Heidrick & Struggles is pleased to present our 2014 North American Operating Executive Compensation Report.

We were fortunate to be able to draw upon the resources and network of both PE Open and PEI, making this report the most comprehensive compensation report of its type. We received 165 valid surveys. All of the answers are selfreported.

In addition to questions on compensation, we asked respondents to inform us about their backgrounds, the scope of their roles and how they are employed.

With respect to compensation, we looked at the level of cash and non-cash compensation (carry, equity, etc.) according to title, as well as both current fund size and total AUM. We also explored the source of respondents pay (GP, portfolio fees, etc.) and how their compensation has changed over the past year.

Some interesting data points of note:

• The vast majority of operating executives reported no change in cash compensation from 2012 to 2013.
• The majority (60%) of operating partners are employed by the GP but 40% are either self- employed or employed in a 3rd party legal entity.
• Less than half (43%) of operating partners receive their cash compensation exclusively from the GP management fee. The remaining 57% receive their cash compensation by charging portfolio companies or a combination of management fees and portfolio company fees.
• Only 11% of the respondents had a prior working relationship with the GPs. This is a clear indication of the explosive growth in the operating executive role given that in the past, most GPs hired executives from successfully exited portfolio companies.
• Pages 4 and 5 provide a graphic representation of respondents’ average base salary, bonus and carry by both current fund size and total AUM. We have also provided charts on pages 12-15, which illustrate the full range of responses received. It is worth noting that the carry number in the charts that focus on current fund size include only fund carry, not deal by deal carry or any equity participation in individual companies. The carry numbers in the charts that focus on AUM include all fund carry, deal by deal carry and equity participation. As such, we regard the carry figures for the charts that have been sorted by AUM as a more accurate representation of total non-cash compensation.