Asset managers rival banks for ‘out of control’ bonus culture

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The bonuses paid to US and European fund group bosses were 15 times larger than their salaries last year as legislation focuses on banking rather than asset management remuneration, analysis reveals.

BlackRock’s chief executive Larry Fink and T. Rowe Price chief James Kennedy had the highest level of variable pay to their fixed salary, analysis of the 20 largest listed asset managers in both regions by FTfm revealed.

Fink’s bonuses and share awards was 2,766 per cent of fixed pay last year, totalling $26m (£20m), almost 30 times his base salary, according to the report.

Kennedy had a total pay of $9m, which was 2,399 per cent of his fixed pay for the past year.

Within Europe, Ashmore’s Mark Coombs was the highest paid with a total pay of 1,837 per cent of his fixed pay for a total of £1.9m.

ShareAction senior policy officer Camilla de Ste Croix told FTfm asset management bonus culture was “out of control”.

She says: “Following the financial crisis, a lot of new EU legislation and reforms were directed at the banking sector. The asset management sector has not faced the same level of scrutiny.”

The news comes after star fund manager Neil Woodford announced his firm will stop paying bonuses to senior staff.

Woodford has also hit out at his peers in the UK fund management industry for failing to hold companies to account on executive pay and other corporate governance measures.

UK prime minister Theresa May has previously pledged to place tighter controls on executive pay, to ensure the country works for everyone not just for “the privileged few”.

In August, Fund Strategy research revealed a lack of transparency about how fund managers are paid, and lack of clarity on whether fund performance is the real driver behind pay.