Human Resource Services Financial Services

Asset Management Reward Survey 2009* Overview

*connectedthinking

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Contents

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Introduction Financial and demographic trends Incentive practice Governance Appendix – Illustrative survey outputs Contacts 5 7 17 29 35 37

Contents PricewaterhouseCoopers LLP

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Introduction

In September 2009 PricewaterhouseCoopers completed its fourth comprehensive survey into the reward and retention arrangements used by asset management organisations to compensate and incentivise senior executives and key employees. Following the success of the first three surveys, this year 23 high quality asset management organisations took part in the PwC Asset Management Survey 2009 which involved both the completion of a quantitative data template and an interview programme so that both retrospective and prospective activity could be captured. Q4 of 2008 proved to be challenging for many asset management businesses with poor absolute returns combining with both heavy redemptions and currency swings to impact revenues for many UK and European businesses. Although we have witnessed some signs of recovery since then, the downturn has taken its toll with many organisations reducing staff numbers and cost controls replacing investment in both business opportunities and human capital. Not withstanding the commercial strains faced, there have been unprecedented levels of scrutiny from regulators, governments, shareholders, and the public who have all sought to attach some blame for the financial crisis to inappropriate incentive practices in financial services. This has resulted in a number of pronouncements and we have summarised those most relevant to the sector. In the Governance section of the report we cover country specific responses.    On 2 April 2009 the Financial Stability Board (FSB) published its principles for sound compensation practices which have been endorsed by the G20 leaders at their recent summit