Is it true that HF base salary stagnates through all the "analyst" years?
I've heard unverified info from someone at a top MM HF based in London. His comment was in the context of exit opps. Particularly has was saying he regretted leaving the sell-side because his life is miserable, and his base comp is stagnating, which sucks at times of recessions and market downturns as their performance is in the toilet. He said that over a 6 years period he still gets 125k base and bonus is dependent on team performance.
Is this true?
Also if he spent 6 years and still is an analyst, what does it take - on average - for a good analyst to become a PM?
Depends on the fund really, HF is really less standardized. But also, no one is at a HF for the base
Yeah the more senior you get the more of your comp comes from year end bonus. Sorry to hear your friend is miserable, definitely part of the downside of a performance-driven business. If you or your team isn't performing, you're not gonna get paid.
Who TF cares about base salary. If your friend is bitching over $125k vs $250k base he is literally ngmi. Focus on the shit that matters aka whether you make PNL and get 7 digits or if you suck and make nothing
That’s like complaining because the kitchen pantry snacks are not great
rx
careful using that abbreviation brother
he edited his comment
Fair. But he is bitching about not getting paid because the markets are in shambles, which sucks but it's part of the game.
My bonus is literally 200% of my base.
A PM at my fund told me his base has not changed even $1 since he started working here almost 15 years ago, and is now a small percentage of his overall pay.
Vast majority of pay comes from various components (board seats, bonuses, etc.)
i thought the vast majority of pay for pms come from equity stakes they have? atleast thats how it works at my fund.
Assuming the equity goes up..
200% in your first year? Wow
Is it something exceptional due to market conditions?
Nope not related to market conditions. It's just an eat what you kill sort of a culture.
I would say while my base is six figures, it's definitely lower than other hedge funds. but with bonus combined (50% cash, 50% equity) I am making substantially more than people with roles like mine at other HFs.
As others have said, at MMs (and even some SMs) the base salary is pretty standard and with a low ceiling. It corresponds to fund economics, the fund really only turns a big profit if the fund performs, and that is how people are paid. As you become more senior, you get larger cuts of the PnL.
At SMs it is different and varies a lot by firm. There are some that have relatively high base salaries (especially for non risk taking jobs); some of these funds (the really large ones) are large organizations that require a lot of finance, risk, ops, tech, etc to operate and you can’t just pay these people on PnL.
Everybody else has already answered this, but just to put a concrete number on it...
My base salary has not changed in almost a decade. But during that time, my total comp has nearly tripled.
That is very, very standard once you reach mid-career. Some funds have a formal firm-wide cap on base salary. At my last company (a 30 billion dollar multi-manager), literally everyone, even the CEO, had a salary cap of $250,000. Obviously the CEO's total comp was significantly more, though.
What was your comp progression like? Would appreciate some benchmark figures
It's so performance-based and contract-based that it's not even with asking.
How do these guys support their lifestyles mortgage and families month to month? Just pay with last years bonus from savings and hope you don’t get 0 the next year? Seems tough. First world problems
Yes, exactly that. Since most of your money comes from one annual bonus check, there are a few things you can do to "smooth out" your expenses, though. For instance, lots of finance people will get an interest-only mortgage so that their monthly payments are low, but then at bonus time they'll use that bonus to voluntarily pay off the mortgage principal that they weren't paying during the year. Helps make the month-to-month expenses match up with your annual income.
Sounds like a good way to get foreclosed if you get a shit bonus / get fired
Yes, it’s basically that. Even at places with higher base, it is still a small percentage of your overall pay and you plan accordingly. This year, my base is probably 5-10% of my overall pay. So we pay big down payments (or all cash) when we have big purchases, keep some cash from the bonus in our checking/liquid, etc.
Hey man, thanks for your input. Are you a PM?
If yes, could you please provide insight on the second question? Everyone ignored that bit idk why. On average, how long does it take for a good analyst to become a PM? I know it's different across funds but, just on average. Thanks in advance.
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