Money management incentive compensation is expected to increase up to 10% at some fixed-income firms this year, and up to 5% at some equity, hedge fund and private equity firms, according to a report by compensation consulting boutique Johnson Associates.
Alan Johnson, managing director, said in a telephone interview that compensation increase projections are “down considerably” from three to six months ago when projections ranged from 10% to 15%.
The report notes that asset management and alternatives businesses are generally stable, but expectations are dependent on market conditions. Mr. Johnson said the report's results are contingent on turbulent market conditions not triggering another market meltdown like in 2008.
The report said trends that would decrease incentives were lack of economic recovery, the varying impact of global and regional regulations and ongoing uncertainty in world markets.
Mr. Johnson said the report is based on the firm's research, which includes data from 30 to 40 asset management firms, public records and client data.