There is no pay for performance. By performance I mean ability to garner superior returns on investments. In fact investing performance is not measured. Star performers don't have to be paid as much as their peers and getting a job if you leave AB is difficult without a track record. It pays to keep your own track record. Pay is based more on "check box" activities; things like the number of investments in a portfolio, being outspoken, displaying thought leadership on trends in a sector, and of course strong political skills. There's no significant bonus upside but plenty of downside as evidenced by 08 and 09 bonuses and layoffs.
Analysts are not the same as DOR/CIOs. It's pitched that you can retain your career track in an analyst role. But that is not true. Analysts were largely fired during this downturn. Not senior managers. Especially not poor performing managers. If you are going to join the company; join as a senior person. Not an analyst. You are expendable.
Research skills, contrary to the marketing angle, are not that important. It's a pretty shrewd strategy. Hire people with significant work experience, who are thrilled to move from a mundane industry they've been working in for years to a sexy 'Wall Street" job. Pay on average is quite low compared to shops that hire people who have a better sense of comps in this field. This is why marketing of the analysts generally focuses on years of work experience (rather than years of investing experience) and lofty educational backgrounds (M.D., Ph.D. etc) and lofty corporate brands (P&G, GE, McKinsey, etc.). White papers and black papers are produced that look slick and take on important topics. But ultimately the company doesn't want to pay top dollar for top investing talent. It would rather spend that money on managers above a certain level and in the area where the real talent is, the marketing to clients.
"Managers" don't have management skills. No one is ever promoted or rewarded for building strong teams or providing consistent and timely feedback and helping employees grow. It is up to the employee to figure out what is expected, how to get there, and to ask for all feedback bar mid-year and end-year reviews. There is of course no upward feedback although I believe they are instituting something. There are exceptions but AB consistently has the worst managers I've seen. Promotions of people to the DOR/CIO management role include some of the worst investment picking analysts. How the promotions occurred is still a mystery to many and created bad blood that exists to this day.
It is an overly arrogant culture in terms of brain power. People are very smart but they discount the smarts at other shops and in colleagues. The excuses generally revolve around how other shops don't have industry expertise and industry backgrounds and that AB is more rigorously analytical and fact-based. In some cases that is true but in many cases it is not. Because investment picking performance is not explicitly done or rewarded it's easy to argue away issues. The debacle with the overweight in financials during the economic crisis wasn't a position that was agreed upon by everyone. In fact it was the marketing group who consistently would raise objections and volley questions about analyst convictions on these holdings. In the end they were correct but the response to 'marketing' people questioning investment holdings was treated with derision by the research group.
