Are Mutual Fund Managers Paid For Investment Skill?

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

No 12010, 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 data set 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 revenues and profits add substantial explanatory power for compensation to manager-level revenue and performance, highlighting the importance of the mutual fund firm.

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: 2017-04
New Economics Papers: this item is included in nep-fmk and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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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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