Morgan Stanley and Botoff Consulting released their biennial single-family office compensation report in July 2025, drawing on 433 U.S. firms and 2,208 incumbent compensation records covering single-family offices, family investment firms, and private trust companies with over $750 billion in combined assets. The number that moved the market was the CIO band. At family offices managing $1 billion or more, the chief investment officer base salary now runs $700,000 to $1.5 million, with total compensation including bonus, carried interest, and long-term incentive plan grants reaching $2.5 million or more in cash-equivalent terms. The Talent Gurus 2026 benchmark, calibrated from the same dataset and refreshed for the current cycle, prices the CIO 90th percentile base at $1.148 million for the $300 million to $1 billion AUM band alone. The figure that practitioners on the recruitment side find more interesting is the structural one. For the first time since Botoff began tracking long-term incentive plan composition in 2015, co-investment opportunity at 57 percent overtook deferred incentive compensation at 56 percent as the most prevalent LTI plan type. That single sentence captures how single-family offices are recompiling themselves to compete with private equity and hedge funds for the same investment talent.
The context behind the pay escalation is the great wealth transfer. Cerulli Associates projects $84 trillion of wealth moving from baby boomers to younger generations and charities through 2045, with single-family offices positioned as the primary structural vehicle for the multi-hundred-million and billion-dollar segments. The growth in office count tracks the inflows. FINTRX’s Q1 2026 family office report identified 119 newly registered single-family offices in the United States in the first quarter alone, a continuation of the formation pace that pushed the global single-family office count above 8,000 by year-end 2025. Every new office competes for the same finite pool of CIO-caliber investors and pulls the compensation ceiling higher.
Key Takeaways for Family Office Leaders
- The Morgan Stanley + Botoff Consulting 2025 SFO compensation report drew on 433 U.S. firms and 2,208 incumbents with $750 billion combined AUM
- CIO base at $1B+ offices runs $700K to $1.5M, with total comp reaching $2.5M+ when bonus, carried interest, and LTI plans are layered in
- Co-investment opportunity at 57 percent overtook deferred incentive compensation at 56 percent as the most prevalent LTI plan type for the first time since 2015
- Carried interest now appears at 20-25 percent of $500M-$1B offices, 35-40 percent of $1B-$5B offices, and 45-50 percent of $5B+ offices
- The CIO and Chief of Staff levels remain the tightest segments of the family office talent market, with PE firms and hedge funds competing for the same candidates
What Do Family Office CIO Pay Bands Actually Look Like in 2026?
The Botoff dataset, refreshed through the Talent Gurus 2026 calibration, shows the CIO compensation curve flattening at the top but steepening through the middle. For offices managing $300 million to $1 billion in assets, the CIO base salary 25th percentile is $400,000, the median is $575,000, the 75th percentile is $850,000, and the 90th percentile reaches $1.148 million. At the next tier up, $1 billion to $5 billion in AUM, base alone migrates into the $700,000 to $1.5 million range and bonus structures move from the 25-35 percent of base typical at sub-$1B offices into the 35-50 percent range. At $5 billion and above, the bonus opportunity averages 75 to 111 percent of base, and total cash-equivalent compensation routinely crosses $3 million when carried interest and co-investment realizations are included.
The carried interest data is the most telling because it benchmarks the family office against the private equity comparator most directly. Botoff’s analysis found carried interest appearing at 20 to 25 percent of offices in the $500 million to $1 billion AUM band, rising to 35 to 40 percent at $1 billion to $5 billion, and 45 to 50 percent at $5 billion and above. The structural point is that single-family offices in the largest AUM segments are no longer differentiating themselves from PE shops on lifestyle alone. They are offering carried participation on direct investments, co-investment rights at principal terms, and increasingly are layering deferred cash incentives on top. The recruiting line that PE shops used through 2015, that family offices could not pay the back-end economics, has stopped working at the upper tier.
The non-CIO seats have also moved. Botoff’s 2025 dataset shows median chief operating officer compensation at large SFOs reaching $900,000 in cash terms, general counsel at $750,000 to $1.1 million, and head of direct investments often surpassing the CIO when realized carried interest is included. The talent pyramid below the C-suite, especially senior investment analysts and directors of private investments, has compressed less but is the segment where the office’s ability to retain mid-career talent over a five-year horizon increasingly determines whether the direct-investment program survives the next economic cycle.
Why Has Co-Investment Overtaken Deferred Cash as the Dominant LTI Plan?
The 57 percent co-investment versus 56 percent deferred incentive flip is the structural finding the industry has spent the back half of 2025 absorbing. The Botoff team framed the shift as an alignment story: family principals increasingly prefer that the investment team have skin in the game on the same deals at the same terms, rather than tracking a synthetic deferred compensation pool that pays in cash without exposure to outcomes. The InvestmentNews coverage of the report noted that co-investment programs deliver a tax-efficient wealth-building mechanism for senior executives, since the appreciation is taxed at long-term capital gains rates rather than as ordinary compensation income, which makes the program cheaper in tax-equivalent terms for the office than the deferred cash equivalent.
