Base salaries for money management professionals are projected to increase 3.5% in 2012 with incentive pay projected to rise up to 10%, according to a new study from Greenwich Associates and Johnson Associates.
The “relatively soft” salary increase can be attributed to two main factors, according to the study — salaries in the money management industry are already competitive and industry bonuses have “largely avoided the eye of regulators and the investing public,” meaning firms have had little pressure to increase salaries and harness bonuses.
Hedge fund professionals are projected to earn about 1.8 times that of people at traditional money management firms in both buy-side equity and fixed income, in line with the previous year, and are projected to remain fairly stable in the short and medium term.
However, traditional fixed-income professionals are making headway; in 2010, hedge fund professionals were making about 2.4 times that of traditional firms in the fixed-income asset class. Equity hedge fund professionals are projected to make about 1.85 times that of traditional buy-side equity professionals in 2012, nearly identical to 2011 numbers; traditional equity professionals actually made about 1.05 times more than hedge funds in 2010.