Hours per Week and Annual Pay – Who is on Top?

Individuals in the private equity industry work a lot.  They also make a lot for those long hours.

If one divided working individuals into 10 hour groups – meaning some percentage of individuals work 40 to 49 hours per week and some individuals work say 80 to 89 hours per week – which hour group would you guess is the most common?  Which group would you guess is the least common?

Here’s what the data look like.

In terms of percentage of total, individuals working 50 to 59 hours per week represent the largest group at 37% of the total.  Following this group are individuals working 60 to 69 hours per week at 35%.

The remaining 28% of individuals are grouped as follows:

• Individuals working 70 to 79 hours per week at 11%;
• Individuals working 40 to 49 hours per week at 8%;
• Individuals working 80 to 89 hours per week at 6%;
• Individuals working 90+ hours per week at 2%; and
• Individuals working less than 40 hours per week 1%.

Source: www.jobsearchdigest.com

 

How do these working hours worked connect with annual compensation?  Would you guess private equity professionals working the most – i.e. 90+ hours per week – make the most?  Would you guess individuals working less than 40 hours per week – i.e. individuals running the show – make the least?

Here’s what the data look like.

Interestingly, on top of the annual compensation pyramid is individuals working 70 to 79 hours per week at $308,000 per year.  Following them are individuals working 60 to 69 hours per week, bringing in $291,000 annually.

The remainder of the survey results are as follows:

• Individuals working 40 to 49 hours per week at $285,000 annually;
• Individuals working 80 to 89 hours per week at $251,000 annually;
• Individuals working 90+ hours per week at $239,000 annually;
• Individuals working 50 to 59 hours per week at $233,000 annually; and
• Individuals working less than 40 hours per week at $183,000 annually.

Source: www.jobsearchdigest.com

So, the sweet spot for being on top is 70 to 79 hours per week, with the next highest at 60 to 69 hours per week.

What does this mean?  A few observations.

First, by and large, the reward for being a successful private equity professional is not devoting less of one’s life to one’s working life, but rather, more.  The most highly compensated private equity professionals spend 14 or 15 hours per day evaluating or managing deals, whereas those spending perhaps 8 or so hours for only five days per week receive lower compensation.

Second, to be successful in the private equity universe, one likely will be devoting at least 50 hours every week to one’s working life.

Overall, private equity professionals working 70 to 79 hours per week generally make the most per year at an average of $308,000 per year, essentially spending most of their waking lives looking for or managing private equity investments.