The structural implications run through the entire LTI architecture. Sixty-two percent of investment-focused SFOs now report using at least one long-term incentive vehicle, with the largest tier of offices typically running two or three plans in parallel: a deferred cash component for liquidity smoothing, a co-investment program for direct deal alignment, and increasingly a phantom carry plan that grants the executive a synthetic interest in the office’s commingled investment vehicles without a true partnership interest. The phantom carry structure has gained traction at offices that want the alignment economics of true carry without the legal and tax complexity of partner-style structures.
CNBC’s August 2025 coverage of the talent war attributed the shift to the comparison set. PE firms have long offered carried interest as the default backbone of senior compensation. As single-family offices have moved further into direct investing, with FINTRX measuring a 5-to-1 tilt toward direct deals over fund commitments at investment-focused SFOs in the Q1 2026 direct investing report we covered, the comp packages have had to mirror PE structures to win the recruitment competition. The deferred cash plan, while still common, increasingly reads to candidates as a legacy structure rather than a frontier offer.
How Tight Is the CIO Recruitment Market and What About the Family-Member Reporting Line?
The Botoff and Morgan Stanley report flagged the CIO and Chief of Staff positions as the tightest segments of the talent market, a pattern that has held since 2023 and accelerated through 2025. The recruitment difficulty is not primarily about cash. It is about the bundle of factors that includes governance clarity, principal-team chemistry, and the ability to execute direct deals without committee constraints that institutional candidates from PE firms or endowments find frustrating. The report found that 53 percent of investment-focused SFO chief executive officers are family members, versus 27 percent across the broader SFO universe. The implication for non-family CIO candidates is that the reporting line frequently runs to a family-member CEO who may or may not have direct investing experience, which the candidate must assess as part of the offer.
Operating costs at investment-focused offices remained tight despite the comp escalation. Eighty-nine percent of investment-focused firms reported total operating costs of 1.9 percent of AUM or less, with 53 percent operating at 1.0 percent or less. Compensation cost as a percentage of AUM came in below 0.5 percent at 55 percent of firms in the dataset. The figures suggest that even as individual seat compensation has risen, the total comp pool per dollar of AUM has stayed disciplined, in part because the largest offices have been adding AUM faster than they have been adding headcount.
The recruitment funnel that emerged through 2025 also shifted in composition. The Maple Drive Partners 2026 outlook on family office talent observed that the share of new senior hires coming from private equity firms has overtaken the share coming from hedge funds and the share coming from endowment-and-foundation backgrounds, marking the first year that PE has been the largest pipeline. The structural read is that the direct-investing reorientation at family offices has matched the skill set of mid-career PE professionals more cleanly than the public-markets or asset-allocation skill set of hedge fund or endowment alumni.
The Cross-Office Implications
For multi-family offices, the single-family office comp data sets the upper benchmark for senior advisor compensation, since MFO clients increasingly compare their advisor’s compensation structure to what they could pay for a captive CIO at their own scale. The reset has had pricing implications for MFO fee schedules and for the structuring of partner-level comp at the largest MFO platforms, where the carry-on-direct-deals format has migrated from SFOs into the MFO model over the last two years. The structural pattern aligns with the broader consolidation theme covered in private equity now 90 percent of RIA deals, where PE-style economic structures have been migrating into wealth management at every adjacent layer.
For the families themselves, the Morgan Stanley and Botoff report is most useful as a benchmark for whether their own office is paying competitively at each seat. The report’s biennial cadence and the Botoff team’s quarterly updates between formal reports give the industry a steady reference point. The next formal Morgan Stanley plus Botoff report is expected in mid-2027, by which time the question is whether co-investment will have crossed 60 percent of LTI usage and whether the CIO base ceiling will have crossed $1.5 million as the modal figure at $1B+ offices rather than as the upper edge.
Questions for the Next Family Council Meeting
- Are our current CIO and head-of-direct-investments compensation packages priced at the median, the 75th percentile, or the 90th percentile of the Botoff 2025 dataset for our AUM tier?
- If our long-term incentive plan is still 100 percent deferred cash, what is the case for layering a co-investment program on top before the next senior hiring cycle?
- Given the 5-to-1 direct-investing tilt at investment-focused SFOs measured by FINTRX, does our office’s compensation structure reward direct-deal sourcing distinctly from fund manager selection, and if not, should it?
About Me
Associate Editor of financial news at Market signals where he writes and edits original analysis in and around the wealth management, as well as other parts of the financial markets and economy. He has more than five years of experience editing, proofreading, and fact-checking content on current financial events and politics.
