Asset Management Bonuses “Out of Control” (Financial Times September 4th 2016)

the link above takes you to the article by today’s Financial Times on the compensation of asset management companies bosses.

Reasons are explained about the professional capacities involved, te mechanisms bringing compensation to the levels we know. It is never explained well enough the fact that the industry we are talking about has never promised to manage risk in the name and to the benefit of its customer, he only risk this relatively young industry is taking care of is about its own profitability and sustainability. For these reasons, comparisons of these companies should be done across sectors, looking with attention to mass market distribution and production companies. Blackrock (and its boss’ pay) should be compared to Procter and Gamble, WalMart and similaria. A large asset management company is nothing other than a large supermarket specialized in a highly commoditized product.

The still existant huge profitability of this sector, surviving very low production efficiency, is most likely due to an important capacity in the management of the competitive environment too (here you have the real value added delivered these bosses).

Up to now the regulator of this sector has not taken care effectively of uncompetitive behavior within the sector, time for some more attention might have come on both sides of the Atlantic.



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