Dive Brief:

• General counsel at private equity firms with more than $10 billion in assets under management receive an average of $1.19 million in cash compensation annually, according to a compensation survey.
• Roughly 90% of GCs at the largest PE firms are also eligible for carried interest and their average expected carry value is $9 million, a report from legal and compliance executive search firm BarkerGilmore found.
• Meanwhile, general counsel at portfolio companies can make anywhere from just north of $450,000 to nearly $1.5 million in annual total compensation depending on the company’s revenue profile.

Dive Insight:

The pay for general counsel in the private equity space is a reflection of the industry’s expansion, as well as the extra responsibilities more than eight in 10 legal chiefs in the sector shoulder.

For example, the BarkerGilmore report found that 85% of private equity GCs also serve as chief compliance officers and 44% serve as corporate secretaries.

“As the private equity space continues to grow, we are seeing consistent demand for lawyers and compliance officers at both the firm and portfolio company level,” said John Gilmore, BarkerGilmore’s founding partner, in a press release. “This is generating a noticeable impact on compensation and responsibilities for these professionals.”

While GCs at private equity firms surpassing $10 billion in assets under management see the highest average compensation, other legal chiefs receive significant pay as well.

General counsel at PE firms with $1 billion to $9 billion in assets under management receive an average of $625,000 in annual cash compensation.

More than eight in 10 (81%) of those legal chiefs are eligible for carried interest compared to 20% of GCs at firms with less than $1 billion in assets under management.

“Once a private equity firm’s AUM exceeds $1 billion, general counsel compensation and carry eligibility increase significantly,” the BarkerGilmore report said. 

As for the chief compliance officers at firms exceeding $10 billion in assets under management, they earn an average annual compensation of $538,000. Roughly 40% of those compliance chiefs qualify for carried interest with an average expected carry value of $3 million.

CCOs at PE firms with $1 billion to $9 billion in assets under management make $418,000 in median cash compensation, while compliance chiefs at firms with less than $1 billion in assets under management make $332,500 on average.

Portfolio company compensation

Much like at private equity firms, GCs at the largest portfolio companies typically earn higher compensation than peers at smaller companies.

For example, general counsel at portfolio companies with more $5 billion in revenue receive $1.46 million in total compensation on average. This figure includes an average of $357,000 in base pay, $195,000 in bonus pay and $912,500 in long-term incentive pay. 

GCs at portfolio companies with $500 million to $1 billion in revenue receive median total compensation of $520,000. The largest portion of that figure is $285,000 in base pay, while long-term incentive pay averages $125,000.

As for additional responsibilities, roughly 72% of portfolio company legal chiefs serve as corporate secretaries and 53% serve as chief compliance officers.

BarkerGilmore conducted an online survey in March 2023 to assess private equity and portfolio company counsel compensation trends in 2022.

More than 400 professionals from portfolio companies and private equity firms answered a combination of multiple-choice and open-ended questions.