Payout ratios, which have largely been a constant for mature businesses, increased in unprecedented and unsustainable ways.

Building on results of Performance Intelligence, McLagan and Casey Quirk's annual study of asset management company financial performance, this paper highlights the challenges facing asset management firms.

In a year where most firms will struggle to deliver bonuses that resemble the amounts paid at year-end 2006, or even 2007—both of which now feel like a long time ago—it will be tempting for firms to give promotions, in lieu of pay.

2009 will offer many opportunities for firms to emerge leaner, more efficient, and well poised to take advantage of the opportunities that will be available.

The credit crisis of 2007 and 2008 has resulted in severely depressed stock prices for the majority of large financial services firms, leaving their executives and employees holding underwater options...

While 2008 was a profoundly challenging period for the asset management industry, the impact of the stock market chaos in the latter part of the year is only partially recognized in the financials of our benchmark firms.

There has been lots of talk about increasing salaries in financial institutions. This is particularly surprising given that relative performance is, for the most part, declining.

Since the people raising the issue are neither naive nor stupid, there must be a method behind the madness. When you scratch the surface there are some very good reasons...

There is a lot of noise in the market and in the press that seems to suggest that many banks and financial services firms of all types are increasing salaries broadly – a sentiment that is reinforced by those lobbying for such action.