Markus Ibert is a PhD student at the Stockholm School of Economics; Ron Kaniel is the Jay S. and Jeanne P. Benet Professor of Finance at the University of Rochester Simon Business School; Stijn Van Nieuwerburgh is David S. Loeb Professor of Finance at New York University Stern School of Business; and Roine Vestman is Assistant Professor at Stockholm University Department of Economics. This post is based on a recent paper by Mr. Ibert, Professor Kaniel, Professor Van Nieuwerburgh, and Professor Vestman. Related research from the Program on Corporate Governance includes Regulating Bankers’ Pay by Lucian Bebchuk and Holger Spamann; The Wages of Failure: Executive Compensation at Bear Stearns and Lehman 2000-2008 by Lucian Bebchuk, Alma Cohen, and Holger Spamann; and How to Fix Bankers’ Pay by Lucian Bebchuk by Lucian Bebchuk (discussed on the Forum here).
A substantial part of investment management is delegated to institutions such as mutual funds, pension funds, university endowments, and hedge funds. Mutual funds account for a significant part of this market. Prior research has mostly been silent on the important distinction between the fund family and the managers it employs to manage its different funds.
Understanding compensation of fund managers is paramount to understanding agency frictions in asset delegation, yet little is known about the nature of these compensation contracts, and even less about actual compensation managers earn.
