Hedge Fund Bonuses 2011
Hedge Fund Bonuses Expected to Rise, Bank Bonuses Decline
As many banks are deciding to cut back bonuses paid to employees, hedge funds are going the opposite route. According to a recent survey of financial professionals, expectations are still high overall for bonuses paid to financial professionals but most of that optimism comes from hedge fund employees and those working for boutique banks and professional services firms.
As Wall Street works its way toward the end of a turbulent 2011, the bonus expectations of U.S.-based financial markets professionals remain relatively high, driven by steep expectations of stronger bonuses by hedge fund, boutique bank and professional services firm employees.
Overall, more than six in 10 (62%) of the Wall Street employees surveyed by eFinancialCareers.com expect their bonus this year will be higher or the same in comparison to the bonus they earned in 2010. This current level of expectation represents a down tick from a year ago, when 71 percent of survey respondents believed their annual bonus would increase or remain level. In part, the falloff is due to lower expectations from large bank employees. For those respondents working in commercial or bulge-bracket banks, 38 percent expect bonus payouts to decrease this year, as compared to 36 percent who are anticipating higher payouts.
Personal performance (45%) and firm performance (22%) hold sway as the primary reasons driving anticipated year-end bonus increases. Among the 30 percent of respondents who report expecting decreased bonuses at year's end (a figure up sharply from last year's 20 percent who expected smaller bonuses) firm performance (40%) and market conditions (35%) stand out as the most-cited primary causes.
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