Salaries for fund management superstars have exploded in recent years with the top tier managers in leading hedge funds or bulge bracket investment banks earning basic salaries of 200,000 to 350,000 (€328,000 to €575,000). Bonuses can double those figures, or more.
But while the bonus culture is spreading across all types of organisation, basic salaries in most mid-sized fund management firms have remained static, as figures from remuneration specialists Monks Partnership show.
The head of fund management in a mid-sized investment bank or asset management house earns 140,000 to 183,000 (€228,000 to €303,000) in basic salary, plus a median bonus of 61%. A head of equity fund management typically commands 93,000 to 133,000, with a median bonus of 83%, up from 20% a year ago.
Marketing directors and dealers have also seen median bonuses rise in the past 12 months, while basic salaries have barely moved. The median salary for a fund management marketing director has stayed at 77,000, but bonuses have risen from 36% to 53% since November 1999. Dealers' median basic has stood still at 37,000 while bonuses have risen from 14% - 33%, according to the Monks' figures.
It is at the very top end of the scale that salaries have really exploded, says Giles Crewdson, head of asset management in the London office of headhunters Korn/Ferry. "There used to be a significant margin between the median and upper quartile of fund managers. Now we're seeing the breakaway of top global organisations, creating a top decile," he says.
Marcella Butler, a principal with headhunter Egon Zehnder in London agrees: "There's a great inequity between the very top level of intellectual rigour those who do their own research, strategists who can articulate their investment policy and the run-of-the-mill fund manager, managing towards an index."
The bonus culture has made wider inroads, however, with bonus potentials as high as 200% no longer a rarity. "That doesn't mean everyone gets 200%. Only the very best will achieve that maximum," says Butler.
With such high bonuses payments frequently vest over a number of years, so as to encourage star performers to stay. "It depends on the style of the house and the fund."