Negotiating Comp
So I am negotiating compensation with our founders, and I'm really trying to get an idea of what I should be asking for. I was recently promoted to director (titles are meaningless here, I have ~7 years of acquisition experience) for a $1B AUM REPE and handle most of the acquisitions on our platform . I get paid a salary below market, but primarily because I had been paid bonuses on transaction volume which was down the last 2 years. This is now switching to equity + promote being given to me per deal rather than a cash bonus being paid out at execution.
I work a decent amount of hours and weekends (60-70/wk), but I work remotely so I benefit from low COL. In addition to the equity, there is a buy-in of ~$30K for me per deal that would be added to the equity they give me.
What should my equity/promote ask be, given my salary and previous bonus structure, and the fact that I have buy-in out of pocket each deal as well.
Salary - $90k
Bonus - $15k/deal
If someone only paid me $90k a year yet made me pony up $30k per deal for buy in, I’d probably Luigi Mangione them.
lol I mean, all in comp before was more in the mid-$100s before 2024, but it's been low since then, that's why I want this to make sense. If I'm coming out of pocket, would it be reasonable to ask for $50K in equity + $30K out of pocket per deal or would that be too aggressive?
Also, on promote side, was thinking something like 3% is market for 7 years of experience, but not sure.
7 years of experience and mid $100s all in comp??? Am i reading this right
Correct, but I'm living in the Midwest and not Chicago. Mid $100s meaning $100-200K, not mid 6 figures
It sounds like you are significantly underpaid. Where are you getting $30k after tax to throw into each deal? Typically carry gets allocated as a % of the total promote that the company earns. If you are the primary deal guy, that should be at least a few %, maybe more given the AUM referenced.
I'm maybe a couple years younger than you so big disclaimer BUT:
$30k minimum buy-in PER DEAL seems insane. How can you pony up that much cash even once, much less be expected to stomach such concentrated exposure? Let's say you have $30k invested in several deals so >$100k: if there's a sector downturn you could be out of a job (esp. if you're at a syndicator) AND lose half your net worth at the same time. If all your equity is only in a couple deals in the same or similar asset classes (as opposed to carry in a fund with dozens of assets across multiple classes) your exposure is too high and likely not worth the risk unless you guys are absolutely clapping the market and you're risk loving.
So unless you're not properly communicating the value of your promote / equity you're prob way below market comp. And even if you're getting tons of equity and carry that seems like a weirdly lopsided comp structure (low base, low cash bonus).
Don't just take the word of some rando on the internet though - it takes 5-10 minutes to ping a dozen different recruiters and find out what's going market rate for your skillset. But if you're super below market these guys will prob not just roll over and 1.25-2.0x your base+bonus - you'll need actual leverage, e.g. an at-market offer in-hand.
Appreciate your point, and I agree, I discussed with my boss. Here are the terms I am working off of.
No minimum buy-in, but they'll match whatever I put in essentially 1:1.67. They approved my request that if I would put in $30k they'd match to $50K.
Additionally, approved at 2% of carry.
It sounds like a good first step; just make sure your promotion and equity reflect your significant role and the personal investment you're making.
There needs to be some way for employees to get a neutral third-party analysis of what total comp they should be paid. Sort of like a broker's opinion of value but for employees rather than properties.
not exactly neutral, but this is where recruiters / headhunters come in handy
Partly, but the recruiter's incentives aren't aligned with the employee's. The recruiter makes money when they convince someone to quit their current job and take a new job, but the employee might be perfectly happy to stay at their current job if the comp were adjusted enough.
The employee really needs someone more like an agent who's incentivized to maximize the employee's comp, whether that happens via a job switch or via a renegotiation of comp at the employee's current job.
Your bosses should be ashamed
90k is robbery. Salaries have absolutely flatlined. That’s too greedy. If wasn’t remote, I’d be looking for a new job.
lol this is a scam. Why do u even work there. This is finance slavery
https://www.wallstreetoasis.com/forum/real-estate/comp-database-repostupdate
bro review this - your comp, even for a super LCOL area, is super below market. Not to mention that asking you to contribute an amount that isn't even affordable given your salary is insane.
Salary is definitely below market I agree, I actually did apply and interview at a few other shops. In the midwest, associate to sr associate is not that far off tbh. $90k-120k is pretty much the norm. I was making $120-140k all-in from 2021-2023, so it's not like I was all-in underpaid imo. Only way I could get $150k-200k prior to my promotion was in NYC or SoCal and at that point I was losing money since I own a house in the Midwest which I've seen appreciate ~$100k as well.
I do agree on the min buy-in, I discussed this with my boss and he was good with removing it, and agreed to 2% promote + 1:1.67 match on whatever I want to contribute per deal. If I don't put anything in, my bonus would go up to $25K/deal. We are starting to do more deals, so 3-4 deals a year would put me at $165k-190k all-in, I think that's pretty reasonable for Midwest.
I’m sorry but you’re either lying or dumb. I know dozens of Midwest AM/Acq Associates making $150-$300+ carry
troll post
"In the midwest, associate to sr associate is not that far off tbh. $90k-120k is pretty much the norm."
associate?? you have 7 years of experience
I was corp dev for 2 years, MBA, 4 years of REPE.
Analyst -> Associate 2 years - > Sr associate 2 years -> Director now
I was speaking more to my previous pay, which 4-6 years of experience, yes in a non-Chicago based RE firm you are making low $100k.
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