Salary survey: Fund management pay turns down

Bonuses in fund management have fallen over the past year as the depressed market and declines in funds under management have taken their toll, a survey shows.

The survey of small- to medium-sized houses in London by the remuneration consultancy Monks Partnership shows pay levels were down across the board. Though a few positions registered gains in salary, these were mostly offset by drops in bonuses.

Heads of fund management were one of the few positions to record an increase in median base salary, which rose from 148,000 ($235,000) last year to 154,000 this year. However they also recorded the sharpest drop in bonuses, from 46% of median base pay last year to 29% this year.

Assistant directors in fixed income recorded a slight dip in base pay to 75,000 from 77,000 last year, said the survey, compiled in August. Bonuses fell slightly as well, dropping to 30% from 34%.

Assistant directors of equities witnessed a similar drop in base pay, to 76,000 from 78,000. But their bonuses dropped more sharply than those of their fixed income counterparts, falling to 20% from 28% last year.

The figures are backed up by the views of recruitment consultants at Sheppard Little Asset Management who said bonuses are less than last year across the board, particularly in the equity markets, as a consequence of a reduction of assets under management.

The firm says it is likely the next round of bonuses will be given tactically to key staff.

Fund managers in both equities and fixed income recorded some of the few increases in base pay.

Fixed income managers registered a salary move upward from 38,000 to 40,000. Bonuses remained steady at 21%, while those of equity fund managers fell to 14% from 17%. Base pay for equity managers moved up to 46,000 from 43,000.

The drop in bonuses could be explained by a variety of factors according to Barnaby Parker, sales director at recruitment consultants Project Partners.

Parker said firms had developed alternatives to costly guaranteed bonus schemes through the increased use of share options, flexitime and holiday allotments.

The difficult market conditions have increased the importance of marketing and sales professionals for fund managers, according to some recruiters, who say this is one of the few areas that has the green light to expand in an otherwise flat hiring market.

Median base pay fell slightly for marketing directors from 79,000 to 75,000, but bonuses held just about steady at 28%.

Jeremy Russell at recruitment consultants Centre Point Group said: "Firms have scaled back hiring plans over the last year. The exceptions to this would be marketing where we have seen rises as companies react to poor performance with increased activity in gaining new business."

The flat hiring market has benefited those fund management firms that are recruiting to fill in gaps in coverage or upgrade key positions. Those firms are not being forced to pay the premiums that were the norm until 18 months ago.

Sheppard Little Asset Management said any salary increases now tended to be no more than 3%-5% for candidates who are currently in employment when moving houses.

The recruitment house added that unemployed candidates in the market are typically either accepting the same salary as in their last job or slightly less.