Negotiate for higher salary after two years (Associate / PE)
Here's the deal, looking for advice on how the negotiate for a higher salary this week:
- Worked for two years at 2bn PE fund, previously two years in M&A
- Won't get promoted to VP until January 2014 and no salary increase between levels
- Accepted low-ish offer in the first place, didn't know better, know now that previous associates made 15% - 20% more, there is no carry until VP level
- Struggled in the beginning as youngest associate ever, was hired for post-MBA level without enough experience
- I'm performing at the right level now, have completed two deals this year (sourced one of them)
I'm scheduled to speak to the relevant person this week (he doesn't know why), how should I set the tone?
My working hypothesis is you get a raise by switching firms, interested in hearing whether there's other approaches...
One more data point: - Firm is at the end of the fund lifetime and in the process of raising a new / bigger one. As a result management fee will drop from 2% to 1% in January which should be off-set by the new fund starting summer 2013
Can you elaborate on this? How many funds is your PE firm currently managing and when is the soft close on the new fund? If there is only one fund and that one is about to be liquidated then you might want to wait until fundraising for the new vehicle has completed. This way firm management will have a better idea of what its budgetary situation will look like. If you ask for a raise now amid the fundraising uncertainty (especially given the prospect of reduced management fee) then they might not be too happy about it or worse, they might feel that they can't afford you.
apologize if this is inferred and i sound like an idiot but by this:
"Won't get promoted to VP until January 2014 and no salary increase between levels"
does that only mean BASE is the same but BONUS can increase?
second, is this common for MM PE that they low-ball you on an offer with the hope that you dont negotiate for higher comp? just curious. goodluck to you!
I think the fact that you are younger than the other associates is the reason you were low balled. I think you go in there is examples like you have listed here and also back it up that you are producing at their level. Just polish up your approach, be diplomatic, and it won't hurt to ask for the higher salary. Interested in hearing how it turns out.
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