Risk USA: Call to link risk manager compensation to performance

The compensation structure for risk managers should be revamped as part of wider changes to risk management processes in light of the credit crunch, delegates at Risk USA in New York were told yesterday.

Ken Akoundi, head of portfolio risk management at New York-based hedge fund Optima Fund Management, lambasted prevailing attitudes among financial engineers in constructing products will little regard for the ultimate economic fallout.

"Civil engineers design buildings to have a safety factor at least three times above specification because otherwise people will die in that building. In financial engineering, the lack of physical limitations has meant product structuring is all about pure profit