The latest report on hedge fund compensation benchmarks shows these professionals received increases in both base and bonus amounts. The average compensation was up 16 percent in 2013 and totaled $330,000. Bonuses were the primary force for the increases, while base compensation increased only slightly this year.
Base pay increased by 4 percent and bonus checks were 30 percent higher; a reflection of the overall market performance and bonus plans rewarding good performance.
Fund performance is more closely tied to results than in years past. David Kochanek, Publisher of the report says, “This wasn’t always the case but in a post-recession market, pay for performance is now the rule.”
The annual industry report is based on data collected directly from hedge fund managers and employees representing hundreds of firms. An amazing 9 out of 10 respondents reported positive returns for their funds. And 54 percent reported double-digit positive returns for their fund. This year, 18 percent reported returns of 25 percent or higher while a small 3 percent reported negative returns.
In years past, this benchmark revealed that hedge fund professionals were concerned about their compensation because of decreased fund performance. In the most recent report those concerns are not identified. The number reporting their hedge fund was aiming to lower staffing levels was not significant. Twenty five percent of firms are looking to hire research analysts and team members in investor relations, legal and back office operations.
The 2014 Hedge Fund Compensation Report is based on compensation data collected directly from hundreds of portfolio managers and employees during October and November 2013. The Report has grown to become the most comprehensive benchmark for hedge fund compensation practices in the industry.