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Additional Posts in Partner One
But what if you *are* Partner 1?
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Having another shareholder to deal with rarely results in a favorable outcome except for those closing in on retirement, who have the most to gain by monetizing their equity stake
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Recently moved to PE backed firm. Annual cash about the same, but equity upside not as high.
My old firm had 100% of the equity owned by partners and employees with a mechanism for market valuation exits when you leave.
New firm the PE firm has 80% of the equity, so the partners are sharing a much smaller piece of the equity pie.
Sure you get leverage impact and ability to finance acquisitions for fast growth, but when the pie is that much smaller, you aren’t on going to make it up.
Plus the MIP model hockey sticks, so you really have to kill it in growth to make serious money.
It hasn’t?
You think PE is just going to hand out free cash without getting a return? Who do you think the return impacts
BDO is the only one that really had a structure change, so they let partners in at a much lower cash comp and put it all on a W-2.
BDO was not purchased by PE. It’s an ESOP.
They aren’t getting the money out by share price alone. That’s not what PE does. They are getting it with insane interest rates on the debt and a board seat. And also some share price appreciation. This business is one of the only ones left that has reliable share value increases each year that are not realized by the equity holders. ESOP or PE changes that.
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Less cash, but banking on options when we hit the milestone.
My cash bonus has gone down. Base is higher. Equity is higher as well
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