2016 FINANCIAL COMPENSATION SURVEY FINDINGS AND RESULTS. November 2016

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1 2016 FIACIAL COMPESATIO SURVEY FIDIGS AD RESULTS ovember 2016

2 LETTER FROM SOCIETY LEADERSHIP Dear Colleagues, As premier professional organizations for investment professionals, CFA Society Kansas City and CFA Society St. Louis are dedicated to being reliable and trustworthy sources of information. Each Society strives to serve members by providing them the resources to aid in their career development and advancement. We are excited to announce the highly anticipated findings of the 2016 Financial ensation Survey. This is the first year for Kansas City and the second year for St. Louis to participate in the survey, which provides a region-specific analysis of compensation levels for investment and financial professionals. This whitepaper captures the findings of the survey, providing an overview of the survey-wide results. For those who participated in the survey, we thank you for your contribution to this important market resource. We are confident the information contained in this document will be of value to you. Regards, Matthew Montgomery, CFA President, CFA Society Kansas City Patrick O eil, CFA President, CFA Society St. Louis 1

3 EXECUTIVE SUMMARY Executive summary Access to accurate and data-driven information plays a significant role in the ability of financial and investment professionals to effectively perform in their careers. The same is true to successfully advance one s career. The 2016 CFA Societies Financial ensation Survey seeks to provide access to this vital information. This report is a compilation of the results from a survey on compensation practices in Kansas City and St. Louis conducted earlier this year; 216 professionals completed the survey. Remaining true to the stated commitment to provide an accurate snapshot of the compensation levels for the entire financial and investment industry, the survey findings are presented to demonstrate compensation based on the most popular positions and other demographics. The survey requested self-reported data on numerous aspects of compensation. In addition to covering base salary and total compensation, the survey addressed the respondent s CFA Charterholder status, level of education, and occupation. Information on the type and size of the firm as well as the amount of assets under management were included in the survey. The survey captured annual salary change data and the respondent s view on the adequacy of compensation and the desire to explore other job opportunities. The 2016 Financial ensation Survey data and exhibits are intended to provide general guidance for comparing compensation levels with overall values for key categories. ote that actual compensation potential may vary relative to the numbers generated by the survey given the use of relatively broad category definitions. Also, the estimation of compensation based on any single factor may not predict reasonably accurate estimates. Details surrounding actual job responsibilities and the confluence of multiple factors may result in higher or lower compensation levels. Median total compensation Our data show that professionals who attain the CFA designation and/or a graduate degree tend to have higher compensation levels. Bachelor degree Graduate degree on-charterholder CFA Charterholder $124,373 $179,750 $121,045 $212,500 2

4 RESPODET PROFILES Years of experience Education < 2 years 2 5 years 5 10 years years 20 + years 2.0% 9.0% 25.0% 41.0% 23.0% Some college but no degree Associate degree Bachelor degree Graduate degree Doctorate 0.0% 0.0% 42.6% 55.6% 1.9% Charterholder status 98.5% of those surveyed report that CFA Charter designation has helped career 4.0% Candidate 91.0% Yes 5.0% o Feel fairly compensated Feel valued by their company 76.2% Yes 23.8% o 82.3% Yes 16.3% o 1.4% /A 3

5 RESPODET PROFILES Employer size < to < to < to < 2,500 2,500 to < 5,000 5, % 18.0% 12.0% 19.0% 8.0% 15.0% Opportunity for advancement within company 26.8% o 16.3% ot sure Likelihood of looking for a new role in % Very unlikely 52.6% Yes 4.3% /A 46.9% Unlikely 8.6% Very likely 16.3% Likely AUM of firm < $500 million $500 million to < $2 billion $2 billion to < $10 billion $10 billion to < $50 billion $50 billion to < $100 billion $100 billion ot applicable 11.0% 10.0% 21.0% 21.0% 6.0% 21.0% 11.0% 4

6 RESPODET PROFILES Fifteen most common occupations Portfolio Manager (equities) Chief Investment Officer Consultant Buy-Side Research Analyst (equity) Bank/Trust/Private Client Portfolio Manager Buy-side Research Analyst (fixed income) Portfolio Manager (fixed income) Financial Advisor/Broker Financial Analyst (corporate) Manager of Managers Manager Research (equity) Sell-side Research Analyst (equity) Buy-side Research Analyst (other) Client Services Manager Research (alternatives) 13.0% 10.6% 8.3% 7.9% 6.9% 5.6% 4.6% 3.7% 3.2% 3.2% 3.2% 3.2% 1.9% 1.9% 1.9% Organization type Investment Management Firm Investment Bank, Commercial Bank, Brokerage Firm Other Consulting, Accounting, Law Firm Insurance any Endowment, Foundation, Other ot-for-profit Family Office Government Agency/Department 37.0% 22.0% 12.0% 11.0% 11.0% 3.0% 2.0% 1.0% 5

