New York / September 30, 2008 – Compensation for risk professionals in asset management grew an average of 17% in 2007 over 2006, continuing the trend of 17-18% growth analyzed since 2004 by Risk Talent Associates, a leading risk management executive search firm. Broken down by sub-segments, this growth rate was 25% for alternative investment firms, 14% for traditional asset management firms and 10% for insurance companies. Over 200 risk professionals participated in the survey representing all major geographies, risk specialties, titles and seniority.
Driving these higher growth rates for alternative investment firms are substantially higher non-cash bonus payments (stock, options, and other non-cash compensation). Non-cash bonuses grew by 37% for alternative investment firms compared to 15% and 13% respectively for traditional asset management firms and insurance companies. Cash bonus payments were more consistent across the three sub-segments with traditional asset management leading the pack with 22% growth, and the other two segments in the teens. Salary growth shows little variability between the sub-segments and mirrors trends in prior years growing at an average of 6%.
Michael Woodrow, president and founder of Risk Talent Associates comments that “while 2007 results reflect trends we have seen for several years, 2008 is likely to bring dramatic changes. We expect exceptional risk managers to continue earning top dollars, but discrepancies between firms will amplify as the hedge fund and asset management industries shakeout after recent turmoil in the US financial system.” Job changes over the last two years are more prevalent for alternative investment professionals at 30%, compared to 21% and 23% respectively for traditional asset managers and insurance executives included in the survey. Woodrow continues, “These professionals are largely changing jobs within the hedge fund industry. Firms who bet against sub-prime lenders are making money, others are suffering major losses. This is likely to accelerate movement of top talent within the industry.”
To build their risk management teams, internal recruiting still remains the most common process with 78% reporting that this is the method they choose. This figure is higher for insurance companies at close to 90% but far lower for alternative investment firms that are less likely to invest in corporate overhead. Job boards like www.globalriskjobs.com are the next most popular means of filling risk positions at almost 60% usage across asset management and slightly lower usage for alternative investment firms. Other means included contingency search, retained search and personal networking.
Risk Talent Associates compensation surveys have been published in 2008 for capital markets and asset management. Other surveys to be published this year will cover risk professionals in financial compliance, as well as the energy, consulting, software and corporate sectors.
About Risk Talent Associates
Risk Talent Associates (www.risktalent.com) is the leading international executive search firm focused exclusively on positions in the fields of market, credit and operational risk, as well as financial compliance and risk technology. Risk Talent’s expertise, industry knowledge, proprietary network and dedicated focus shorten the recruiting process to deliver senior and mid-level risk managers in the capital markets, asset management, energy, consulting and software industries. Risk Talent has offices in New York, Chicago, London, and Hong Kong.
Risk Talent Associates