Are Mutual Fund Managers Paid For Investment Skill?

Ron Kaniel, Markus Ibert, Stijn Van Nieuwerburgh and Roine Vestman

No 12241, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

Keywords: Portfolio manager compensation; Mutual fund performance; Financial sector income (search for similar items in EconPapers)
JEL-codes: G00 G23 J24 J31 J33 J44 (search for similar items in EconPapers)
Date: 2017-08
New Economics Papers: this item is included in nep-fmk, nep-hrm and nep-lma
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Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Are Mutual Fund Managers Paid for Investment Skill? (2018)
Working Paper: Are Mutual Fund Managers Paid For Investment Skill? (2017)
Working Paper: Are Mutual Fund Managers Paid For Investment Skill? (2017)
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