Fundsters' Bonuses Could Fall By a Quarter In 2022
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Monday, November 21, 2022

Fundsters' Bonuses Could Fall By a Quarter In 2022

Fundsters' 2022 bonus prospects are looking even worse than they did earlier this year, at least according to the folks at one financial services-focused compensation consulting firm.

The folks at Johnson Associates predict, in their "Financial Services Compensation Third Quarter Trends and Year-End Projections" report, that "incentive funding" at traditional asset managers will fall between 20 and 25 percent this year compared with 2021, on a headcount-adjusted basis (and without taking into account the impact of inflation). That's an increase from their prediction (after Q2 2022) of a 15 to 20 percent 2022 drop and from their prediction (after Q1 2022) of 10 to 15 percent 2022 drop. They point to AUM (and thus revenue) drops thanks to market declines (both in stocks and bonds) and equity fund outflows.

The predicted 2022 bonus plunge would, according to the Johnson team, push asset manager incentive funding to more than 10 percent lower than its 2018 levels.

Looking ahead, the Johnson team sees asset managers slowing hiring and even conducting layoffs as the "pressure to cut costs increases." Across financial services, they see base salaries up about 4.5 percent compared to 2021 while predicing flat or dropping headcounts in 2023.

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