October 2015 2015 FIACIAL COMPESATIO SURVEY
Letter from the President As premier professional organizations for investment professionals in our region, CFA Society Madison and CFA Society Milwaukee are dedicated to being reliable and trustworthy sources of information. We strive to serve our members by providing them the resources to aide in their career development and advancement. ew for our market, we are excited to announce the highly anticipated findings of the 2015 Financial ensation Survey. This survey, which had been void in the market since 2007, provides a regionspecific analysis of compensation levels for investment and financial professionals. This document captures the findings of this survey, providing an overview of the survey-wide results. For those who participated in the survey, I thank you for your contribution to this important market resource. I am confident the information shared in this document will be of value to you. Regards, Christopher Reed, CFA President, CFA Society Madison Christopher K. Merker, CFA President, CFA Society Milwaukee 1
Executive Summary Executive Summary Access to accurate and data-driven information plays a significant role in the ability of financial and investment professionals to effectively perform in their careers. The same is true to successfully advance one s career. However, since 2007 this source of data has been missing, spurring the deployment of the 2015 Financial ensation Level Survey by CFA Society Madison and CFA Society Milwaukee. Remaining true to the stated commitment to provide an accurate snapshot of the compensation levels for the entire financial and investment industry, the survey findings are presented to demonstrate compensation based on the most popular positions and other demographics. Given the imperative to accurately, albeit broadly, define compensation levels of financial professionals in the Madison and Milwaukee region, CFA Society Madison and CFA Society Milwaukee conducted a self-reporting survey. This primary research examines the impact of variables (e.g. tenure, title, CFA designation, education, et al) on compensation levels. In addition, compensation components and desired pay structure were captured, as were annual salary change data. The results are meant to provide a general snapshot of the current state of the market. Data shows professionals who invest their time in attaining advanced degrees and CFA certification tend to have higher compensation levels than those who don't. This is based on self-reported data collected by CFA Society Madison and CFA Society Milwaukee. $250,000 $200,000 $150,000 $100,000 $50,000 $72,000 $177,800 $0 Bachelors Degree on-charterholder Median Total ensation $111,000 $225,000 Graduate Degree CFA Charterholder 2
Respondent Profiles Years of Experience Charterholder Status <2 years 10% 2 to <5 years 15% 5 to <10 years 22% 10 to <20 years 32% 20 years or more 22% AUM of Firm <$500 million 7% $500 to <$2 billion 13% $2 to <$10 billion 20% $10 to <$50 billion 13% $50 to <$100 billion 7% $100 billion or more 32% ot applicable 9% Charterholder 71% one 6% Candidate 23% Likelihood of Looking for ew Role in 2015 Education Some college but 0% no degree Associate degree 0% Bachelor degree 48% Graduate degree 51% Doctorate 1% Very Likely 12% Likely 21% Unlikely 40% Very Unlikely 27% 3
Respondent Profiles Fifteen Most Common Job Titles Organization Type Buy-side Research Analyst (equity) 12% Portfolio Manager (equities) 10% Buy-side Research Analyst (fixed income) 9% Portfolio Manager (fixed income) 6% Financial Advisor/Broker 5% Chief Investment Officer 5% Consultant 5% Risk Manager 5% Accountant/Auditor 4% Bank/Private Client Portfolio Manager 4% Manager Research (equity) 3% Performance Analyst 3% Buy-side Research Analyst (other) 3% Private Client Professional (other) 2% Credit Analyst (rating) 2% Investment management firm 40% Investment bank, commercial bank, 24% brokerage firm Insurance company 13% Other 7% Consulting, accounting, law firm 5% Government agency/department 5% Endowment, foundation, 2% other not-for-profit Educational institution 1% Corporate plan sponsor 1% Family office 1% Employer Size <50 27% 50 to <250 18% 250 to <500 6% 500 to <2,500 13% 2,500 to <5,000 14% 5,000 or more 22% 4
