P.E. Compensation Surges

Private equity professionals are having a good year: According to the latest Dow Jones Private Equity Analyst-Holt Compensation Study, the average P.E. professional made $816,000 in total compensation, a 45 percent increase from the figures reported in 2005.

Average base pay grew 13 percent, to $305,000. Bonuses added another $200,000, and shares in profit from deals did the rest.

"In terms of compensation, it is a great time to be a private equity professional, particularly when carried interest is added into the equation," remarked PEA Managing Editor Jennifer Rossa. She said firm size is playing a larger role in determining compensation, with bigger firms paying more and offering higher raises. "This creates a personal incentive for firms to raise increasingly larger funds and to raise as many as they can."

Not surprisingly, the compensation for the most senior-level executives - such as managing general partners, senior partners and partners - averaged even more. Their base salaries increased an average 13.6 percent, to $551,000. Bonuses and carried interest brought their totals to $1.63 million, a 49.9 percent increase from 2005.