Whats the deal with board seat gigs?
I once had an old-timer tell me the sweetest gig in the world is becoming a board member (Non-Equity) and get a fat paycheck to show up at annual meetings. How do companies recruit for those advisor board seats?
I once had an old-timer tell me the sweetest gig in the world is becoming a board member (Non-Equity) and get a fat paycheck to show up at annual meetings. How do companies recruit for those advisor board seats?
+41 | Boomerang from PE back to IB? | 6 | 2d | |
+40 | Trading PE Secondaries? | 27 | 2d | |
+34 | Best Tech PE Deals Ever? | 29 | 1d | |
+31 | Tech PE oncycle ranking | 24 | 4h | |
+31 | Joining an exciting new Software Rollup over PE/ Growth Equity? | 24 | 1d | |
+20 | Advice Needed: Starting Career at Smaller PE Firm | 6 | 2d | |
+20 | Autism in PE | 4 | 3d | |
+20 | F500 Corp Dev (Manager), Or PE Portco Corp Dev (Mid-Level) | 5 | 3h | |
+19 | PE BD/IR | 7 | 4d | |
+18 | PE offer — Post reference check waiting too long | 6 | 1d |
Career Resources
4 meetings a year, typical payment is $200k+ in the form of cash and stock. Sweet is an understatement.
Go look at proxy statements for any F500 company and you’ll see director compensation and what their requirements are.
Depends on the size of the company (and owenership type). For my firm (LMM PE) I would say has 3 types: Former owners & executives, PE Firm member, and other connections. Others connections have contained past executives and board members from other portfolio companies. Or a lot of the times partners will have made industry connections and friends who are at least remotely involved in the industry and have some management experience.
TL:DR - "Recruitment" = partners' friends who have passable resumes to be board members
This might just depend on the company/industry, but is it mostly management experience that counts when a company is looking for a new board member or do companies also look for certain specialties/expertise? I sometimes see board members that were initially outside advisors to the company (e.g. accountants and lawyers) but maybe this isn't as common given the potential conflict of interest?
It depends on what the owners (in my case, LMM PE Firm) want in their board. (As a side note, I keep emphasizing my case because it is a small sample size and can vary a ton depending on many factors).
Management experience is a minimum for us, it is kind of the idea that how can a board member be helpful in advising the current management team if the board member has not been in their shoes before? There is a signaling effect here too, it gives the board members a certain amount of 'respect/clout' that qualifies then to be there. Beyond this, we look to have a diverse experience of boards members too, so some may be more strong in certain areas than others.
We have not had any outside advisors who have joined boards, I don't have the exact answer for this but conflict of interest could be one.
With smaller companies I'd wager this is highly relationship based. For a small tech company, they might look for very experienced software engineers in leadership positions, or a founder who has left a successful tech startup after being acquired and therefore has a wealth of experience growing a tech company. I have to believe that this is simply a matter of meeting someone or having someone in your network that fits the bill and reaching out.
If we're talking large F500 corporates here, you'll see a lot of current and former CEOs on the boards of other companies in non competing industries. For example, the current CEO of The Hershey Company serves on the board of New York Life. Here I could see it being less of a relationship based game in that the figures chosen are already well known and lots of info on them is already published making it easier to seek them out.
If you are a PE associate / VP on a board, do you get to keep that 150-200k pay? Or does that go back to the firm
Bump. Interested in this as well
If you're on the board of the portfolio company, then it's basically written into a monitoring fee for the PE firm.
Here's a good overview btw: https://www.lexology.com/library/detail.aspx?g=5a240abd-1ef7-4898-8016-…
Reminds me of the case against Monomoy Capital Partners. It's a little different here but they made their LPs pay for their in-house operations team. Check it out - https://www.pionline.com/regulation/monomoy-capital-pay-19-million-sett…
Work at a MF. None of the fund investment team board members get compensation for their role as a director. Our industry advisors who are affiliated with the fund do get compensated for their role as a director.
Damn :(
Do you get paid anything as a board observer? Wondering if it is worth negotiating with PE firms to allow for a board observer seat for any deals I close
No you do not get anything as an observer.
That's a good way to earn a reputation...and not a good one.
what’s so bad with board observers? I see quite a few people putting it on their LinkedIn, but I genuinely wonder what do they do as observers
Many are through your network by my understanding.
A former boss of mine is on the board of a reasonably sized tech company because the founder was a friend of his from B school that valued his opinion/liked him.
A friend of mine’s mom is a board member of a billion+ business because of early business connections they made in their career which resulted in the board seat. Compensation for the latter example is in the hundreds of thousands a year for literally no work. Very sweet gig.
Sunt nemo deserunt nihil. Laboriosam laudantium in est debitis earum nihil earum. Fugit veritatis perferendis non fugit laboriosam. Quis et mollitia quis.
Consequatur aut cum voluptas. Veritatis neque quidem facere ut earum doloremque. Et libero et ut officiis aut quo et.
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...