Hi
Currently exploring an opportunity as an exec at a financial firm which is backed by a PE firm, they have base plus bonus and are touting an executive comp in form of equity. Does any one know how it works, how is it valued, what happens in case of events, what happens when there is a sale to another PE and so on
| +28 | Reference checks after final round | 13 | 15h |
| +25 | What do you think of PE Value Creation Careers in 2026? | 7 | 3d |
| +23 | Those who left PE for Corporate, why? | 17 | 7h |
| +21 | LT Career Path after MF PE Associate Program? | 7 | 1d |
| +19 | "VP of Finance at PortCo XYZ" | 3 | 4h |
| +19 | State of PE BD in 2026 | 7 | 16h |
| +18 | What are deal team responsibilities of a VP at your firm? | 7 | 14h |
| +18 | Is the lifestyle really better? | 17 | 1d |
| +13 | Is it too late for me? (Rising College Junior) | 5 | 1d |
| +12 | NY LMM PE Recruiting | 3 | 5d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Will appreciate a response soon as I need to make a decision soon. Thanks in advance
My brother… if you are getting a job as an executive at a financial firm that is sponsor backed and do not know how equity works you are a legend.
I know how public equity works in terms of compensation, I don’t know how Private stocks work
Can't you just ask the firm how it works? Very little to go off from your post but in general you should expect your equity to have a strike price (can vary by firm how this is structured, but can be based on the firm's current mark or on an implied share price basis), vesting period (5 years is the norm), and will pay out with a change of control transaction. Depending on the role, there may or may not be room to negotiate the specific terms of your agreement.
The firm can also probably put together an illustrative valuation of your equity in various scenarios, exit values, etc. so you can get a sense for the actual expected payout. If it's a significant amount of money, would also recommend having a lawyer look things over to make sure everything makes sense.
Thanks, this is helpful. I get some clarity at least. The firm itself just wants to put together an offer and wants me to take it, I don’t have an offer yet, hopefully in a couple of days.
Can you recommend a law firm?
If typical vesting is 5 years what happens in case current investor decides to pull out and a bigger one replaces it? Also, typically do such firms pay an annual stock like public ones or is it a one time (typically), what happens if I leave the firm? In a public scenario they let you sell RSU’s or stocks, how do the PE backed firms work, there’s no liquidity at all
Don’t have any specific firms in mind but if you have anyone in your network (financial advisors, other PE backed execs, accountants, etc.) they can probably refer someone.
Re: your other questions, vesting accelerates at exit (i.e., you’ll see the full amount even if your firm exits 1.5 years into your hold period). Equity grants are typically one-time (there’s no “refresher” concept) but can potentially get additional equity one-off (for promotion, retention, etc.). At least in the middle market there’s no liquidity mechanism unless you leave (when the firm may have an option to buy out your vested equity) but for larger firms there may be a secondary market. I’ve really only heard of that happening at huge unicorn type startups rather than traditional PE-backed companies though.
Voluptate quis soluta fuga omnis ut voluptatem aut. Rerum quia aut velit. Dolor occaecati et doloribus voluptate deserunt.
Provident eveniet sint dolores ullam enim aut. Quia ut soluta et veniam nobis atque hic. Dolorem perspiciatis sapiente pariatur quibusdam perferendis corporis quibusdam. Omnis est nam qui porro.
Debitis laboriosam velit rerum amet unde quam inventore. Sint distinctio dolor optio fugiat natus quia. Praesentium nulla harum voluptatem qui. Quidem consequuntur quaerat assumenda in ut. Similique eos quis ullam voluptatibus veritatis qui. Ea magni et veritatis itaque aut voluptates maxime voluptatibus.
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...