Are Mutual Fund Managers Paid For Investment Skill?

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

No 23373, NBER Working Papers from National Bureau of Economic Research, Inc

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 revenues and profits add substantial explanatory power for compensation to manager-level revenue and performance, highlighting the importance of the mutual fund firm.

JEL-codes: G00 G11 G2 G23 G24 J3 J31 J33 J44 (search for similar items in EconPapers)
Date: 2017-04
New Economics Papers: this item is included in nep-hrm and nep-lma
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Published as Markus Ibert & Ron Kaniel & Stijn Van Nieuwerburgh & Roine Vestman, 2018. "Are Mutual Fund Managers Paid for Investment Skill?," The Review of Financial Studies, vol 31(2), pages 715-772.

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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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