Martin Currie had to pay bonuses if it wanted to keep hold of staff

Martin Currie's decision to pay bonuses again this year shouldn't come as a huge surprise.

Not only has it been recruiting throughout 2010, but it's doubtful that it would maintain its low turnover rate if it refused to pay bonuses in the face of rising remuneration across the asset management industry.

Scotland's 'big boutique' fund manager had a good year - profits were up by 25% (excluding the savings from not paying bonuses in 2009) to 14.1m and the firm grew its headcount throughout 2010.

Martin Currie aimed to add 19 people in 2010 (after recruiting 12 in 2009), and has been building its research capabilities, IT and marketing headcount and also poached SWIP's emerging markets team led by Kim Catechis.

The firm froze bonus payments for 2009 in an attempt to stave off (more) redundancies.

Now, however, it's earmarked 28.7m for salaries and bonuses - or an average of 109.9k for each of its 261 employees. This is unlikely to be divided equally, however, as Martin Currie employs just 57 investment professionals.

In today's climate, any mention of a bonus is likely to elicit hisses of disapproval from Joe Public. It's worth mentioning, however, that bonuses in the fund management industry are not being hampered in the same way as investment banks, and have always been more closely aligned to the long-term risk profile of the company.

Not only have bonuses risen by an average of 20% across the industry, but asset management firms come under the 'tier four' category of financial institutions in the FSA's remuneration code, meaning that they're not required to defer or clawback bonus payments or pay a larger proportion in stock.

Most fund managers still are deferring a proportion of bonuses - usually 25% - but this is more in the interest of retaining key staff than regulatory clampdowns on variable remuneration.

Martin Currie says that its 'team-approach' means it doesn't rely too heavily on star fund managers, but it still has to work hard to retain key people. Its investment team has an average tenure of eight years, which is a big selling point to its clients.

Bonuses are partly paid in shares and, as a private company, this means that staff have a stake in the company and a vested interest in sticking around. Even so, if a second year of bonus cancellation was on the cards, turnover would have inevitably increased this year.