Battle for talent at family offices boosts incentive plans and pay

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According to a new report, family offices increase talent wars and create new incentive plans for senior executives who increase wages.

According to a report by Morgan Stanley Private Asset Management and Botoff Consulting, the majority of family offices are using long -term incentive compensation plans that increase total payment according to performance and investment returns. According to the report, about two -thirds of investment -oriented family offices use long -term incentive compensation.

Although family offices generally provide special performance bonuses to managers, prizes become more configured, open and generous.

“We see that the formation of compensation plans has increased over time,” Valerie Wong Fountain, General Manager of Family Office Resources and Joint Management in Morgan Stanley, said, “Over time, the formation of compensation plans.” He said. “If you return for a few years, you may have seen more handshake agreements. Now it has been more configured and measured against performance.”

According to the report, it is $ 825,000 per year in investment-oriented family offices with more specialized, high-paid teams and similar to in-house financial companies. Larger investment -oriented family offices, which have an existence of over $ 1 billion, pay a median over $ 1.2 million. According to the report, the rising fee at the top of investment -oriented companies paid an average fee for $ 1 billion CEOs.

Chief investment officers or CIOs also benefit. The median fee for investment -oriented CIOs is now $ 900,000, an average of $ 1.8 million.

Incentive plans are also changing. Common investments become particularly popular and allow managers to invest in agreements with the family. Rich families often have an additional opportunity to invest next to the family, as they usually obtain special access to growing companies and popular agreements. Some executives can get loans from the family to make joint investments, while the report said that the joint investments (85%) were financed by the participants.

“A strong way to eat your own meals,” Wong Fountain said.

Other common incentive plans carry the interests of the manager as well as a criterion as well as equality of fantom, profit sharing and postponed incentive plans, as well as investment gains.

“In a constant competitive talent market, families are increasingly talented and more specialized to attract their visions, mission and strategies to carry out their visions, mission and strategies,” Botoff Consulting, the director of Botoff Consulting. He said.