Nearly half of hedge fund employees expect no growth (28%) or a decline (19%) in their total compensation in 2016 compared to the prior year, a survey by Hedge Fund Compensation showed.
Among the hundreds of executives from more than 200 companies surveyed in late 2016, 53% expect their 2016 compensation — salary plus bonus — to rise, with 27% anticipating an increase between 16% and 100%; 24% expect an increase of between zero and 15%; and 2% believe their salary and bonus combination will more than double compared to 2015.
Bonuses are usually paid in the first quarter of the new year.
Hedge fund managers from firms expected to return 25% or more in 2016 anticipate receiving a mean bonus of $179,000; 2016 performance of between 1% and 9%, $168,000; up 10% to 24%, $164,000; negative performance, $156,000; and flat performance, $154,000.
"We are beginning to see an increased correlation between fund performance and bonus pay after some years of disconnect. Unlike last year, funds that are up the most are now reporting the highest bonuses. We no longer see funds that are down or breaking even reporting higher bonuses than those operating in the black. It seems rational compensation numbers are returning to the industry," said David Kochanek, publisher of the report, in a news release.
A significant 61% proportion of hedge fund employees are dissatisfied with their compensation package, but 79% of respondents rate their work-personal life balance as excellent (9%), above average (26%) and average 44%. Just 5% of those surveyed said their work-life balance is poor and 16% believed it is below average.
Among the more than 200 hedge fund companies that participated in Hedge Fund Compensation Report's most recent survey were AQR Capital Management, Brevan Howard Asset Management, Cheyne Capital Management (U.K.), Millennium Management and Och-Ziff Capital Management Group.