Compensation on Long-Term Payouts
Hi Everyone,
I am a VP at a boutique investment shop (10-20 employees), structured similarly to PE. Recently, I independently secured a deal in a sector which the firm has never done in business previously. The deal will earn us approximately $15 million in fee revenue over the next 15 years. Given that we are a small firm, and this is the first time we have had a deal with such a long term payout, there is no precedent for how I will be compensated on this deal. The firm is offering me a generous portion of the proceeds, but they are resistant to paying me for the full stream upfront, or continuing to pay me if I voluntarily leave in the future.
My question is, how do larger shops handle situations like this? I understand that they don't want to take the risk of paying me on the full revenue stream on day one - but 15 years is a long time. If I continue originating deals structured like this, I will inevitably have to leave a lot of earnings on the table if I ever leave the firm. Is it unreasonable to expect to be paid upfront, at a discount? Or a contract that would pay me even if I am no longer an employee?
Interested to hear your thoughts. Thank you!
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