Welcome to the July Edition of the Thelander CVC Digest. In this edition, we delve into the complexities of compensation across different regions, shedding light on how geographic disparities influence total cash compensation and incentive structures for CVC Unit Leaders and Senior Investment Professionals. By examining these variances, we aim to provide CVCs with the insights needed to tailor their compensation strategies effectively.
Chart 1 shows the total cash for CVC Unit Leaders by region. We see the following:
Northern CA and Mid Atlantic: Stand out with the highest total cash compensations for CVC Unit Leaders, significantly above other regions.
Europe: Shows competitive total cash compensation, aligning closely with other US regions, yet remains distinct in its incentive strategies (more on this later).
Chart 2 shows the total cash for CVC Senior Investment Profesiionals I by region. We see the following:
Less Regional Disparity: Compared to Unit Leaders, Senior Investment Professionals I experience less variation in compensation across regions.
Europe and Midwest: Generally see lower compensation than other regions.
Chart 3 explores long term compensation incentives in addition to base and bonus pay by region. We see the following:
Corporate Stock vs. Carry: There is significant variation in how regions prioritize corporate stock and carry:
- Corporate stock remains the preference for most regions.
- Northern CA and Midwest: Prefer forms of carry, reflecting a focus on long-term value creation and alignment with company success.
- Europe: Displays the most diversity, with approximately 60% favoring corporate stock exclusively and 40% opting for carry or a mix of incentives. The investment firm market in Europe has become increasingly competitive, making both short term and long term incentives even more critical in attracting talent and maintaining loyalty. And because these investment professionals follow opportunity, European CVCs are not only competing with traditional venture capital firms, they are battling on a global level as well.
No matter what the goal for the CVC Unit is, alignment within the parent company is key to making the best compensation decisions, and Thelander has the real-time data and nearly thirty years of expertise to help you get it right.
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