Morgan Stanley (NYSE:MS)'s Single Family Office Advisory group, in collaboration with Botoff Consulting, released its third bi-annual compensation report on Wednesday. The report, which surveyed over 400 single family offices, revealed that salary increases in these offices continue to outpace the broader U.S. market.
The survey findings indicate that more than half of family offices are experiencing recruitment challenges, especially in accounting, tax, investment, and support roles. Over 90% of the firms reported giving their employees salary increases in the past year, with incentives such as bonuses remaining strong for 82% of the staff.
The report also highlighted that women hold nearly one-third of executive roles in family offices, surpassing U.S. corporate data for female leadership roles. Long-Term Incentive (LTI) compensation plans are increasingly being used by family offices, with 59% of all respondents reporting their use. This figure rises to 72% for firms with assets under management (AUM) over $1 billion.
“Employers across nearly any industry today can see that the talent and compensation landscape is rapidly evolving. Our research amplifies the importance of having data that breaks down trends through a lens specific to family offices,” said Valerie Wong Fountain, Head of Family Office Resources Partner and Platform Management at Morgan Stanley.
While most geographic premiums align with historical trends, some traditional “high-cost” markets have seen a downward shift. Conversely, states like Florida, Nevada, and Wyoming have experienced an increase in competition for talent and compensation premiums due to the relocation or establishment of family offices.
The survey showed that 94 percent of staff had received or would receive an annual salary increase in 2023. This outpaces the general U.S. market trend with many single-family offices planning salary increases of five percent or more.
Morgan Stanley, a prominent player in the Capital Markets industry, has shown a declining trend in earnings per share and is quickly burning through cash, according to InvestingPro Tips. Despite these challenges, the company has managed to maintain dividend payments for 31 consecutive years and has raised its dividend for 9 consecutive years. The company's market cap stands at 141.78B USD and has a P/E ratio of 14.18, as per InvestingPro data.
The report further discusses key drivers of compensation and factors family offices should consider when benchmarking data, including geography, competing industries, performance, firm characteristics, and the position itself.
The findings provide a reference for family offices facing staffing decisions in a competitive talent landscape. With access to benchmarking data, family offices can make informed decisions and develop compensation strategies to recruit and retain skilled talent.
Trish Botoff, Founder and Managing Principal of Botoff Consulting expressed gratitude for the participation in the survey, stating that their focus remains on expanding the depth and effectiveness of compensation data to empower principals and teams to assess compensation, align goals, and make informed decisions to reward, retain, and motivate family office talent.
Family offices are becoming more professional, strategic, and proactive in addressing family needs. To meet the demand for more advanced platforms and systems, family offices are recruiting from a steadily widening pool of talent. As such, competitive compensation packages are necessary to attract and retain top-tier employees. For further insights and tips on Morgan Stanley, readers are encouraged to visit InvestingPro.
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