Is This Comp Too Low?

Hey Guys, Im currently interviewing at a GE firm based in NYC with an AUM of ~$1bn. The team has some pretty good guys mostly ex-JP or goldman. I've just become a 2nd year analyst in banking and I've been told I'll come in with the title of an "associate". The comp base is 120k with an expected bonus of roughly 90-100. So pretty much in line with banking I guess. But I'm just wondering if this salary seems low given I'll be an "associate". On the plus side the firm is only 2 days a week in office and the rest online.

If anyone has any datapoints on what different growth firms are paying analyst 2's and associate 1's that would be great. Just want to know if I'm wasting my time here. I also figure that unlike PE, most of the well-name growth firms are only like $~5Bn AUM (ex. lead edge) so this wouldn't be a bad idea to grab a spot in a place of this size?

7 Comments
 

Based on the most helpful WSO content, here's what you need to know:

  1. Compensation Comparison:

    • For a 2nd year analyst transitioning to an associate role, a base salary of $120k with a bonus of $90-100k is generally in line with what you might expect in banking.
    • In the context of Private Equity (PE) and Growth Equity (GE) firms, compensation can vary significantly based on the firm's AUM and location.
  2. AUM and Firm Size:

    • Your prospective firm has an AUM of ~$1bn, which places it in the lower middle market (LMM) category.
    • For comparison, a small PE firm with ~$100m AUM might offer significantly lower compensation (e.g., $72k base with a $6k bonus per deal).
  3. Geographical Considerations:

    • Being based in NYC, the compensation might be slightly lower than expected due to the high cost of living, but the hybrid work model (2 days in office, rest online) could be a significant perk.
  4. Market Data Points:

    • For a 1st Year Associate in PE, the compensation can range from $229k to $277k, depending on the firm size and location.
    • For a 2nd Year Associate, the compensation is around $267k.
  5. Intangibles and Firm Culture:

    • Consider the qualitative aspects such as team quality, work-life balance, and growth opportunities. The team being composed of ex-JP Morgan and Goldman Sachs professionals is a positive indicator.
  6. Decision Factors:

    • If the firm offers good learning opportunities and a supportive culture, slightly lower compensation might be offset by these benefits.
    • Ensure to clarify the deal participation structure, as this can significantly impact your overall compensation.

In summary, while the base salary and bonus seem reasonable, it's essential to weigh the total package, including work-life balance, team quality, and growth potential. If these align with your career goals, it might be a worthwhile opportunity.

Sources: Is this associate compensation competitive?, "Analyst" vs "Associate" in PE (2018), PE Associate Offer - Comp Too Low?, Q&A: 3rd Year PE Associate ($10bn+ AUM, MBO/LBO, equity, mezz, distressed debt), Promoted to associate but average base salary bump

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 
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Feel pretty much in-line with what I'd expect. As I've said in the past, the people that come in here and tout massive PE Associate salaries are the outliers. I think if you're in the 200k-ish range all-in that's probably more of the norm.

Plus, it's only a $1B AUM platform, and you're only in office 2 days a week. To me that's work $10-20k in itself from a lifestyle perspective. 

Assuming the fund is doing well and the culture feels pretty good, I'd say it's a solid offer. Given the size of the firm, maybe there's a chance for you to stay on for longer than two years if things go well. 

 

Is the bonus 90-100k or 90-100% of base? Your compensation seems reasonable although potentially slightly below average. It’s certainly not low enough that you should pass up on an opportunity that is otherwise a good fit for you.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/
 

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