(December 4, 2013) – CIOs were the highest-paid employees at hedge funds this year, according to a survey by Infovest21, but on average took home less than in 2012.
As with CIOs, the typical CEO’s compensation dropped compared with last year, although it still amounted to a comfortable $2.28 million. Portfolio managers came in just behind CEOs as the third-best paid employee,s with average earnings of $2.27 million.
Chief risk officers and COOs saw their incomes rise since last year, earning an average $1.7 million and $977,000, respectively.
Bonuses comprised the majority of total compensation for all of these executive positions. CIOs reported an average $433,000 base salary, augmented by a $2 million bonus.
This add-on pay was determined subjectively for two-thirds of respondents. For those calculated according to a formula, individual performance was weighted more heavily than that of the fund as a whole.
In addition to the survey, Infovest21 interviewed a number of hedge fund recruiters on their view of pay trends and the industry job market.
In determining pay grades, the report stated: “The main factor—more so than in prior years—appears to be performance of the hedge fund firm. Those firms that have performed well are compensating their employees well, while those who are in negative territory are not compensating well.”
The compensation figures are derived from hedge funds with at least $1 billion under management, and respondents tended to work at large, well-established firms.
The average fund represented had $5.7 billion in assets, a 15-year track record, and returns of 12.8% for the year through to October. The BarclayHedge index of roughly 6,200 funds gained 8.8% net of fees during the same period, suggesting an element of selection bias in Infovest21’s data.
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