Family offices are escalating efforts to attract and retain top-tier talent, rolling out increasingly structured and generous incentive schemes, a new report reveals.
According to research by Morgan Stanley Private Wealth Management and Botoff Consulting, long-term incentive compensation is now a standard feature across many family offices, particularly those with an investment-heavy focus. Nearly two-thirds of such offices now offer incentive plans that link compensation to performance and returns — a shift from the informal, bonus-driven arrangements of the past.
“There’s a clear trend towards more formalised compensation frameworks,” said Valerie Wong Fountain, Managing Director at Morgan Stanley. “We’ve moved from handshake deals to structured packages tied directly to results.”
In investment-led family offices — which resemble boutique financial firms with specialist teams — executive pay is rising sharply. The median total compensation for CEOs sits at [$825,000], rising to over [$1.2 million] for those at offices managing more than $1 billion. The top end is even more lucrative, with average pay for CEOs at large investment-focused firms exceeding [$3 million].
Chief Investment Officers are also seeing significant gains, with median compensation reaching [$900,000], and average pay around [$1.8 million].
Incentive structures are evolving, too. Co-investment opportunities — where executives invest alongside the family — are gaining traction. These deals offer rare access to high-growth companies and private market opportunities. Most executives fund their own co-investments (85%), although some families offer loans to help facilitate participation.
“It’s a compelling way to align interests,” noted Wong Fountain. “It ensures key staff have skin in the game.”
Other popular incentive mechanisms include carried interest (a share of profits above a set benchmark), phantom equity, profit-sharing, and deferred bonuses.
“In a fiercely competitive hiring market, families are stepping up,” said Trish Botoff, Managing Principal at Botoff Consulting. “They’re looking for highly skilled, mission-aligned professionals to bring their vision to life.”
