2024 North American Private Equity Operating Professional Compensation Survey

Welcome to our 2024 North American Private Equity Operating Professional Compensation Survey. Together with our survey of private equity investment professionals, this report provides a comprehensive picture of the compensation that North American private equity (PE) executives are currently receiving. 

For this report, Heidrick & Struggles compiled compensation and organization data from a survey of 251 private equity operating professionals in the United States. 

We hope you enjoy reading the survey. As always, suggestions are welcome, so please feel free to contact us—or your Heidrick & Struggles representative—with questions and comments. 

Executive summary

This year’s survey includes a review of 2023 and early 2024 activity in North American private equity, our thoughts on the major hiring trends for operating professionals, and a deep dive into current compensation packages for operating professionals.

Expertise trends (page 8)

• Twenty percent of the respondents considered themselves to be industry generalists; the most common specialist categories were technology/software (19%) and industrial (16%).
• Generalists were most common in the breakdown of functional expertise as well, at 23%, followed by focus areas in sales (15%), marketing (14%), and finance (14%).
• Twenty-seven percent of respondents had been management consultants in their immediate prior role, and only 17% had been a CEO—a significant drop from the 26% who reported they had been a CEO in our 2022 survey.¹  
• Twenty-one percent had been PE operating executives, a significant increase from the 2022 respondents’ 7%.² 
• Only 12% had been previously employed by a portfolio company of their current GP or investment advisor—a drop from 27% in 2022.³ 

Cash compensation trends (page 12) 

• Between 2022 and 2023, base salary increased modestly, with nearly 60% of respondents who reported an increase seeing $50,000 or less. A notable 7.8% of respondents said that their bonus decreased between 2022 and 2023. 
• Between 2023 and 2024, respondents more often saw no change in their compensation; of those that did report an increase (45%), the majority, 79%, saw an increase of $50,000 or less.

Non-cash compensation trends (page 32) 

• The vast majority of respondents eligible for carried interest see it vest on a straight-line schedule.
• Solid majorities of respondents at all professional levels reported that they have co-investment rights. Whether co-investment rights are based on the performance of funds or individual deals varies by seniority, with the highest fund-based participation reported by firm leaders (73%). 

The growing importance of the PE operating professional

2023 was the worst year for combined PE deal activity in the United States since 2016.⁴ According to PitchBook, “Selling activity fell to its lowest point in over a decade, [and] PE capital deployed in the United States declined by a sobering 29.5% on the year while value derived from US exits fell by 26.4%. … A snapback in exit activity is what’s needed to spark a broad-based recovery in PE dealmaking, which is now entering its third year of decline.”⁵

As private equity has become a more significant part of the economy, and particularly as exit activity has dropped off, demand for operating executives in North America continues to increase as more and more firms are seeking to drive value creation over longer time periods. Firms’ methods for deploying these executives, however, vary widely and are evolving the roles, responsibilities, and compensation for the operating professionals.

Our survey found that 21% of respondents had been PE operating executives prior to their current role, a significant increase from only 7% of respondents in 2022. 

Firms are, however, increasing their flexibility about the backgrounds of their operating executives. As noted previously, our survey found that only 12% had been previously employed by a portfolio company of their current GP or investment advisor—a drop from 27% in 2022—and only 17% had been a CEO, a significant drop from the 26% in 2022. And, as operating teams are being formed or strengthened, we are seeing more of an interest in functional specialties: finance, particularly, as well as human capital, technology, and go-to-market professionals. 

What’s most important is that we have seen many different models of success. We have found that the most crucial element determining success of the team is buy-in from the investment professionals.

Looking ahead, based on our ongoing discussions with leaders in the sector, we expect to see demand for operators continue to grow and as well as increasing professionalization for the PE industry as a whole.

About the authors

Jonathan Goldstein (jgoldstein@heidrick.com) is the regional managing partner of Heidrick & Struggles’ Private Equity Practice for the Americas; he is based in the New York office.

John Rubinetti (jrubinetti@heidrick.com) is a partner in the New York office and a member of the Private Equity Practice.

Acknowledgments

The authors wish to thank Mohd Arsalan for his contributions to this report.

References

¹ 2022 North American Private Equity Operating Professional Compensation Survey, Heidrick & Struggles, p. 5.

² 2022 North American Private Equity Operating Professional Compensation Survey, Heidrick & Struggles, p. 5.

³ 2022 North American Private Equity Operating Professional Compensation Survey, Heidrick & Struggles, p. 5.

⁴ PitchBook, 2023 Annual US PE Breakdown, January 2024, p. 4.

⁵ PitchBook, 2023 Annual US PE Breakdown, January 2024, p. 4.