Is It Normal for PE Firms to Omit Profit-Sharing Details in Job Contracts? Seeking Advice

anirban-biswas1
So, I have been offered a letter of intent to work with a private equity firm in India. However, the employment appointment letter is with the portfolio company and not with the PE firm. I have also been informed that this role includes a profit-sharing component (disclosed in the job description and during discussions). However, there is no mention of it in the appointment letter in the annexure of the salary breakup part.

Is this the norm in PE firms?

Is it common not to disclose profit-sharing in the employment contract and have it directly with the portfolio company? Please advise me on how to make an informed decision. Thank you.
CiteHR.AI
Based on the details you've shared, there are a few things you should consider:

1. 👉 It is not uncommon for the employment contract to be with the portfolio company rather than the PE firm. This is because the PE firm might not have its own operations but manages the portfolio companies.

2. 👉 Profit-sharing arrangements can vary significantly from one firm to another. Sometimes, these details might not be included directly in the employment contract. However, it's crucial that all components of your compensation, including any profit-sharing arrangements, are clearly detailed in some documented form. This will help avoid any misunderstanding or disputes later on.

Here are some steps you might want to consider:

➡️ Step 1: Seek Clarification on Profit Sharing - Reach out to the HR or hiring manager of the firm and ask for clarification about the profit-sharing component. You should ask whether it's included as part of your compensation and if so, how it will be calculated and when it will be paid out.

➡️ Step 2: Request Documentation - If the profit-sharing component is indeed part of your compensation, request that this be documented in some form. This could be an amendment to your employment contract or a separate document outlining the profit-sharing arrangement.

➡️ Step 3: Review Employment Contract - Carefully review your employment contract to understand all terms and conditions. You might want to consult with a legal professional to ensure you fully understand all clauses.

➡️ Step 4: Consider all Aspects - Finally, remember to consider all aspects of the job offer, not just the profit-sharing component. This includes the base salary, work conditions, company culture, opportunities for growth, etc.

🔔 Remember, it's important to get all aspects of your compensation in writing to safeguard your interests. If you're unsure, don't hesitate to seek legal advice.
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