Base Salary Progression
Forgive me if there’s a thread on this topic already -- but I’m new to the finance + HF space and was wondering what base salary progression looks like, especially in early years. Can one expect an annual boost to base salary? Is there a standard/common practice? I assumed at least a mediocre 3-5% in line with more conventional 9-5s but had my performance review early this month and my boss made no mention of it. Do base salaries typically stay flat for a few years (with a fluctuating bonus) before ramping up when you start contributing directly to the P&L?
At most HFs it’s the opposite of what you are saying. Base salaries increase a bit for junior employees and then stay flat once you become senior. All of the volatility comes from pnl.
I see. Interesting, thank you. So you're saying it's generally uncommon for base salaries to stay flat? For senior people, bases eventually flatten permanently? I expected at least some incremental growth.
Yes with the caveat that all funds are different (and your role matters). There are funds that keep juniors constant too. This is similar to many industries (although happens quicker at a HF and with bigger numbers), the more senior you become the more your pay should be aligned with the outcomes of the firm (profits). It is fairly simple, at that point you have more control over the outcomes (very true if you are a PM), and the only way a firm can afford big paydays is with big returns. If you guarantee big numbers without the profits you’re dead.
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