Compensation for executives in Family Offices typically correlates to the amount of assets under management, the complexity of the organization and their responsibilities. As assets under management increase, many Single Family Offices have and will continue to employ non-family members, which is clearly the current trend. In order to attract and retain the top executives, SFOs are utilizing more long-term incentive plans (LTI), with co-investment opportunities and carried interest along with deferred compensation plans.
Many Single Family Offices are still compensating their executives with a competitive salary and discretionary bonuses, however that is really “old school” and not considered to be the most effective way to attract and retain their key executives.
We are advising our clients to utilize long term incentive plans along with co-investment and carried interest as “best practices” in today’s market. When a family office is not willing to go in that direction, we have suggested paying more competitive base salaries with guaranteed bonuses if necessary, to attract the “best available athlete”.
If you have any additional questions, please contact Michael Rosenblatt, President of The Quest Organization at Michael@questorg.com