7 FIACIAL COMPESATIO Types of compensation in addition to base salary Cash/Bonus Performance Employer 401(k) Contributions Profit Sharing Restricted Stock Awards/Phantom Shares Commission/A Sales Bonus Deferred/Multi-Year Earnings Stock Options 89.0% 82.0% 34.0% 21.0% 11.0% 6.0% 3.0% Overall firm performance and discretionary were the top two determinants of bonus Expected change in total compensation 55% Increase 0 10% Decline 6.0% Stay the same 17.0% Increase 10 20% 18.0% Increase > 20% 4.0% Average ideal compensation structure for selected occupations Occupation Portfolio Manager (equities) Chief Investment Officer Consultant Buy-side Research Analyst (equity) Bank/Trust/Private Client Portfolio Manager Buy-side Research Analyst (fixed income) Portfolio Manager (fixed income) Financial Advisor/Broker Manager of Managers Financial Analyst (corporate) Base Cash bonus Long term Other 53.0% / 31.2% / 9.4% / 6.4% 65.0% / 26.1% / 5.7% / 3.1% 70.1% / 23.1% / 5.2% / 1.6% 52.5% / 35.7% / 10.9% / 0.9% 69.5% / 24.5% / 5.3% / 0.7% 65.8% / 29.2% / 5.0% / 0.0% 70.0% / 25.0% / 3.3% / 1.7% 51.9% / 43.1% / 5.0% / 0.0% 75.0% / 17.1% / 5.7% / 2.1% 69.3% / 19.3% / 10.0% / 1.4% 6

8 FIACIAL COMPESATIO Median and 75 th percentile total compensation by occupation Base Bonus Other Total Portfolio Manager (equities) 149, , , , th Percentile 183, ,000 80, ,875 Chief Investment Officer 238, , , , th Percentile 300, ,550 21, ,500 Consultant 115, , , , th Percentile 144,025 55,000 14, ,500 Buy-side Research Analyst (equity) 110, , , , th Percentile 155, ,515 50, ,270 Bank/Trust/Private Client Portfolio Manager 153, , , , th Percentile 180,750 60,000 35, ,000 Buy-side Research Analyst (fixed income) 135, , , , th Percentile 147,000 66,250 16, ,750 Portfolio Manager (fixed income) 137, , , , th Percentile 170,000 49,000 11, ,825 ensation satisfaction vs. likelihood of looking for new job Individuals who do not feel they are fairly compensated report they are more likely to look for a new job than their counterparts who believe they are fairly compensated. Fairly compensated ot fairly compensated 12.0% 33.3% 36.0% 50.3% 32.0% 11.3% 20.0% 5.0% Very Likely Likely Unlikely Very Unlikely 7

9 FIACIAL COMPESATIO Reported median compensation for those with less than 5 years of experience for selected occupations Base Bonus Other Total Buy-side Research Analyst (equity) 65, , , ,500 5 Buy-side Research Analyst (fixed income) 87, , , ,000 5 Median total compensation for those with less than 5 years of experience is $95,500 Median total compensation for those with 5 to less than 10 years of experience is $125,500 Reported median compensation for those with 5 to less than 10 years of experience for selected occupations Base Bonus Other Total Consultant 78, , , ,395 8 Buy-side Research Analyst (equity) 140, , ,000 5 Portfolio Manager (equities) 93, , ,

10 FIACIAL COMPESATIO Reported median compensation for those with 10 to less than 20 years of experience for selected occupations Base Bonus Other Total Portfolio Manager (equities) 170, , , , Bank/Trust/Private Client Portfolio Manager 140, , , , Chief Investment Officer 210, , , ,250 8 Consultant 144, , , ,000 7 Portfolio Manager (fixed income) 137, , ,044 6 Buy-side Research Analyst (equity) 155, , , ,270 5 Median total compensation for those with 10 to less than 20 years of experience is $216,500 Median total compensation for those with more than 20 years of experience is $284,748 Reported median compensation for those with more than 20 years of experience for selected occupations Base Bonus Other Total Chief Investment Officer 257, , , , Portfolio Manager (equities) 150, , , , ote: Cells in gray reflect fewer than five responses. 9

11 SURVEY METHODOLOGY Survey methodology Method An online survey was deployed to known financial professionals in the regions represented by CFA Society Kansas City and CFA Society St. Louis. subscribers and LinkedIn group members were specifically targeted. The survey was not limited to just these audiences. In addition, this survey was structured so all data gathered was anonymous, with no identifiable information requested. Respondents Respondents were financial and investment professionals, and totaled 216 unique and completed responses. Timing The survey was active from April 18 May 13, Assumptions The findings from this survey were derived from self-reported data. Because the survey uses sampling methodology and broadly defined positions, survey findings are not necessarily representative of the total population; rather, the survey is designed to provide general information about pay levels within the industry. Earning any degree or professional designation is no guarantee of employment or compensation. 10

12 ABOUT THE CFA SOCIETIES About CFA Society Kansas City and CFA Society St. Louis The CFA Societies of Kansas City and St. Louis are the premier professional organizations for investment professionals to connect with Chartered Financial Analysts throughout the region. Each Society strives to serve its broad membership through relevant educational programs, membership support services and opportunities for advancement such as networking events, discounts on educational materials, and more. Both CFA Society Kansas City and CFA Society St. Louis: Promote ethical and professional standards within the investment industry, Encourage professional development through the CFA Program and continuing education, Facilitate the exchange of information and opinions among people within the local investment community and beyond, and; Work to further the public's understanding of the CFA designation and investment industry. If you are interested in learning more about earning your charter, or about the CFA Society in your area, please click on any of the images below. Follow CFA Society Kansas City at: Follow CFA Society St. Louis at: 11

2016 FINANCIAL COMPENSATION SURVEY FINDINGS AND RESULTS. November 2016

2016 FINANCIAL COMPENSATION SURVEY FINDINGS AND RESULTS. November 2016 2016 FIACIAL COMPESATIO SURVEY FIDIGS AD RESULTS ovember 2016 LETTER FROM SOCIETY LEADERSHIP Dear Colleagues, As a premier professional organization for investment professionals, CFA Society Indianapolis