Negotiating after successful exit and reinvestment
I am the sole petroleum engineer for a PE backed private O&G firm. We have had two pretty successful exits. Due to ESG pressure, the PE firm who backed those two entities will likely not go for round three, which is a bummer but it is what it is.
I had a small amiunt of B-Unit equity in the first company, and a larger portion of equity in the second company, plus invested some of my own capital to get A units, so when I look at my total comp over the last 5-6 years, it's pretty solid. I did get divorced during this time which cased a large portion of that comp to be split. Additionally, due to the stress of the divorce, I received a mediocre performance review for 2019, the year of the proceedings.
My salary and bonus have fluctated over the years. At this point I am a reservoir engineer with 10 years experience who has helped build multiple companies that have transacted for over $500MM. Here is my comp history:
Going into this year, some things shifted pretty dramatically. We have a very small team, and 2 guys left the company so it is now just me, the CEO, the President/CFO, and an office manager. The CEO and CFO told me they want me to become a partner rather than an employee and that if I can show that I can put in the work and effort, I would be rewarded with a significantly higher cut of the equity. We are still negotiating funding but have received multiple offer letters because of our successful track record, but I haven't been asked to sign anything yet. I did not get a raise this year I assume because the former firm didn't want to give raises to a team they are winding down. We still own a small asset in that entity that will likely sell this year and totally wrap up the loose ends.
Before he left, one of the former employees told me pretty candidly to protect myself and consult an attorney before I signed any employment agreements. I have an employment agreement in place and it seems pretty standard to me (non-compete and NDA, if I quit or am fired for cause my units can be clawed back under certain provisions, etc). He seemed to be of the opinion that they would potentially try to railroad me without giving me enough time to protect myself.
In the few months since I had the conversation with the leaders of the company, I feel that I have really stepped up my game and have gotten great feedback.
So my questions are:
- Does my comp history seem appropriate? I believe the CEO and CFO have much higher salaries and bonuses but I do not have confirmation of that. I know they netted $10-20MM ea from the two sales combined.
- What is a reasonable target for a salary and bonus moving forward? How would that change if we were backed by a PE firm vs a family office or fundraised ourselves and formed an LP?
- What do I need to be on the lookout for in any employment agreements I am asked to sign?
Hi VP in PE - Other, whoops, looks like nobody chimed in here.... maybe one of these discussions below is relevant:
More suggestions...
Hope that helps.
Bump for the weekday crowd, could really use some insight.
Insight on what? There's no question or statement, just a title then your OP says you think you're posting in the wrong place.
Doloribus quibusdam eius eos id velit. Animi quisquam totam dolorum in quia consectetur exercitationem. Accusamus in aut expedita alias et sapiente voluptatem.
Vel dignissimos harum sed debitis. Sit magnam dolore adipisci. Cum officia incidunt et et sunt magnam. Quasi reprehenderit itaque ut perspiciatis.
Voluptatem non ut magni ipsa. Quia non tempore porro sit. Voluptas atque debitis minima vero omnis tempore architecto. Odio error a sed nihil quia non.
Sunt perspiciatis fugit autem deserunt. Pariatur voluptatibus officia ea suscipit. Numquam mollitia iure sed perferendis officiis dolore eum. Fuga et aut vero sint. Maxime aut soluta ducimus omnis enim animi.
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...