global Articles

Country Specific Compensation Regulation

Given the multitude of regulatory agencies that global financial institutions have to deal with, we thought it would be helpful to summarize the latest requirements as we understand them. The table below is designed to give you an update "at a glance". It is not comprehensive and only covers the major economies. We will update this as we become aware of changes.  

What Do They Mean By Unreasonable Risk?

Virtually every regulatory body has come out with some pronouncement or other admonishing financial institutions to curtail compensation programs that “encourage the taking of unreasonable risk.” Two parts of that statement are problematic.

Financial Services Authority: Reforming Remuneration Practices in Financial Services

Regulatory bodies and industry associations across the world have been focused on incentive compensation practices in order to assess their impact on the recent financial crisis and more importantly to identify ways to prevent future problems. On August 11, 2009, the United Kingdom’s Financial Services Authority (FSA) published a policy statement for regulating remuneration policies in the UK. This was preceded on July 13th by a report from the European Commission. The overall objectives of the policy statement and recommendations are to sustain market confidence and promote financial stability. Most regulatory and industry organizations have concluded that by removing incentives that encourage inappropriate risk-taking, there will be greater stability in the financial markets.

Starting Over: The Rebuilding of Executive Pay Structures in Financial Instituations

For a number of reasons—government scrutiny, shareholder backlash, undernourished balance sheets—bank management and boards are hearing the call to reform executive pay. Many are convinced that while pay did not cause the financial meltdown, it certainly exacerbated the problem. This has lead to a genuine interest in transforming executive pay. The devil, of course, is in the details. 

Job Alignment Opportunities

​In the current market environment, there are numerous opportunities for human resources and compensation professionals to continue to add value to their organizations. While a return to more robust revenue levels would obscure a multitude of other problems, lean times force organizations to work smarter and more efficiently, and HR and compensation professionals are uniquely positioned to lead.

Salary Increases: Separating Fact from Speculation

There is a lot of noise in the market and in the press that seems to suggestthat many banks and financial services firms of all types are increasing salaries broadly – a sentiment that is reinforced by those lobbying for such action. The topic is emotionally charged and like most market events, the perception may often create its own reality.

Considering Salary Increases

​There has been a lot of talk about increasing salaries in financial institutions. This is particularly surprising given that relative performance is, for the most part, declining.

Can We Please Stop This Craziness Now? The Case Against Punitive Taxes on Banker’s Pay

It was a big week in Washington—lots of hoopla and press and plenty of opportunity to take pot shots at the “fat cats” on Wall Street. But, it’s a new week and calmer heads must rationally get down to the business of saving our financial system.

Asset Management 2008 Recap: A Look Back At A Profoundly Changing Industry

While 2008 was a profoundly challenging period for the asset management industry, the impact of the stock market chaos in the latter part of the year is only partially recognized in the financials of our benchmark firms. This document summarizes public data collected for twelve asset management firms in a report titled Asset Management — Quarterly Financial Benchmarks.

The Brave New World of Executive Compensation

This is a year like no other in the world of executive compensation.  Everything has turned on its head and the challenges for professionals in the field are staggering.  The bad news is that things will never again be like they were before and we are going to have to get used to it.  The good news is that we have an opportunity to, within very real constraints, reinvent executive compensation practices in this critical industry.

Bonus Plans within Public Pension Funds: Should They Stay or Go?

Taxpayers, beneficiaries and politicians are up in arms about paying bonuses to public fund investment staff during this economic crisis. For some, it is unconscionable to pay bonuses when pension benefits are being cut, other state workers are on salary freezes or work furloughs, and AUM levels have been decimated by the market meltdown.

2009 Compensation Plans: An Early Look

In the 2008 / 2009 bonus process, we have seen significant changes to deferral plans, most notably, substantially more compensation deferred. Employee perception is a mixed bag: with stock prices depressed across the market, this may be a time when employees see more potential upside in performance driven / long-term awards; however, in some cases, employees have seen historic awards lose value, and may be skeptical as to their value proposition.

Troubled Assets Relief Program (TARP)

Since its enactment, the Emergency Economic Stabilization Act of 2008 (EESA) has required that financial institutions participating in the Troubled Assets Relief Program (TARP) accept certain conditions for executive compensation and corporate governance for the period during which Treasury holds an equity stake.

Addressing Underwater Options: Measured Responses to a Contentious Problem

The credit crisis of 2007 and 2008 has resulted in severely depressed stock prices for the majority of large financial services firms, leaving their executives and employees holding underwater options (an employee stock option with an exercise price greater than the fair market value of the underlying company stock). Many executives have lost a significant portion of net worth based on the decline in the value of their holdings.

First Quarter Optimization

After working harder than ever, in the most stressful year-end environment any of us have seen, it would be nice to say that we can coast a bit in the first quarter of 2009. But we can’t – there is still much work to be done.

