Review of Financial Studies Vol. 31 No. 2 2018
Are Mutual Fund Managers Paid for Investment Skill?
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.
- Volume
- 31
- Issue
- 2
- Pages
- 715-772
- Sources
- bibtex:phds-export.bib