of folks in corporate America make $2M+ in a year who are extremely mediocre. We’ll see where the road lies ahead, but I’ll gladly strive for being an executive in America rather than be one of many in the rat race that is PE or IBD.
What comp are you seeing at the senior manager and director levels?
I’ve recently seen comp reports that put Directors on average at about $200k base (call the range $230-$175k), bonus average between 25-30% and all have equity (this is both public and PE-backed). About half of these roles are also remote.
I agree with these points in general, but it sounds like you live in a tier 2-3 city based on how you view your place in the world and among your social set with $200-300k comp. This is great if you can be happy with this kind of life in Nashville or Charlotte, etc.
I think the conflict arises when you make this move while living in tier 1 cities. Making $300k in your mid-30s will put you squarely below 50th percentile in NYC/SF peer set (not necessarily even just IB/PE folks). After the taxes/rent, it also is legitimately a tight budget to raise a child on once that comes into the picture. You most likely still rent.
I’m just going to put a counterpoint to your perception that being a “executive” puts you on a higher plane in the corporate America pecking order. Since you give the example of PE portcos being the holy grail, 99% of the time you are the PE VP’s bitch. Even the CFO needs to respond to some rando 32 y/o VP at the sponsor demanding to see some board slides or dashboards on your vacation (the partner is CC’d of course). The only people in a portco that PE people treat somewhat respectfully (not always) are the founders/CEOs that rolled a significant amount of equity into the deal or influential industry leaders they want to stay on the good side of. The rest are just names on a spreadsheet that are all fungible. This is part of the reason that the PE associate (who likely didn’t cut the promotion cycle) does a stint at corp dev and tries to get back to PE after their tour of duty.
I’m not trying to argue corp dev is a bad career at all, it can make all the sense in the world. But I wanted to give the readers this perspective which is rooted in my experience dealing with portcos.
Appreciate the counter perspective and you bring up some good points that I just wanted to follow-up on.
For what it’s worth, I live in a significantly higher cost of living city than a Nashville or Charlotte that is right up there with NY/SF (you can guess between LA/BOS/SEA/DC). In full transparency though, I’m definitely the only finance/consulting/big law person in the social circles I have and definitely didn’t go to an Ivy or equivalent, so your sample social circle may vary. Finally, just so we’re clear, $350k puts you in the Top 10% of household income for both NYC and SF. IB/PE/Consulting/Big Law (and hey we’ll throw Big Tech in there too) really skews your perspective of what life is like for everyone else in the large expensive coastal cities most of the people on this board live in - obviously not everyone can have these jobs, and this forum represents an absurdly privileged group of folks who are generally very well-educated ultra high-achievers who have been plotting out their career moves in Succession-like fashion since they were a freshman or sophomore in college. This is not normal.
To your point about being an executive, totally agree. I don’t think there’s any escaping that though and that goes for virtually any position or industry. If you’re CEO, you’ll still be managing the interests of the PE firm/Board of Directors; if you’re a GP at a PE firm, you’re answering to LPs. Big Law, IB, Consulting you answer to clients. Besides starting your own company from scratch and keeping all the equity, this is somewhat inevitable.
It’s really my opinion that the PE folks who get into Corp Dev and usually go back, usually do so based on personality. I think there is a road for them to easily get to Head of Corp Dev or even CEO down the line in a relatively short amount of time than most who get there; but to be really great at that, you have to build cross-functional relationships, which involves dipping into and engaging with the excruciating general incompetency of other functions at a company like HR/Business Development/Marketing etc. It’s not fun, makes you feel like you’re killing your own brain cells, and takes a lot of patience that is a completely different skill set than you’ll see at the 30,000 foot view in PE. From a financial standpoint though, PE provides one of the best low-risk/high-reward scenarios for sure, so I definitely don’t blame them if that’s what they do best.
Close to 200k working legit like 20-30 hours some weeks. If that’s a fail, then I wanna fail some more
Pretty much my life. Home by 5 ~45 weeks a year, usually not working the entire time. The other 5ish are home by 8-9 when in crunch time on problem deals. Maybe 2-3 Saturdays worked a year? At the end of the day, I bring home ~200K all in and work 1/3rd the hours of an equivalent associate/sr. associate in banking. Would I love 400-600k? Definitely! Do I want to work until 1am 6 nights a week to do it? Nope. And who knows, a new product launch or large acquisition could easily see me or a peer move to be making that 600K all in.