Financial ensation Change in Total ensation Increased more than 20% 8% Increased 10<20% 16% Increased 0<10% 55% Stay the same 18% Decline 4% Primary Determinant of Bonus Other Forms of ensation Business unit/division performance 28% Overall firm performance 24% Discretionary 13% Individual investment performance 13% Other factors related to 13% individual performance Individual financial contribution 5% Commissions generated 3% Cash bonus performance 86% Employer 401(k) contributions 79% Profit sharing 32% Restricted stock awards/phantom share 13% Deferred/multi-year earnings 11% Commission/sales bonus 9% Stock options 3% 5
Financial ensation Median Total ensation by Occupation Base Bonus Other Total Accountant/Auditor 63,000 14 5,500 11 3,000 14 71,750 14 75th Percentile 77,625 8,550 5,750 90,375 Bank/Private Client Portfolio Manager 132,500 13 30,000 13 22,000 13 195,000 13 75th Percentile 169,000 40,000 36,100 247,800 Buy-side Research Analyst (equity) 135,000 41 45,256 36 16,000 41 189,000 41 75th Percentile 155,000 136,250 28,000 282,500 Buy-side Research Analyst (fixed income) 120,000 29 120,000 26 8,059 29 236,000 29 75th Percentile 145,000 150,000 15,000 283,800 Buy-side Research Analyst (other) 85,000 9 20,000 8 2,500 9 108,400 9 75th Percentile 95,000 48,250 4,500 145,500 Chief Investment Officer 165,000 17 65,000 14 16,500 17 241,500 17 75th Percentile 200,000 175,000 52,000 441,000 Consultant 76,500 16 12,500 10 3,000 17 83,000 17 75th Percentile 136,250 26,500 6,000 150,000 Credit Analyst (rating) 65,000 7 5,000 7 2,000 7 71,000 7 75th Percentile 110,000 20,750 3,650 151,000 Financial Advisor/Broker 80,000 13 20,500 14 5,450 18 101,500 18 75th Percentile 100,000 92,500 92,500 320,300 Head of Fixed Income 215,000 6 252,500 6 28,750 6 575,250 6 75th Percentile 391,250 348,750 51,750 611,875 Institutional Representative Manager 167,500 6 101,000 5 55,500 6 289,500 6 75th Percentile 215,000 450,000 146,500 690,750 Manager of Managers 120,000 7 53,500 6 10,000 7 192,000 7 75th Percentile 133,500 129,250 23,500 269,500 Manager Research (equity) 77,000 11 15,000 9 4,200 11 97,500 11 75th Percentile 117,500 38,000 5,863 153,950 continued» 6
Financial ensation Median Total ensation by Occupation Base Bonus Other Total Performance Analyst 50,000 11 10,000 9 5,000 11 63,000 11 75th Percentile 68,500 12,500 6,000 83,815 Portfolio Manager (equities) 170,000 34 66,900 33 17,500 34 251,500 34 75th Percentile 200,000 213,770 38,813 426,875 Portfolio Manager (fixed income) 150,000 19 75,000 17 14,000 19 245,000 19 75th Percentile 172,500 180,000 62,750 345,800 Private Client Professional (other) 68,000 7 16,000 6 5,950 8 79,200 8 75th Percentile 101,500 26,000 16,875 142,200 Risk Manager 101,000 17 25,500 16 5,600 17 136,000 17 75th Percentile 143,000 71,000 39,000 254,300 Sell-side Research Analyst (equity) 79,750 6 9,750 6 4,500 6 92,500 6 75th Percentile 98,625 40,500 6,875 142,875 7
Financial ensation Reported Median ensation for Those With More Than 20 Years of Experience for Selected Occupations Base Bonus Other Total Portfolio Manager (equities) 150,000 14 30,000 13 20,284 14 226,975 14 Portfolio Manager (fixed-income) 182,500 6 144,800 6 45,250 6 326,550 6 Consultant Financial Advisor/Broker Buy-side Research Analyst (equity) Buy-side Research Analyst (fixed-income) Buy-side Research Analyst (other) Performance Analyst Chief Investment Officer 200,000 7 200,000 5 41,000 7 323,000 7 Bank/Private Client Portfolio Manager 162,500 8 33,500 8 28,900 8 232,400 8 Accountant/Auditor Risk Manager Chart includes most popular job titles; cells in gray represent five or fewer responses. Median total compensation for those with more than 20 years of experience was $247,900 8
Financial ensation Reported Median ensation for Those With 10 to Less Than 20 Years of Experience for Selected Occupations Base Bonus Other Total Portfolio Manager (equities) 177,500 18 145,000 18 17,500 18 372,385 18 Portfolio Manager (fixed-income) 157,500 6 97,500 6 11,325 6 322,000 6 Consultant Financial Advisor/Broker Buy-side Research Analyst (equity) 153,000 16 80,000 15 21,524 16 246,500 16 Buy-side Research Analyst (fixed-income) 126,000 13 145,000 11 8,059 13 276,000 13 Buy-side Research Analyst (other) Performance Analyst Chief Investment Officer 165,000 7 35,000 7 11,500 7 241,500 7 Bank/Private Client Portfolio Manager Accountant/Auditor Risk Manager 150,000 6 94,000 6 67,160 6 291,510 6 Median total compensation for those with 10<20 years of experience was $235,500 9
