The average highly experienced equity portfolio manager based in the U.S. is earning $499,000 in total compensation, new survey figures show.
The average fixed-income portfolio manager with 10 or more years' experience earns $350,000. But equally experienced managers of indexed and other portfolios make far less: a median of $190,000, according to the CFA Institute's latest member compensation survey.
The Virginia-based institute runs the Chartered Financial Analyst program. The survey measured total compensation as 2006 year-end bonus plus base salary as of March 2007. The worldwide report drew on responses from some 13,500 CFA Institute members in 11 countries. The U.S. figures were based on about 9,000 responses, or 19 percent of U.S. institute members. Nearly all U.S. respondents hold a CFA charter or are candidates in the CFA program; 65 percent also hold an M.B.A or other master's degree.
Among U.S.-based professionals with less than 10 years of experience, equity portfolio managers dominated. Their median compensation was $398,000 for five to under 10 years, and $205,000 for under five years. Fixed-income managers at those experience levels earned $210,000 and $126,000, respectively.
Median U.S. compensation at each experience level for some other occupations detailed in the survey were: buy-side equity research analyst, $325,000, $206,000 and $149,000; buy-side fixed-income research analyst, $302,000, $213,000 and $130,000; and sell-side equity research analyst, $350,000, $250,000 and $150,000.
Breakouts By Pay Type, Country, Occupation
Equity portfolio managers reported their compensation comprised 39 percent base salary, 49 percent cash bonus and 12 percent long-term incentives such as stock options, restricted shares and phantom shares. Bonuses made up 30 - 50 percent of total compensation for most buy-side occupations in the survey, and 50 - 60 percent for most sell-side occupations. U.S. respondents enjoyed a median compensation increase in the 10 - 20 percent range for 2006 over 2005.
For portfolio managers based outside the U.S., compensation ranged from $50,000 in China (no breakdown by years of experience or asset class), to $437,000 for fixed-income managers in the U.K. with 10 or more years' experience.
The survey also reported figures for several other occupations, including investment banker and various categories of trader. But although each drew more than 100 responses, CFA designees make up only a small proportion of practitioners in those fields.
No Comparative Numbers For Professionals Without CFA Charter
The institute seems to be backing away from earlier efforts to pin a monetary value on the charter. The current survey did not repeat past years' questions designed to compare CFA holders' compensation with that of market professionals who don't have the charter.
"We decided that asking that question among our members is not the best way" to get comparative information, said Peggy Eisen, managing director of marketing and communications for the CFA Institute. "And this year we couldn't find any external sources (of compensation data) that were apples-to-apples with ours."
The report indicates the average U.S. respondent saw his or her total compensation climb by a percentage in the low teens in 2006 versus 2005. Seventy two percent of respondents said their compensation rose last year, with 30 percent reporting a 20 percent-plus rise and another 24 percent reporting a gain of 10 - 20 percent. Seven percent said their compensation declined last year relative to 2005.