How’s Your Promote Structured? Need Advice for VP Role

Based on the most helpful WSO content, promote structures can vary significantly depending on the firm, market, and role. Here's how your offer compares to other setups discussed in WSO threads:

1. Base Salary and Bonus: A $200k base is competitive for a VP role in acquisitions, especially at a boutique developer. This aligns with other VP-level roles in real estate finance, where base salaries often range from $150k to $200k+ with bonuses or additional incentives.

2. Acquisition Fees: Sharing in acquisition fees is a common perk in boutique setups, though the percentage or structure isn't always disclosed in WSO threads. This can be a meaningful addition to your total comp, depending on deal flow.

3. Promote Share: A 15% share of the GP promote is within the range of what others have reported. For example:

   • Some VP-level roles in institutional shops or larger developers report promote shares of 5-10% for deals they lead.
   • Smaller or boutique firms often offer higher percentages (10-20%) to attract and retain talent, especially if the firm is leaner and relies heavily on key individuals.

4. Promote Value: The employer's goal of ~$160k per $1M GP equity invested, assuming a 30% GP IRR, 10% pref, and 36-month hold, seems reasonable. However, the actual value of the promote will depend on deal performance and the firm's ability to achieve those IRR targets. It's worth noting that promote payouts can be highly variable and are contingent on deal success.

Key Considerations:

• Market Comparison: Your offer seems competitive, especially for a boutique developer. Larger institutional shops might offer lower promote percentages but with more stability and larger deal pipelines.
• Risk vs. Reward: Since this is deal-by-deal and not fund-based, your promote payouts will depend on the success of individual deals. Ensure you have confidence in the firm's deal pipeline and execution capabilities.
• Negotiation Leverage: If you feel the promote share or assumptions are aggressive, you could negotiate for a higher percentage or additional guarantees (e.g., a minimum promote payout or a higher base salary).

In summary, your offer appears to be in line with market standards for boutique developers, but the ultimate value of the promote will hinge on deal performance. If you have confidence in the firm's ability to deliver on its assumptions, this could be a strong setup.

Sources: Promote Structure Alternatives, Promote from $500k to literally $0 - what do those who have been through a RE downturn recommend?, https://www.wallstreetoasis.com/forum/real-estate/re-acquisitions-promotecarried-interest-comp?customgpt=1, Is this associate compensation competitive?, What is your compensation in Real Estate Finance?