Based on the increase in high demand for investment professionals there has been a corresponding increase in their salary and bonus amounts since the year 2014. There are a few factors that led to this steady increase in pay over the years. One of these factors that led to the increase in salary and bonus amount is that large investment agencies favor using the fund performance metric system to calculate bonuses. This system is one of three components used to calculate a deserving bonus for a job well done by an investment professional. Follow GoBuyside on Instagram.
— GoBuyside (@gobuyside) June 14, 2018
In the investment business world, it is common knowledge that investment professionals are in high demand. Prior to this high demand for investment professionals, investment agencies practiced the main focus on fund performance metric system in determining a bonus amount for investment professionals that are employed. What this means is that an investment agency primarily focused on how much investment returns an employee brought to the company with each investment. Before the noted high demand in investment professionals, investment agencies did not afford the other two factors in calculating a bonus (firm performance and individual performance) enough merit in determining a true estimation for a bonus amount; however, they were still taken into consideration when calculating an appropriate bonus. Follow GoBuyside on Twitter.com.
After it became clear there was a growing demand for investment professionals they then had the option of seeking employment at another investment agency if they consider the other agency more accommodating in providing a desired salary and bonus amount. Therefore, in fear of losing promising investment professionals, Gobuyside provide desirable salary amounts as well as increasing bonus amounts based primarily, if not solely, on their fund performance instead of an employee’s overall performance. Especially because it has already become a common practice and expectation from investment professionals that the bonus amount they receive is mainly determined by their investment returns. It is reasonable that an investment professional employee has an estimation of what their bonus amount will be based on what they know their investment returns to be. If an investment company fails to meet the expectation by calculating a lower bonus amount by considering all three components for estimating a deserved bonus amount it may result in an investment professional employee resigning.