Hedge managers get top dollar, says survey

Date: Monday, November 27, 2006
Author: Polya Lesova, InvestmentNews.com

Hedge fund chief executives earned $4.5 million on average, according to an executive compensation survey of hedge funds.

Infovest21 LLC, based in New York, conducted the survey during October and November and included data from more than 50 separate hedge fund management firms.

In terms of total compensation for hedge fund executives, portfolio managers made an average $2.5 million with chief investment officers coming in third, making over $1 million on average.

Directors of sales and marketing, chief operating officers and chief administrative officers averaged between $800,000 and $999,999 in total compensation, Infovest21 said.

Directors of research, chief financial officers, and heads of trading averaged between $600,000 and $799,999 total compensation.

General counsels and chief risk officers rounded out the bottom of the positions surveyed, with average total compensations in the $400,000 to $599,999 range.

"The general trend showed that the larger the hedge fund firm was in terms of assets under management, the higher the compensation," said Lois Peltz, president of Infovest21, in a statement.

"For example, in the $5 billion+ hedge fund manager universe, the CEO and the portfolio manager had total compensation of $5.9 million and $3.0 million respectively."

In all cases, the average bonus outweighed the average base salary. The bonus/base multiple ranged from 1.9 times for the chief risk officer to 9.5 times for the portfolio manager.