How should I ask for equity?
Hey everyone, I’ve been interviewing with a large firm (over $15b aum) to manage a major metropolitan redevelopment ($500m+ investment). Role would be director/VP and cash+bonus comp is looking to be around $250-300. However, there is an opportunity to ask for equity in the project as part of my comp package. I have no clue on what is a reasonable ask or where to even start. Would appreciate hearing out your suggestions or how to think through this.
If you have anybody you can reach out to at the firm that you trust I would recommend seeing what they say. That's going to be better than anything we can tell you. Otherwise, see my guesswork below.
Is the $500m equity or does that include debt? A point would be worth $325k-$750k depending on whether the $500mm includes debt and assuming you get hit a 2x equity multiple on the development and the promote is worth ~15% of the profit. I would expect carry to be around your base salary in value each year (very rough estimate, can very wildly), so if this is a 5 year development then a point seems relatively reasonable. If you have nobody at the firm you trust to ask, I'd probably ask for ~3 points and settle for anything over 1. For the position you're going into I would expect the absolute ceiling to be 5 points, and that's if you're very directly responsible for the outcomes on the project. Most likely you'll get 1-3, and most likely 1.
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