When it became apparent earlier this week that the highest paid director at Pimco Europe earned twice as much as Jamie Dimon for 2011, it raised a few eyebrows (or at least should have done). Suddenly, fund management appears far better remunerated than investment banking.
Pimco’s high earner was not an exception. The company’s latest annual accounts, completed for the year to 31st December 2011, reveal that average compensation per head across the company last year was £665k. At Goldman Sachs International, average compensation (at the last count) was £507k.
So far, so just-about-comparable, except that while Goldman Sachs International is (theoretically) compelled to defer quite a bit of compensation in order to accord with FSA pay regulations, Pimco seemingly isn’t – or doesn’t. Last year, only 5% of its total compensation bill in Europe was in the form of shares.
Maybe Pimco’s just a crazy exception and other fund managers are more modest and make their people wait? Maybe: it certainly pays more than its rivals and its lack of deferrals seems strangely generous.
However, other UK-based fund managers don’t exactly pay badly: average compensation per head at Threadneedle was £324k for the last year it reported (2010); globally, Schroders paid an average of £172k last year – which compares favourably with investment banks; Aberdeen Asset Management paid £144k.
Schroders details some deferral measures in its remuneration report: 50% of senior managers’ bonuses come in the form of shares/’performance awards’, the most punitive of which vest over four years and require that certain hurdles be met.
Even if fund managers do defer a portion of pay, like banks, it’s worth noting that – unlike banks – they appear to be hiring.
Schroders’ first quarter results, unleashed today, reveal a slow but steady increase in headcount. Pimco Europe added 63 people last year, increasing its headcount by 38%.
Hiring is happening, agrees fund management headhunter Chris Manfield: “There are pockets of activity,” he says, “Emerging markets, equity, credit funds. There’s always stuff going on in asset management and there’s always a need for people with good distribution skills.”
Samantha Donald at asset management search firm Shepherd Little, sounds a little less sure: “It’s pretty quiet,” she says. “There is recruitment going on, but not in the volumes we had five years ago – and there’s less happening than this time last year. “