Current MM PM Packages
Getting bombarded by recruiters claiming the PM market is insanely hot. Wondering what people have been seeing for MM PM packages to poach from fellow MMs. Obviously there are BBG articles claiming 8 figure guarantees, but I figured those are for very senior PMs with 10+ year tracks. As someone who is still pretty early into a career, probably not very applicable.
For reference, last time I popped my head out I received offers around ~800k total guaranteed first year, 15-17% payouts, 10m drawdown from platforms. However the guaranteed bonus was a draw on future PnL - have been hearing that now platforms just give you cash instead of structuring it as a draw. Ended up deciding to stay at my current shop.
Following. $800k guarantee seems low for a PM to move right? Esp since that is IBD VP comp these days
How is this even remotely related? Why does the comp of a VP in IB matter for what Citadel is paying someone to run a fundamental l/s book?
Was gonna say the same thing but I’m sure the thought process is: HF > IB (usual buyside > sellside argument) so if an IB VP is getting 800k, surely to be competitive they need to pay >800k. IB pay is insane now. HF’s are not following because it’s totally irrelevant. Wrong comp set. Doesn’t affect them until you get talent retained in banking and not moving over but don’t think that’s happening yet.
Hearing up to $1m first year guaranteed at places for people roughly 4-6 years buy side experience. Non PM seat, running sleeve.
Doesn't seem like this is worth anything.
In reality depends on your previous pnl and consistency but I have never really heard more than low single digits and they can still fire you, so nothing is actually guaranteed.
I agree that nothing is ever “100% guaranteed” but there are definitely clauses on keeping your bonus/guarantee if fired (without cause, as criminal behavior etc will disqualify you from your bonus). I know of several contracts where there is a minimum bonus and where you collect that bonus if fired (even for those paid out over years).
What does running sleeve mean?
Whoever thew monkey shit is soft as a teddy bear, just trying to learn
It means you get a piece of the overall book to manage more directly. Exactly how much independence and discretion you have obviously depends on you and the pm but generally more direct ownership than just idea generation. Typically you'll get a fixed % of pnl generated by your sleeve (possibly higher % if achieve higher returns/sharpe/IR/alpha/etc)
So they give you risk limits and your var is above one day and they can get out of it because you violated the 'contract'? Sounds like a plan to me.
Nope, that’s not for cause and wouldn’t hold. Not how it works, for cause are things like felony, punching your co-worker, etc.
They can fire you but the 1st yr guaranteed comp is there even if you underperform.
Ok fine, you can get your first year of guarantee - but I just don't think that is worth anything unless you suck.
I’m so confused. It’s literally worth $1m which is material for anyone 6-8yrs experience. It softens the downside. I think it’s dumb to make decisions on the basis you think you’re gonna kill it with LSD millions comp for the next 2-5yrs anyway.
The people I know getting these guarantees almost never need them - they are guys with track records and a pretty safe bet with more upside.
Are you saying that a new sub-PM with 1-2mm max upside is getting their first year at 1mm guaranteed? I agree that is a better deal, but I'm not aware of that happening and have pretty good info.
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I know SM senior analysts with no tangible track get offered 1mm+ gtd and can tell you it is a big deal
Not sure what you are seeing, but as with everything in this industry, it needs to make financial sense. Firms are using these to poach talent, you don’t do this by giving a weak guarantee, you do it by: 1) giving a better upside opportunity (if not why would a good person leave?) and 2) guarantee a good amount so that they are protected from the downside (or getting fired, etc). Anyone getting one of these is going to be comparing it to their current comp, opportunity, and “brand equity” they’ve built up at a firm. The guarantee is meant to help with the last point (and of course reduce overall risk/variability for a year or a few); if someone has a good track record at their current firm they know they have more room to mess up and people that will back them (and probably a clear path to the “next level”). So the guarantee (along with rest of the comp) has to make sense. It isn’t like firms just give the guarantee but everything else is lower, PM’s aren’t stupid.
So, does it matter? Well, yes, just because you have a good track record that doesn’t mean you’ll perform next year, if someone offered you your average bonus as a guarantee + better upside, why wouldn’t you take it?
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