Money management firms surveyed by Sextant Search Partners and the Investment Advisor Association are considering new ways of measuring portfolio managers' performance and setting compensation packages.
The 68 U.S. firms that participated in the survey are emphasizing profitability and ensuring that pay packages are in line with overall financial performance, said Paige Scott, a partner at Sextant. "More firms are structuring compensation to be more evenly shouldered between the individual and the company," Ms. Scott said. Firms are using factors such as peer, company and individual performance when gauging pay, she added.
Most of the firms surveyed had $1 billion or less in assets under management. About 40% of firms surveyed said they do not document their compensation practices. The average total compensation of portfolio managers with 10 years of experience was $250,000 annually.