Financial ensation Reported Median ensation for Those With 5 to Less Than 10 Years of Experience for Selected Occupations Base Bonus Other Total Portfolio Manager (equities) Portfolio Manager (fixed-income) 100,000 7 70,000 5 12,000 7 225,500 7 Consultant Financial Advisor/Broker 63,000 6 23,000 7 2,500 7 94,468 7 Buy-side Research Analyst (equity) 117,500 12 46,012 11 5,915 12 166,171 12 Buy-side Research Analyst (fixed-income) 120,000 5 150,000 5 5,000 5 252,000 5 Buy-side Research Analyst (other) Performance Analyst Chief Investment Officer Bank/Private Client Portfolio Manager Accountant/Auditor Risk Manager 75,000 5 18,000 5 3,750 5 112,000 5 Median total compensation for those with 5<10 years of experience was $119,425 10
Financial ensation Reported Median ensation for Those With Less Than 5 Years of Experience for Selected Occupations Base Bonus Other Total Portfolio Manager (equities) Portfolio Manager (fixed-income) Consultant 56,125 10 5,025 6 2,000 10 68,650 10 Financial Advisor/Broker Buy-side Research Analyst (equity) 60,000 9 15,000 6 5,421 9 72,000 9 Buy-side Research Analyst (fixed-income) 70,000 8 17,000 7 5,550 8 90,000 8 Buy-side Research Analyst (other) 75,000 5 20,000 5 3,950 6 94,075 6 Performance Analyst 47,500 8 5,100 6 3,840 8 54,250 8 Chief Investment Officer Bank/Private Client Portfolio Manager Accountant/Auditor 60,500 10 6,000 7 3,000 10 70,050 10 Risk Manager Median total compensation for those with <5 years of experience was $73,285 11
Financial ensation ensation by Employer Size Breakdown by Assets & Employee Size Base Bonus Total Under $500 million Under 50 80,500 20 22,000 12 92,660 21 50 to less than 250 250 to less than 500 500 to less than 2,500 2,500 to less than 5,000 5,000 or more $500 million to less than $2 billion Under 50 85,500 26 15,000 20 122,950 26 50 to less than 250 250 to less than 500 97,000 6 130,400 6 500 to less than 2,500 2,500 to less than 5,000 5,000 or more $2 billion to less than$10 billion Under 50 150,000 34 45,506 28 227,500 34 50 to less than 250 137,000 13 25,000 12 161,000 13 250 to less than 500 500 to less than 2,500 74,000 8 6,000 7 80,150 8 2,500 to less than 5,000 144,000 5 40,000 5 202,044 5 5,000 or more $10 billion to less than $50 billion Under 50 100,000 6 165,000 6 277,000 6 50 to less than 250 165,000 13 75,000 11 283,800 13 250 to less than 500 500 to less than 2,500 110,000 5 18,000 5 134,000 5 2,500 to less than 5,000 126,000 15 80,000 15 212,000 15 5,000 or more 175,000 6 56,500 6 273,550 6 12
Financial ensation ensation by Employer Size Breakdown by Assets & Employee Size Base Bonus Total $50 to less than $100 billion Under 50 50 to less than 250 152,500 6 185,000 6 369,000 6 250 to less than 500 500 to less than 2,500 2,500 to less than 5,000 5,000 or more 134,000 10 37,500 10 185,000 10 Over $100 billion Under 50 50 to less than 250 150,000 21 143,000 20 283,000 21 250 to less than 500 100,000 8 45,000 8 159,500 8 500 to less than 2,500 100,000 13 30,000 13 136,000 13 2,500 to less than 5,000 101,000 18 54,000 18 155,000 21 5,000 or more 100,000 41 44,500 41 190,000 43 ot Applicable Under 50 50 to less than 250 250 to less than 500 500 to less than 2,500 87,000 10 84,000 11 2,500 to less than 5,000 5,000 or more 108,000 9 7,500 7 121,500 9 Additional detailed analysis of this compensation breakdown is available upon request from CFA Society Madison and CFA Society Milwaukee. "ot Applicable" represents the various organizations financial professionals work for that do not manage assets or investments. 13
Financial ensation Average Ideal ensation Structure for Selected Occupations Accountant/Auditor 82% 12% 4% 1% Bank/Private Client Portfolio Manager 72% 20% 8% 0% Buy-side Research Analyst (equity) 58% 36% 5% 1% Buy-side Research Analyst (fixed income) 56% 40% 4% 0% Buy-side Research Analyst (other) 71% 25% 3% 1% Chief Investment Officer 62% 22% 9% 7% Consultant 77% 13% 4% 7% Credit Analyst (rating) 80% 19% 1% 1% Financial Advisor/Broker 54% 26% 8% 12% Head of Fixed Income 54% 44% 2% 1% Institutional Representative Manager 43% 44% 12% 1% Manager of Managers 58% 37% 4% 1% Manager Research (equity) 74% 19% 7% 0% Performance Analyst 79% 15% 3% 3% Portfolio Manager (equities) 55% 36% 8% 1% Portfolio Manager (fixed income) 56% 37% 7% 0% Private Client Professional (other) 66% 21% 1% 13% Risk Manager 68% 23% 8% 1% Sell-side Research Analiyst (equity) 67% 32% 1% 0 20 40 60 80 100 Base % Cash Bonus % Long-term % Other % 14