View From the Top: What Should We Do About Executive Pay?

Boards and senior leaders of financial institutions from around the world are struggling to decide what to do about pay this year-end, and time is running out. After an impressive run of staggering business results and pay to go with it—everything came tumbling down. Now is the time that compensation/remuneration committees must decide how and what to pay top executives this year. While there are few benchmarks to guide these decisions, there are many loud and conflicting voices expressing opinions from the sidelines. Traditional tools like surveys, payout ratios and market trends provide useful intelligence, but there is even more to consider.

Crisis in Asset Management

Building on results of Performance Intelligence, McLagan and Casey Quirk's annual study of asset management company financial performance, this paper highlights the challenges facing asset management firms. 

Stemming the Tide of Title Inflation

While some may look at title inflation as a statistical curiosity, or a “soft” issue, and not a legitimate business concern, we have seen compelling evidence to the contrary. McLagan works with our clients to manage this problem out of their organizations through benchmarking title ratios, defining promotion criteria and improving title processes.

So What Should We Do Now?

​We have spoken to hundreds of firms over the last 60 days and they are all asking—“so what should we do now?” Existing executive compensation programs won’t/aren’t working and executives’ net worth has declined dramatically. There is the very real prospect of zero bonuses, underwater (drowning) options and performance plans that don’t have a prayer of paying out now or in the foreseeable future.

Pay Pressures

As 2008 progresses, and the banking / capital markets business shows limited signs of bouncing back, firms are struggling to think of ways to deliver a reasonable level of compensation. To some degree, this is a problem that is being carried forward from 2007, as many firms did not adjust pay levels downward in a way that corresponded to business results. Payout ratios, which have largely been a constant for mature businesses, increased in unprecedented and unsustainable ways.

Where Are The Villains Now?

In this current crisis, pain is widespread and where there is pain there is a search for villains. As a result, there is likely to be broad and deep investigation into Wall Street’s compensation plans. The outcome of this work could be the most significant shift in the compensation philosophy and plans since firms went public. It is clear that regulatory bodies are taking a hard look at this topic at this very moment.

White Paper: Why Work?

If you won the lottery, would you quit your job? Our latest white paper draws on insight derived from interviews with CEOs at leading financial services firms and academics, to investigate the role pay plays in how and why executives work, especially in the absence of economic needs, and how this can help you retain and engage your top performers across your organization. 

White Paper: The Quiet Corner of Financial Services

Past sales practices within many banks are no longer tenable given the lack of transparency, risks, administrative burden, and confusion most incentive plans have instilled. This white paper explores the complex landscape of retail banking, including the values of the firm and the HR systems that support them. We have provided recommendations for navigating the gaps that exist. 

White Paper: The Modern Approach to Managing Compensation for Strategic Near Shoring Locations

​In recent years financial services firms have increased their focus on deployment of their workforce to strategic near shoring locations to help manage compensation and other expenses. As a result of exponential growth of the near shoring centers and increased competition from industries outside of financial services, firms have been facing new challenges in managing pay for support staff and applying regional differentials appropriately.

Building a Meritocracy

Most firms pride themselves on being meritocracies, yet financial services firms are increasingly struggling to rationalize a pay for performance culture.

Where Human Meets Capital

Where Human Meets Capital explores the evolution of human capital in wealth management. In this week’s article Peter Keuls, McLagan’s Global Head of Wealth Management, explores how technology continues to change the wealth management workforce, and considers how firms can best position themselves for tech-enabled success.

There is More to Frankfurt and Paris than Meets the Eye

Germany’s financial capital, Frankfurt, is the metropolis on the Main River. Frankfurters like to regard themselves as Main-hattan, a slice of Wall Street where upcoming financiers cut their teeth before moving to the killing fields of larger London and New York. We believe that the stage is set for this talent flow to reverse, which merits a little more consideration for your future location strategies.

Missing Tricks From Your Top Bankers? The Latest Appliance of People Science

Missing some tricks from your top bankers and relationship managers? Paying them too much? Evidence suggests you are likely doing both.

Battling for Top Talent in the Insurance Industry

With increasing competition and demand for top talent and best-in-class employees across all functional levels of insurance carriers, talent is a hot topic across the industry. Executive and manager-level calendars are filled with meetings focused on hitting agreed upon goals from 2016. Efforts to attract, engage, and retain new and existing staff are being re-energized. Determining which initiatives will provide the biggest boost is a key. 

Success in Succession Planning

While all eyes have been watching the DOL / fiduciary developments, another risk continues to loom over the industry: the dual trends of a rapidly aging FA force and their aging clients.

 

Displaying results 31-60 (of 138)
 1 2 3 4 5