A fund circle person told “Caijing” new media, active equity management scale of more than 10 billion fund managers, the annual salary of more than 10 million, the top flow can even reach more than 50 million yuan. The average fund manager makes millions a year.
Article | caijing, new media Jiang Jinli edit | Jiang Shizhou
The most controversial figure in the current fund circle should be Cai Songsong, the fund manager of Nuoan Growth.
This is because of heavy semiconductor and popular, with “one base force” several times on the hot search alternative top flow, in the past year, for the fund circle contributed a lot of jokes and attention. Compared to the recent hot “Kun Kun” “Lan Lan” “Chun Chun”, he is the real fund out of the first person.
Recently, the news that “Nuoan Fund Manager Cai Songsong’s year-end bonus is expected to exceed 70 million yuan” has been widely spread, causing a heated discussion among the people who ate melon. Many critics also criticized it.
In the face of public opinion continues to ferment, the official Nuoan Fund said: “this number is too exaggerated.” On the one hand, the company implements the secret salary system, and does not know the salary situation of other employees. On the other hand, the company will give some incentive policies to excellent employees according to their performance, which is also the way of attracting and retaining talents.
The response did not stop the guesswork of the melon eaters. Where is the salary ceiling of the fund company, is the issue that everyone really cares about.
A misunderstood year-end bonus
Cai manager after all injustice not injustice?
As a matter of fact, the story is quite eye-catching.
One web celebrity fund manager, who manages more than $30 billion in funds, has a management fee of $450 million a year at a 1.5 percent management fee, the source said. For a star fund manager like him, he can get 15% of the management fee, or nearly 70 million yuan, which is enough for the average worker to work for more than ten lifetimes.
Behind this seemingly consistent logic, there are several common-sense mistakes.
First of all, the 1.5 per cent management fee is impossible for the fund company to get the full amount. Nearly half of that is to be allocated to banks, brokerages, Internet platforms and other channels as sales incentives, known in the industry as “tailgating commissions”.
In early years, strong channels, the proportion of the final commission requirements as high as 70, 80 percent. Until October 1 last year, the CSRC implemented new rules on fund sales, bringing to light the shadowing fees that had been hidden behind the scenes and setting a 50 per cent cap.
Of course, the direct part of the management fees, all belong to the fund company, but as we all know, more than 90% of the fund sales, from the sales channel.
Second, fund management fees are calculated and withdrawn on a daily basis. The scale of Cai Songsong’s management is not always above 30 billion yuan. He manages two funds, Noan Growth and Noan Hexin, with a combined value of about 8 billion yuan at the end of 2019, according to the quarterly report. By the end of 2020, it will gradually climb to 41 billion yuan.
Moreover, fund managers are subject to 45 per cent income tax on their bonuses. Moreover, the fund manager’s bonus will not be paid out all at once. According to regulations, public offering funds need to implement income deferment, that is, a part of the fund manager’s income in the current year should be deferred for 2-3 years before payment.
Pay motivates all
The blunder ended with the official denial of the rumor, but the public’s curiosity about the high salaries in the fund circle increased.
A number of fund companies to “Caijing” new media revealed that each fund company’s compensation incentives are not the same. Fund companies that usually adopt a divisional system will give a higher percentage of bonuses.
On the issue of salaries, fund companies have always been very secretive. But where there are people, there are places, especially the closer they are to money. China Judicial Document Network disclosed a fund company’s salary dispute case:
Xue Tianyuan, a fund manager, took Changxin Fund to court. He had been the investment director and fund manager of the firm’s international business division, and had fallen out with his former employer over bonus allocation issues.
In the lawsuit, Xue Tianyuan said that the company had issued assessment regulations in February 2015. In 2015 and 2016, the main assessment criteria were the balance of revenue and expenditure of the department and the creation of profits. After meeting the standards, the company would give rewards as appropriate, and the employees who made profits would receive 100% of the profits of the department as performance bonuses.
On this basis, he asked Changxin Fund to pay it 7,394,100 yuan for its 2016 annual performance. But long letter fund argued that the company in December 30, 2015 by the general manager office meeting decided to implement the new 2016 business assessment management methods. Xue Tianyuan did not meet the assessment conditions for the payment of performance bonus, so he did not receive performance bonus.
Which is right and which is not, as a medium-sized fund company, long letter fund high salary incentive to the outside world.
“Apart from the better-known names in the industry, there is not much of a gap in overall fund manager pay.” A Shanghai fund circle person told “Caijing” new media, active equity management scale of more than 10 billion yuan of fund managers, annual salary of more than 10 million, the top flow can even reach more than 50 million yuan. The average fund manager makes millions a year.
A fund manager in Beijing told reporters in early 2019 that most companies give their general fund managers 12 months ‘salary as year-end bonuses. The biggest difference lies in the assessment mechanism, his fund company is mainly to see the relative ranking of performance, “basically performance ranking in the first half of the 60-70 points, reach 60 points pass the line to get the year-end bonus.”
However, in recent years, the assessment indicators of public offering have become more and more diverse. In addition to the relative ranking of performance, scale increment, management fee income, awards, etc., are also considered factors.