Pay rises for risk managers, says report

Compensation for risk management professionals working in asset management firms grew 18% in 2005, with salaries rising 5.5% and bonuses up 20-30% on average, according to a study by US-based recruitment firm Risk Talent Associates.

The 2006 Risk Talent Associates Professional Compensation Survey: Asset Management surveyed 200 risk professionals from three types of asset management firms – alternative investments (hedge funds, funds of funds), traditional asset management and insurance. It found that of the three groups, alternative investment firms offered higher salaries and bonuses than traditional asset managers and insurance companies.For example, a risk professional at the vice-president/senior vice-president/director level in an alternative investment firm earned on average $494,000 in 2005, up more than 20% from 2004. This comprises $200,000 in drawn salary, $230,000 in the form of cash bonus and $64,000 in non-cash bonus.In comparison, risk managers at traditional asset management firm earned $355,000 on average in 2005, including $150,000 in salary, $140,000 in cash bonus and $65,000 in non-cash bonus. The equivalent position in an insurance company paid $324,000 in 2005, including $188,000 in salary, $113,000 in cash bonus and $23,000 in non-cash bonus, the survey found. The latest survey is a part of a series of compensation surveys published by Risk Talent Associates. The firm recently released the Professional Compensation Survey: Capital Markets, and will also be publishing two more surveys on financial compliance and another on the energy, consulting, software and corporate sectors. The asset management survey found that 30% of respondents changed jobs within the past two years, as compared with only 17% in the capital markets survey.