Only 26% of financial services companies plan to increase hiring in next six months and nearly half plan to reduce bonuses
But majority surveyed still believe U.S. economy will improve during same time period
NEW YORK, October 29, 2009 - In a survey of financial services CFOs and senior comptrollers conducted by Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd, only 26 percent say their company will increase hiring in the next six months and nearly half (49%) plan to reduce bonuses. At the same time, nearly half (46%) believe the U.S. economy will improve during the same time period, making financial services CFOs on par with their national counterparts.
Slightly more than one-quarter (27%) are reducing health care benefits and nearly one-third (31%) are reducing 401(k) matches. However, 13 percent of financial services CFOs report that their company is increasing bonuses - 6 points higher than the national number. Another 11 percent plan to increase stock options and other forms of equity-based compensation - 5 points higher than the national number. In terms of pricing pressure, they are most concerned about the cost of employee benefits (79%), such as health care and pension costs.
"Although many financial services companies are proceeding with caution, they are certainly more optimistic than in recent months," says Jack Katz, national managing partner of Grant Thornton's Financial Services practice. "Executive compensation will remain a hot-button issue, but for well-positioned firms like the 13 percent who said they were increasing bonuses, attracting and retaining key talent is vital to recovery and growth in this industry. We're seeing a renewed focus on risk assessment, especially in the area of executive pay, and that will help instill confidence in regulators and investors."
|
Over the next six months, do you expect the U.S. economy to: |
||
|
|
Financial Services |
National |
|
Improve |
46% |
49% |
|
Remain the same |
43% |
41% |
|
Get worse |
11% |
10% |
| Over the next six months, do you expect your company's financial prospects to: | ||
|
Financial Services |
National |
|
|
Improve |
49% |
45% |
|
Remain the same |
40% |
43% |
|
Get worse |
11% |
13% |
|
Over the next six months, do you expect prices or fees charged by your company to: |
||
|
Financial Services |
National |
|
|
Increase |
25% |
22% |
|
Remain the same |
70% |
67% |
|
Decrease |
5% |
11% |
|
Over the next six months, do you expect your headcount to: |
||
|
Financial Services |
National |
|
|
Increase |
26% |
24% |
|
Remain the same |
60% |
54% |
|
Decrease |
15% |
22% |
|
When do you believe the U.S. economy will come out of the recession? |
||
|
|
Financial Services |
National |
|
By the end of 2009 |
19% |
15% |
|
First half of 2010 |
27% |
27% |
|
Second half of 2010 |
32% |
35% |
|
2011 |
14% |
17% |
|
Later |
8% |
7% |
|
About which type(s) of pricing pressure are you most concerned? (Check all that apply.) |
||
|
|
Financial Services |
National |
|
Employee benefits (e.g., health care, pensions) |
79% |
77% |
|
Energy |
25% |
30% |
|
Insurance |
37% |
31% |
|
Raw materials (e.g., food, metals) |
14% |
30% |
|
Other |
17% |
14% |
|
Is your company reducing average costs per employee in any of these employee benefit and compensation areas? (Check as many that apply.) |
||||
|
|
Financial Services |
National |
||
|
|
Increasing |
Reducing |
Increasing |
Reducing |
|
401(k) match |
7% |
31% |
3% |
26% |
|
Bonuses |
13% |
49% |
7% |
55% |
|
Disability benefits |
2% |
10% |
3% |
10% |
|
Health care benefits |
6% |
27% |
7% |
33% |
|
Life insurance benefits |
3% |
10% |
2% |
11% |
|
Salary raises |
3% |
38% |
9% |
42% |
|
Stock options and other forms of equity-based compensation |
11% |
38% |
6% |
34% |
* Percentages may not total 100 due to rounding.
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About the Survey
Grant Thornton LLP conducted the biannual national survey from Sept. 21 through Oct. 2, 2009, with 846 CFOs and senior comptrollers from public and private companies, of which 63 were from financial services companies.
About Grant Thornton LLP
The people in the independent firms of Grant Thornton International Ltd provide personalized attention and the highest quality service to public and private clients in more than 100 countries. Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd, one of the six global audit, tax and advisory organizations. Grant Thornton International Ltd and its member firms are not a worldwide partnership, as each member firm is a separate and distinct legal entity.
In the U.S., visit Grant Thornton LLP at www.GrantThornton.com.