Diverse candidates are being wooed with multimillion-dollar job offers as top money managers make eye-popping counteroffers to land them

• To win the fight for diverse talent, money managers are offering bigger pay packages.
• Some firms are making counteroffers that are 15% to 20% higher than initial offers to woo candidates.
• But experts say the scramble to hire diverse talent won’t solve the industry’s diversity problems.

Wall Street recruiters have never seen money managers hustle so hard to attract diverse talent, with bidding wars erupting over top candidates and pay packages hitting the seven-figure mark. Headhunters say the frenzy isn’t letting up — and it’s even resulted in some burned bridges.

“I had a candidate who was supposed to start a job on a Monday,” one recruiter, who spoke under the condition of anonymity, told Insider. The candidate, who worked in an investment role, called the recruiter the Sunday night before and said, “‘I’ve decided to take a better offer,'” according to the recruiter.

“That was really bad, but we got through it,” the recruiter said. “They were chasing the dollars and wanted to see how much they were worth.”

Asset management professionals are in high demand in general, and the race to hire diverse candidates in particular is heating up. Asset managers are offering more competitive pay packages, making counter offers that boost diverse candidates’ total compensation by around 15 percent, in some instances — and sometimes even higher, recruiters told Insider.

That’s happening as firms face significant pressure to reckon with the historically bleak numbers of racial and ethnic minorities in finance, particularly at the senior level. The murder of George Floyd by police last summer sparked highly public conversations about racial disparities, including on Wall Street.

Asset management and investment bank CEOs subsequently pledged to do more to address racial inequality in the US and improve the dismally low numbers of Black and Latinx employees at their firms, especially at senior levels.

BlackRock, for instance, has said it will conduct an independent racial equity audit, according to a Bloomberg report. This followed an announcement from CEO Larry Fink last summer that the firm plans to double its representation of Black senior leaders and increase overall representation by 30% by 2024.

Sasha Jensen, founder and CEO of Jensen Partners, told Insider in an email that over the last two quarters, her recruiting firm has “regularly observed bidding wars for asset management professionals from underrepresented groups.”

Jensen recently placed a candidate in a global head of credit and chief operating officer role in Europe, where the person received a $1.5 million pay package. Another candidate took a private credit portfolio manager role at an aviation fund for a $2 million package, including cash compensation and carried interest.

Jensen also placed an entire global distribution team — all women and people of color — at a private equity and credit fund, where each received more than $1 million in compensation, a spokesperson for Jensen Partners confirmed.

Those pay packages reflect an increase in total compensation for diverse professionals that Jensen has seen lately. “In the current market, asset managers have been offering counteroffers that are 15 percent, sometimes 20 percent, higher than initial offers to secure diverse talent,” she said.

While the war for talent is fierce across asset management, Jensen said she is mostly seeing counter offers just for diverse candidates. These pay packages can boost pay as high as 20 percent or 30 percent.

Front office sales staff at the principal or managing director level may see a bump up from the $700,000 to $900,000 total annual compensation range to offers reaching a range of $900,000 to $1.2 million, Jensen said.

A more junior-level professional, such as a research analyst with five years experience and an annual base salary range of $125,000 to $150,000, could get a 10 percent to 15 percent boost in pay, according to Jim Cooper, managing partner and founder of Concentriq, an executive search and management consulting firm specializing in the asset management and fintech sectors.

“In some cases, asset managers are willing to go above the targeted compensation range to attract diverse talent,” in both sales and investment roles, Cooper said in an interview. “I think that’s more so for the base salary for most of these roles.”

Cooper has seen a preference for diverse candidates in nearly every search his firm has taken on, with women and minority professionals being hired in around seven out of 10 placements, he added.

“It’s the same thing, whether for a chief investment officer, ESG analyst, and regardless of firm size,” Cooper said. “In virtually every search engagement, a preference for a diverse candidate is explicitly stated.”

More than the money

The recruiter who spoke on condition of anonymity said that one thing has trumped money for candidates weighing offers: corporate culture, a factor this person says has become even more important in light of the Covid-19 pandemic.

“People have come to value the culture of the place they will be at,” the recruiter said. “They’re asking, ‘Is this going to be a place where I’m going to want to work and I’m going to want to be?’ ‘What’s the environment like?’ That’s going to be as important, or more important, than the almighty dollar.”

James Cherubim, head of talent acquisition at The Carlyle Group, said in an email that the hiring market is “as hot as ever” — and candidates have become “quite discerning in their job search.”

Deborah Mirabal, a vice president in fund management at Carlyle who joined in April, said in an email that as a woman and a Latina professional in the industry, it was important for her to “join a place where I felt that I was being valued for my skill sets and for what I could bring to the table, and not just as a checkbox.”

Carlyle joins a number of companies across industries that have begun tying a portion of their CEO and other executives’ pay to diversity, equity and inclusion goals, Insider reported in May. Starbucks, Nike and McDonald’s have also implemented similar incentives this year, according to the Wall Street Journal.

‘People don’t want to hear any more excuses’

Alan Johnson, managing director and compensation consultant at ​Johnson Associates, said that despite the big push from firms to hire more women and people of color, significant progress could be extremely slow — to the frustration of many.

“After 50 years of excuses, many people don’t want to hear any more excuses,” Johnson said.

But he thinks it will take years to see visible change in the industry, particularly at the leadership and senior level at money managers.

“You can’t create mid- to senior-level portfolio managers from scratch,” Johnson said. “It takes 10 to 15 years to get them to that level. And it will take a long time. If you don’t have that many people in your pipeline…unfortunately that’s going to be the reality.”

At the C-suite level, nine out of ten people in US financial services roles are white, a 2020 report by McKinsey & Co. and the W.K. Kellogg Foundation found. The study also showed higher attrition rates for people of color, with more departures from financial services firms happening earlier in these workers’ careers.

If firms can’t attract an influx of young minority professionals to the industry — as well as retain and develop them throughout their careers — the war for talent at the bargaining table won’t do much to improve the diversity picture on Wall Street.

And without a bigger-picture perspective, firms will still be vying for what may be a handful of minority professionals, particularly at senior levels, Johnson said.

Cooper has similarly seen the demand to hire diverse talent outpace the industry’s development of professionals across seniority levels.

“The thirst for diverse talent is as large as it’s been to my recollection. Every asset manager has expressed that as a priority for their new hires,” Cooper said.

Still, “There’s a timing gap where you don’t have a lot of senior, experienced candidates,” he added.