Winning Teams or Winning Pay? The Impact of Team Allocation on Fund Manager Compensation and Careers

Lu Han, Galit Ben Naim, and Stanislav Sokolinski

♦ We examine how team allocation shapes mutual fund managers’ compensation as well as their future productivity and careers. Assignment to a high-quality team lowers immediate compensation but accelerates career development-sharpening investment skill, boosting media visibility, deepening industry and style specialization, and raising future revenue. Team quality also raises promotion odds and explains the steep, tenure-based earnings profile common in asset management. Team allocation therefore acts as a career-steering mechanism embedded in fund-family compensation contracts.

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