The Rich Get Richer


It’s no secret that record amounts of capital have poured into private-equity firms over the past five years. What’s less widely known is that as they’ve grown ever larger, the megafunds have significantly widened the pay gap between themselves and midmarket firms.

A Glocap-Thomson Financial study, the 2008 Private Equity Compensation Report, shows that while smaller firms receive less in management fees than the larger firms, their staffs aren’t necessarily proportionately smaller. So per person, there’s less money to go around.

The result?

According to Glocap, an associate at a megafirm earned $290,000 in 2008, up 22% from 2006. However, in the midsize range, the average associate made $207,000 in 2008, up 8% from 2006. In the two smallest segments, newly minted associates earned $172,000 and $157,000, respectively, each representing a 4% increase from 2006.

Source: Top trends in middle-market private equity, Grant Thornton LLP, www.grantthornton.com.

SPONSORED REPORT

2019 State of Financial Reporting Survey

We surveyed nearly 600 finance and accounting professionals on their month-end close and reporting processes. See the results.

VIDEO

What RPA is and how it works

Robotic process automation is like an Excel macro that can work on multiple applications, says Danielle Supkis Cheek, CPA. RPA can complete routine, repetitive tasks such as data entry, freeing up employee time from lower-level chores.