Eisler Capital, a $4 billion hedge fund founded by former Goldman Sachs partner Edward Eisler, is continuing its policy requiring traders to repay their cash bonuses in full if they leave the firm within a year, according to sources familiar with the matter. This policy, initially implemented in 2023 amidst intense competition for talent in the hedge fund industry, applies to discretionary pay for 2024.
Edward Eisler, founder of Eisler Capital
Last year, Eisler Capital defended the practice, stating that their compensation structure aims to attract and retain top talent while safeguarding investors’ long-term interests. A spokesperson for the firm emphasized the importance of aligning employee incentives with investor goals. While the firm declined to comment on the continuation of the policy for 2024, the decision underscores Eisler Capital’s commitment to this compensation philosophy.
This bonus clawback policy reflects a broader trend in the financial industry, where firms grapple with retaining key personnel in a competitive market. Top hedge fund performers often command multi-million dollar bonuses, and the period between March and June typically sees a flurry of job transitions. Traders often receive their bonuses for the previous year’s performance around February, making it a common time for them to resign and pursue new opportunities.
Eisler Capital faced significant leadership changes in 2024, with several executives departing as the firm transitioned from its macro trading origins to a multi-strategy approach. The firm reported a 3% return in 2024, trailing many established competitors. Carey Nemeth rejoined Eisler Capital late last year, replacing Arun Dhar as partner and US chief in New York. This leadership transition and the firm’s performance may have influenced the decision to maintain the bonus clawback policy.
The policy requires portfolio managers to agree to the repayment terms for 2024 bonuses. This reinforces Eisler Capital’s focus on long-term stability and alignment of interests between employees and investors. It also highlights the challenges faced by hedge funds in balancing talent acquisition and retention with investor expectations in a volatile market environment.
In conclusion, Eisler Capital’s decision to extend its bonus clawback policy into 2024 signifies a continued emphasis on aligning employee incentives with investor returns. This move reflects broader industry trends and the firm’s internal evolution. While the long-term impact remains to be seen, the policy underscores Eisler Capital’s commitment to its compensation philosophy amidst a competitive landscape for talent.
