With performance under par, hedge fund managers got smaller year-end bonuses for 2011, according to the Hedge Fund Compensation Report, released Tuesday.

The average cash compensation in 2011 was $311,000, up only slightly from 2010 and supported by a larger increase in base pay, according to the report, based on data collected from hundreds of hedge fund managers and employees. Hedge Fund Compensation Report did not break out figures for average base salaries and bonues, but there have been reports of Wall Street bonuses declining by 30% to 40%.

In 2011, only 16% of hedge fund managers said they delivered double-digit returns, down from 45% in 2010. Another 22% said they expect their fund to decline 10% or less, up from 3% who expected these declines the year before.

“Given the drop in fund performance this year, hedge fund professionals fared pretty well,” said David Kochanek, publisher of HedgeFundCompensationReport.com. “Except for only a few positions in the firm, increases in base pay more than covered the lower bonuses.”

With performance waning, compensation declining and redemptions on the rise, some hedge fund professionals think they see the writing on the wall for upcoming layoffs. While roughly one in four hedge funds is looking for research analysts, virtually no other hiring is going on in the industry.

In the face of the belt-tightening going on in the industry, 44% of the hedge fund executives polled said they are happy with their compensation packages.

“We’ve seen this before,” Kochanek continued. “When the investment job market tightens, professionals report more satisfaction with their pay. Their focus changes from greener pastures and moves to becoming content with where they are.

“And, among hedge fund employees,” he continued, “there might be good cause for celebration—that is, celebrating that they don’t work for one of the big banks.”

Hedge funds that participated in the survey included: Bank of America Merrill Lynch, Barclays, Citi, Deutsche Bank, HSBC, JP Morgan Chase & Co., RBC, UBP Asset Management, UBS and Wells Fargo Alternative Strategies.

Lee Barney writes for Money Management Executive.