For the third consecutive year, the Grant Thornton Human Capital Services
team (HCS) has collected and aggregated proxy pay data for the financial services industry. Based on proxy filings of SEC registrants, the survey reports on executive compensation data for small to mid-size institutions (total assets of $1 billion to $10 billion) and mid-size to large financial institutions ($7 billion to $20 billion).
The survey presents salary, total cash compensation, total direct compensation, and short- and long-term incentive grant level data for the top named executives and 2nd highest paid thru 5th highest paid. Examining year-over-year trends found modest increases for total direct pay from the previous year, as well as an increased emphasis on performance-based long-term incentives, especially for larger companies. Publically available data reveals a fairly strong link between revenue size and total direct compensation for CEOs.
For the first time, the Grant Thornton HCS team has analyzed trends in board of director compensation including annual retainer compensation, cash compensation, equity compensation and total compensation. Compared to historical information available, organizations are transitioning from meeting fee-based compensation to cash-based retainers encompassing total hours spent opposed to those only on meetings.
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Over the past few years, regulatory agencies and the public have applied immense pressure to the financial services industry regarding perceived excessive levels of executive compensation. However, executive compensation programs should vary based on each institution’s size, strategy and philosophy.
Every SEC registrant should annually review its compensation programs and assess the structure and type of incentive plans it uses. As the survey found, most industries are characterized by increases in "at-risk" compensation, as companies place more compensation at-risk to ensure pay-for-performance linkage. This linkage is critical in emerging and mature public companies, with scrutiny by shareholder advisory groups influencing the voting patterns of the companies' shareholders and institutional investors.
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