Stephen Ferszt Publishes Article in HR Daily Advisor on How Successful Hedge Fund HR Teams Revamp Compensation for Non-Equity Employees

Olshan Employee Benefits and Tax & Personal Planning partner Stephen Ferszt authored an article in HR Daily Advisor entitled “How Successful Hedge Fund HR Teams Revamp Compensation for Non-Equity Employees.” In the article, Steve examines the measures hedge fund HR teams are taking to attract and retain non-equity and support staff, such as analysts, associates, compliance officers, IT specialists, custodial staff, data technicians and more. Although these employees are often given structured pay that includes a base salary, performance bonuses, profit-sharing arrangements, discretionary awards, deferred pay and retention bonuses, the design, implementation and administration of compensation and benefits can be better maximized and protected with legal guidance. “Providing employees with modest profit-sharing or shadow equity participation enhances loyalty,” Steve explains. “Shadow equity mirrors the growth value of real equity without conferring actual ownership or voting rights. This enables firms to reward employees based on enterprise value creation without diluting equity owners’ control. Some firms offer revenue-sharing pools or discretionary contributions to employee stock plans or 401(k) accounts as alternatives.” Employee retention is another major concern, as non-equity workers are prone to leaving firms due to factors such as limited career advancement opportunities within the industry and lower compensation. Hedge funds can work to improve their human resources best practices by conducting annual compensation assessments and facilitating cross-disciplinary training so that staff can feel and be more engaged. Hedge funds can also increase retention by prioritizing cultural inclusion. "Leading firms embed inclusivity into incentive structures by recognizing the contributions of departments such as compliance, technology, and administration,” Steve notes. “As regulatory scrutiny increases and the talent market becomes more competitive, hedge funds must treat compensation at all levels as a strategic investment in stability and success.”