Private equity (PE) firms award carry at the fund level or on a deal-by-deal basis; while the deal-by-deal structure is more flexible, it is also more difficult to properly implement. Recent changes to the taxation of carried interest may further affect how PE firms award carry. In addition, private funds are increasingly deferring compensation to incentivize employees to stay, although significant issues persist over how employment contracts define “cause” and “good reason.” See “Ways Fund Managers Can Compensate and Incentivize Partners and Top Performers” (Dec. 14, 2017). A recent program hosted by Brian T. Davis and Dimitri G. Mastrocola, partners at international recruiting firm Major, Lindsey & Africa (MLA), and featuring McDermott Will & Emery partners Ian M. Schwartz, Evan A. Belosa and Alejandro Ruiz, discussed these and similar issues. This article, the first in a two-part series, discusses carried interest, taxation thereof and deferred compensation arrangements. The second article will explore hedge fund compensation, including profit shares, and restrictive employment covenants. For insight from another McDermott Will & Emery partner, see “Lessons for Hedge Fund Managers From the Government’s Failed Prosecution of Alleged Insider Trading Under Wire and Securities Fraud Laws” (Jul. 21, 2016). For coverage of prior programs hosted by MLA, see “Client Consent and Other Issues Requiring Careful Consideration by Fund Managers Involved in M&A Transactions” (May 18, 2017); and “Former Prosecutors Address Trends in Cybersecurity for Alternative Asset Managers, Diligence When Acquiring a Company and Breach Response Considerations” (Oct. 6, 2016).