As the number of Australian family offices increases, KPMG’s latest report found that local C-suite salaries in these firms tend to fall below their international counterparts.
A “family office” is defined as a corporate structure set up to manage the assets of a single family or multiple families, with the intention of enhancing the “financial and non-financial wellbeing of the original founder’s family”.
It is estimated these families account for 40 per cent of active private capital investors into private equity and credit over the last 12 months.
KPMG’s 2024 Australian Family Office Compensation Benchmark Report found that Australian CEOs reported a salary range of $500,000–$625,000 per annum as their base salary, with 29 per cent of relevant respondents reporting earnings in this bracket.
Notably, no CEO received a base above $1 million.
This places Australians at the lower end of the scale, with only the UK and Europe reporting lower salary ranges of $410,000–$550,000 and $360,000–$480,000, respectively.
Leading the pack, however, was the Americas (described as those firms that pay salaries in US dollar), with their average earnings topping out at almost $1 million per annum, followed by the US with an average high of $780,000, while the Middle East and Asia reported $620,000 and $600,000 as the top of their average brackets, respectively.
When it comes to CEO bonuses, there was a relative amount of uniformity with four out of the seven regions reporting average bonuses of 21–30 per cent of their salary, including Australia, the US, Europe, and Asia.
Beyond the averages, however, there was a considerable variance, with some reporting bonuses as low as 10 per cent, while others saw more than 150 per cent of their salary.
“It is not clear to what extent the background of the CEO influences their bonus arrangements or to what extent the role of ‘CEO merged with CIO’ is also reflected,” the report said.
Meanwhile, the portion of family members who are CEOs has increased, with some 43 per cent falling into this category in Australia, up from 23 per cent last year.
Looking at chief investment officers, the report found that Australian CIOs are typically being paid a base salary of $330,000–$396,000.
Comparatively, all other regions represented in the report had higher salaries, with Australia being the only region to report a salary of less than $410,000. Interestingly, compared to their high CEO salaries, the US reported CIO salaries at the lower end of the scale at $410,000–$510,000.
Both Europe and the Middle East had CIO salaries that peaked at $720,000, 81 per cent higher than the peak in Australia.
The report suggested this disparity may be a result of the lower number of CIO datasets in Australia compared to Europe and the US, as well as the correlation between higher assets under management (AUM) and salaries.
Notably, the average bonus for CIOs was higher across the board, with most seeing an average of 51–60 per cent, but Australia and the UK, however, had ‘highly variable’ bonuses due to some reporting ranges from 11–20 per cent, while others saw bonuses of 91–100 per cent.
More broadly across the offices’ staff, only a quarter were offered long-term incentive plans, which KPMG said would be a potential improvement for future recruitment and talent retention.
