Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Analyst for Craig Siegenthaler – Credit Suisse.
Analyst for Craig Siegenthaler – Credit Suisse
One quick question, given the strong flows and uptick in AUM balances this quarter, can you comment on why you didn’t see much comp margin improvement? Also, can you provide the breakout of fixed versus variable comp?
Robert J. Whelan
In terms of the margin improvement, we did see margin improvement both on a GAAP basis and adjusted operating earnings basis. In terms of compensation, this was the quarter in the year where we look at year end projections and make adjustments to where we think our overall compensation relative to bonus accruals should be. We did that both for Eaton Vance as well as all our subsidiaries and that really explains the increase in compensation, largely the $10 million increase from $67 to $77 million in the quarter.
Thomas E. Faust, Jr.
Just to add to that, in this quarter in particular, if you breakdown comp between variable and fixed including stock-based comp in the fixed portion, the breakdown is roughly 40% variable versus 60% fixed. The 40% variable being operating income based bonuses, sales base incentives and revenue based incentive.
Operator
Your next question comes from Dan Fannon – Jefferies & Company, Inc.
Dan Fannon – Jefferies & Company, Inc.
You mentioned Tom that institutional RP activity is still pretty slow. I wanted to talk about that kind of expressed in the quarter and what you’re seeing this far in to August and really what the commentary is from some of the gate keepers when you talk about consultants and others in terms of how that’s progressing and when you think that actually will pick up?
Thomas E. Faust, Jr.
Dan, I spoke yesterday to [Elisha Jones] who runs our institutional business so I can really relay her color on the market. I think she feels like things are slowing getting back to normal. That at the beginning of the year there was really panic among lots of types of institutional investors as asset values were down, as assumptions about market returns were so far off the market in many areas in 2008 and fundamental questions about asset allocation and also big challenges in many cases to liquidity.
In all of that, in some cases the reaction was we should go out and get a different consultant because it was following their advice that got us where we are today. Relatively long down the list, towards the list of what institutional clients were doing was saying we need to look at our choice of managers in this particular box. So, it’s taken a while and I think my comment is meant to convey that we think it’s still continuing that most institutional investors are still working through that process.
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