Performance-based Compensation

Performance-based Compensation This is a fee that is given to a hedge fund's general partner as a reward for good performance. When the hedge fund increases in value, the general partner will see this bonus increase considerably. In many cases, this compensation is given out when a certain goal is met and this goal is usually predetermined. In some cases, a mutual fund manager might also see some performance-based compensation, but this also usually occurs when a predetermined level has been attained by that manager. This is used as an incentive for these individuals to perform well on these ventures because the chance of a bonus is always there.