The average cash compensation was up again in 2013 and came in at $330,000. Base salary played a small role in the increase this year, as bonuses drove the double-digit gains.
Average cash compensation was up 16 percent over last year. Base compensation increased only 4 percent; however, bonuses were 30 percent higher due to performance-based bonus structures.
“As we reported last year, fund performance results in significant bonuses, especially for those closely involved in the investment decisions,” said David Kochanek, Publisher of HedgeFundCompensationReport.com. “This wasn’t always the case but in a post-recession market, pay for performance is now the rule.”
9 out of 10 respondents reported positive returns for their funds in 2013. Two years ago, only 16 percent reported double-digit positive returns for their fund, that number is now 54 percent. Additionally, this year, 18 percent reported returns of 25 percent or more with only 3 percent reporting losses.
“For those in decision making roles, this level of performance results in tremendous increases in compensation,” says Kochanek. “Thirty-one percent of hedge fund employees expected 15 percent to 100 percent more money while 5 percent expected to see their compensation more than double.”
The report is based on data collected from hedge fund managers and employees representing hundreds of firms.
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