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Compensation is the heart of the survey and represents a good starting point. The data shows a fairly normal distribution curve and a healthy average compensation (including salary and bonus) of $250,000. This level of compensation is to be expected as 63% have more than 5 years of Hedge fund experience.
Typical for the financial industry, production based bonuses are an integral part of compensation. Hedge fund industry bonuses can range from 38% of base salary for average compensation ($250,000) to over 400% for the top producers ($1,000,000 plus). Keep in mind that there is no “standard” compensation plan in this industry and bonus percentages vary significantly depending on responsibilities and experience. One thing is clear, the higher the compensation, the greater role bonus plays in total earnings.
As responsibility increases, the rewards get sweeter. Portfolio Managers make 78% more cash compensation than analysts on average – the majority of that coming from bonus awards.
Longevity with the firm plays an important part of an equity award and most respondents have less than four years with the firm. 20% of respondents said they have received equity shares in the firm. Awarding equity in the company also seems to depend partly on job title. Nearly half of the COO and CFO players have equity, while less than a third of the Portfolio Managers share in that upside. While a vesting period for the equity is not standard practice, many respondents commented on their equity coming to them over time.
back to 2007 Compensation Report
