Asset gains will not push incentive compensation up due to the shift in assets to lower-fee products and the rebalance out of equities into fixed income strategies, the compensation consulting firm states in its second-quarter trends and year-end projections report released today.

Revenues have replaced market gains and assets under management as predictors of incentive compensation, according to Johnson Associates.

“We always looked at simple gauges in the industry: If the market was up 15%, that would be a very attractive pay year,” Johnson says. “[Now], AUM doesn’t mean what it used to. We now realize that a dollar of AUM is not the same as another dollar.”

Fund Fire / August 6, 2019