Download This PaperAre Mutual Fund Managers Paid for Investment Skill?
72 Pages Posted: 10 Feb 2017 Last revised: 2 Aug 2017
There are 4 versions of this paper
Are Mutual Fund Managers Paid for Investment Skill?
Are Mutual Fund Managers Paid for Investment Skill?
Are Mutual Fund Managers Paid for Investment Skill?
Are Mutual Fund Managers Paid for Investment Skill?
Date Written: July 31, 2017
Abstract
Compensation of mutual fund managers is paramount to understanding agency frictions in asset delegation. We collect a unique registry-based dataset on the compensation of Swedish mutual fund managers. We find a concave relationship between pay and revenue, in contrast to how investors compensate the fund company (firm). We also find a surprisingly weak sensitivity of pay to performance, even after accounting for the indirect effects of performance on revenue. Firm-level fixed effects, revenues, and profits add substantial explanatory power for compensation to manager-level revenue and performance.
Keywords: Portfolio Manager Compensation, Mutual Fund Performance, Wage Dynamics
JEL Classification: G00, G23, J24, J31, J33, J44
Suggested Citation: Suggested Citation
Ron Kaniel
University of Rochester - Simon Business School ( email )
Rochester, NY 14627
United States
HOME PAGE: http://rkaniel.simon.rochester.edu
Stijn Van Nieuwerburgh (Contact Author)
Columbia University Graduate School of Business ( email )
3022 Broadway
Uris Hall 809
New York, NY New York 10027
United States
HOME PAGE: http://https://www0.gsb.columbia.edu/faculty/svannieuwerburgh/