Is Corp-Dev perfect? Of course not, but no job is.
Depends on corp dev where.
In my view and having seen friends exit to corp dev at various levels I can share this little bit of wisdom.
1. Big listed firms are pants. Your stock options are worth jack shit and your salary isn't anywhere near IB
2. Private PE backed firms where you get a slice of the sweet equity in the MIP and can buy in on each ownership turn can be very fruitful. I've seen people make £15m+ over 3 PE cycles and retire. More than they would have made at an IB during that time with far less stress.
Other option is just go to a tier 2 bank like HSBC / Nomura / DB that pays well but hours aren't tough. Once you're senior you do sweet fuck all and coast, get some mandates from balance sheet or lending favours owed. Push all ownership of execution on Ds and VPs.
Seniors at T2 banks live the WLB dream.
As many above have noted, there are massive dispersions in corp dev exits. I left about 6 months ago from an EB VP role (ignore title) to a $B+ “startup” and overall I’m pretty happy. Senior dir/VP role reporting directly to CEO/CFO, cash comp in the mid-to-high 300s between base+bonus and enough equity where an exit would be very meaningful. Yes, on a cash basis I’m making less than IB, but I’m willing to take the risk on my equity (which could be worth low-to-mid 7-figures or zero depending on outcome). Either way I’m good with the fewer hours, less stress, 5 weeks vacation and seat at the decision-making table where management and board specifically asks for my advice/input and trusts me. Idk where there things will land, but feel like I made a good decision.
Nice. What does your role entail? I'm at a similar seniority level and looking to do the same this year. In a similar boat where I can absorb the cut and look to build upon it outside of IB. Also, a 3 handle is great in the real world. We all get skewed perceptions in this industry...
A little of everything, surprisingly similar to banking given intellectual engagement, but with way better WLB. Responsibilities include interfacing with strategics and investors to keep them up to date on our story and guide potential future deals, tracking the competitive landscape and how we fit, leading/guiding bankers and consultants on external work and projects, attending industry events to help increase our company profile (as related to the first point), and basically anything else that the CEO or CFO need done or have a question on.
How did you go about finding your role? I’m at a similar level (director — ignore title here as well).
I knew my desired industry, geographies and level, so I opportunistically searched for around 9 months based on open postings. I have great deal experience so I wasn’t worried about looks. I also didn’t have to leave banking, so I used that as leverage to negotiate when I was interviewing, i.e. after I got them interested I made them chase me until I got something I was truly excited about.
I would NOT recommend F500 corp dev - the money just isn’t there due to the lack of equity. PE-backed has lower cash comp, but more upside
I’d say corpdev is best for former consultants, not necessarily IBs. Couple of pros:
1) Hours are way lighter.
2) The work is way more creative, humanities based, as opposed to analytical.
3) Buy side M&A is always easier: budgets are big, responsibility is shared with internal clients, KPIs are lenient, and theres downside protection: if a deal fails or you fail to negotiate a discount, you can blame it on the counterparty and be relatively safe
4) Corpdev teams also have a separate M&A execution team, which handles all the monkeywork (dd, modelling, legal etc.) leaving you with a focus on the bigger, strategic picture
I moved to corp dev after a few years at an EB in LA / NYC / Chicago (ignore the username), and I do regret it. I've been trying to leave and I sort of feel like I didn't fully realize how limiting it was when I joined.
My biggest issues with corp dev are:
That being said, I think corp dev makes sense in two circumstances:
Otherwise, it's really limiting in terms of future mobility (I have been trying to go to a fund of some sort for 10 months now and I should have taken the one offer I got), head hunters are horrible because they will just try and send you portfolio operations roles or IB.
I might honestly go back to IB for 10 months and then start recruiting for the buyside because I don't ever think I'll be able to buy a house, pay for private school tuition when I have kids one day, etc.
If you are in IB now go to a fund first and then you can try out corp dev later, but to maximize optionality you should go to the buyside for 2 years, save some good money, and then absolutely try it later on once you maybe have different priorities (and don't want to work until 11pm every night for the extra money).
But yeah personally for me I'm about to gfto I miss the days of being more high functioning.
Did you leave IB as an AS1/2? Surprised your corp dev offer was low 100s. Would’ve expected something closer to 200k if not slightly above.
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