“Private-equity investment professionals expect their total cash compensation to be 13% higher this year than last year, according to a survey by Odyssey Search Partners, a New York firm that assists asset-managers with employee search and hiring.

Nearly half of survey respondents either have contractually guaranteed bonuses or have already been told what their payout will be, so they have good reason for optimism, said Anthony Keizner, an Odyssey managing partner.

Bonuses in private-equity don’t follow the feast-or-famine dynamic seen in investment banking or hedge funds, where pay falls sharply in down years and inflates in good, he said. Private-equity salaries and bonuses are paid from management fees, generally a steady income source that is locked
in and predictable over several years.

“In some parts of the corporate world, a tough year would immediately translate to lower compensation. It’s different in private equity,” Keizner said

For the long term, however, “there is more uncertainty than people are letting on,” he said, noting there is a cloud over prospective profits from carried interest — private-equity managers’ share of deal proceeds — because of a slowdown in mergers and acquisitions. Keizner said that some employees are trying to negotiate higher guaranteed cash compensation, reflecting the uncertainty of carried interest.

Asset sales are the big question mark for future pay, said Keizner, because the biggest income stream for top private-equity staff flows from carried interest rather than salary and bonus.

For senior firm management, median carried interest can be nearly nine times total salary and bonus, according to the Odyssey survey. Much of the industry’s pay levels depend on whether the assets firms hold can be sold as profitably as in the past, or whether profit projections have become unrealistic.

On the other hand, cash compensation — how people in the industry refer to salary and bonus — has remained remarkably steady through a downturn stretching to a year and a half.

Bonuses are handed out at the end of the calendar year but often communicated in advance. Among private-equity professionals who already know what this year’s bonus will be, the biggest gains have shown up among those in more junior roles, the Odyssey Search Partners survey shows.