Analyst/Associate Comp Question

Looking for some quick feedback from you all.  Likely going to be hiring two acquisition analysts/associates in DC and one in Dallas in the next few months, and I'm trying to make sure I'm fighting for a comp package for this person that is attractive to the right quality of candidate.  I always felt like I was underpaid when I first started out so trying to figure out what a good comp package would look like for someone with 2-3 years of institutional investment sales experience.  Firm has $4B+ in AUM and has a couple of different fund mandates, but we run pretty lean so we haven't hired for these levels in a few years.

I've been told that $65k + 20% bonus for DC and $55k+ 20% bonus for Dallas seem reasonable, acknowledging that this will increase quickly as the person gets ramped up over 2-3 years.  Would appreciate any thoughts (ideally by market).

 

The bases could turn some otherwise strong prospects away. In DC, $75K plus or even $85K for base is more market for the person I think you want. Dallas I'm less sure on, but the $55k just seems low. I mean strong UG intern experience only candidates can probably land $55k base in Dallas (they can in Miami, and I think salaries would be similar). 

 
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Too low for either city based on the prior experience you're looking for. I'm an analyst on the West Coast, and I came to my firm (also a lean team) with prior experience in Big 4 Audit and corporate finance. My last pre-REPE job paid me $85k + 10%, and my current firm offered offered $65k + 10%. I asked for and got $75k + 10% as my starting comp. 

Granted, my prior experience wasn't in investment sales or direct RE investments, but I had years of work experience that was still within CRE

 
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OP, I think you're getting the picture that it's too low. I agree - those are kind of laughable, non-starter salaries for someone with 2-3 years of experience, especially from IS. At 2-3 years, they've prob cut their teeth and have churned through the days of making peanuts (yes, can always have a bad year on commission). Or, at 3 years, they might be on the cusp of a promotion or a larger vig. 

I'd ask yourself to be honest and think about what this hire's impact to the firm will be. Do you want to have to coach them? Do you want them to hit the ground running day 1 with no hand holding? Are they just going to be putting together some Excel reports or are they driving the bus on underwriting? You gotta pay for the relevant talent you want. Go in with a range you'd be willing to pay (for example $70-85K base in DC with 20-30% bonus for someone with 0-3 years of experience). In your interviews, you should be able to weed out who you would pay more for pretty quickly or the type of talent responding to the post.

 

One more thing, if you pay at your lower range you should accept you will have some medium to heavy training.  If you don't have the time to train then you will need the higher comp.  IS, unless you are doing equity recaps, is not super math focused.  You want the debt and equity guys, who have experience with structure, covenants, and of course PSAs as they do acquisition financing.  They get more reps.  I come from this background and run circles around ex-IS guys.  But maybe the truly good ones are at Apollo.

 

No doubt, and I get all of that.  There is my opinion which aligns with the comments in this thread, and then there are the opinions of senior management which I have to manage and navigate on my end.  We like the IS analysts who can just rip through models and understand real estate/how to frame an opportunity.  Lump in less training needed and that's what we're after.  I'm just getting a sense of the market so I can position management appropriately and have the authorization to pay a "market" salary. 

 

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