Survey Methodology Survey Methodology Method An online survey was deployed to known financial professionals in the region represented by CFA Society Madison and CFA Society Milwaukee. Email subscribers of CFA Society Madison and CFA Society Milwaukee and LinkedIn group members were specifically targeted. The survey was not limited to just these audiences. In addition, this survey was structured so all data gathered was anonymous, with no identifiable information requested. Respondents Respondents are financial and investment professionals, totaling 357 unique and completed responses. Timing The survey was active from April 15, 2015 May 11, 2015. Assumptions The findings from this survey were derived from self-reported data. Because the survey uses sampling methodology and broadly defined positions, survey findings are not necessarily representative of the total population; rather, the survey is designed to provide general information about pay levels within the industry. Earning any degree or professional designation is no guarantee of employment or compensation. Generously supported by Hirenomics, LLC Hirenomics is an Executive Recruiting firm specialized in the financial services industry. Our firm represents investment management, private equity, and insurance companies that range from firms with over a trillion in AUM to small boutique firms across the country. What separates our firm from others is our high touch, methodical process to recruiting, along with our unparalleled approach to unearthing passive candidates. As a leader in recruiting, we are proud to say we hold some of the top return-on-investment and long-term retention stats in the industry: a 99% closing ratio and a 94% retention ratio. If you are interested in learning more about Hirenomics, go to http://hirenomics.com/. 15
About CFA Society Madison and CFA Society Milwaukee About CFA Society Madison and CFA Society Milwaukee With more than 200 members, CFA Society Madison is the premier professional organization for the investment management industry in the Madison area. The mission of CFA Society Madison is to provide our members and the local community with educational and networking opportunities, while promoting the highest ethical standards by using our resources, expertise, and affiliation with CFA Institute. We pride ourselves in our strong commitment to engaging with local universities and their students who comprise a significant amount of area candidates pursuing the CFA charter. CFA Society Madison was established as a Chapter of the CFA Society Milwaukee in 1995, transitioned to being a separate Society in 1998 and was incorporated on January 4, 1999. CFA Society Milwaukee, established in 1955 and incorporated in 1970, is the local society affiliate of CFA Institute, the premier organization serving investment management professionals globally, headquartered in Charlottesville, Virginia. Since its founding, CFA Society Milwaukee has served the needs of investment professionals by providing high-quality educational programs and a regional forum for its membership. It is dedicated to promoting the highest standards of professional ethics, conduct and competence amongst its membership and the investment community it serves. CFA Society Milwaukee membership consists of approximately 600 professionals who are employed with area banks, insurance companies, investment counselors, brokers, public agencies, universities, and corporations. CFA Society Milwaukee plays a vital role within the investment community. If you are interested in learning more about earning your charter, or to learn more about CFA Society Madison and Milwaukee, contact cfa@cfamadison.org (Madison) or info@cfamilwaukee.org (Milwaukee). Follow CFA Society Madison at: Follow CFA Society Milwaukee at: 16