Market Rationalization in the Middle East

The banking sector in the Middle East has enjoyed a steady recovery and will post solid results in 2018. The Governor of the Central Bank, Mubarak Rashed Al Mansoori, emphasized that the industry is liquid and strong, with credit growth for the private sector increasing 6.5% during the first 9 months.

To Truly Assess Gender Pay Gaps, Companies Must Dig Below the Surface

In most cases, you can’t begin to fix a problem until you understand why it exists in the first place. This is certainly true for the complex challenge of addressing gender pay equity. It’s time for companies to carefully examine their data and work outside the confines of basic pay comparisons to find and fix specific root causes. Once organizations actually start to dig deeper, we’ve found that the following issues are the most significant drivers of both real and perceived gender pay gaps.

ISS Replaces Financial Metrics in Favor of Economic Value Added in Evaluating Pay for Performance in 2019

ISS' newly released draft policy updates for 2019 would swap GAAP metrics for EVA and adopt a voting standard around board diversity. Glass Lewis’ final policies are extensive in both compensation and corporate governance topics. We explain what the updates entail.

Infographic: Are You Capitalizing on Prime Services Market Growth?

Prime services has been the fastest growing area of global markets since 2013, experiencing a 29% revenue increase between 2013 and 2017. However, our data shows that U.S. firms are the primary beneficiary, capturing market share from European firms—a recurrent theme across most products since the global financial crisis. We explore the numbers in our latest infographic.

A Side-by-Side Look at Talent and Rewards in Financial Services and Technology

Financial services firms are challenged to imagine and operationalize the talent and rewards strategies required to transform their workforces for the digital age. No matter what technology initiatives firms are focused on, adapting longstanding practices to attract and retain technology talent is key. McLagan and Radford have teamed up to help financial services firms navigate this changing landscape.

The Spotlight: Adam Barnett, Partner, Asset Management

Adam Barnett is a Partner in McLagan’s asset management practice, providing performance and reward consulting services to various investment management organizations. Adam’s areas of expertise include designing annual and long-term incentive plans and sales compensation programs, conducting sales and financial performance benchmarking studies, and analyzing competitive compensation practices and levels.

Career Frameworks: Your Most Important HR Tool for the Era of Increased Transparency

The human resources function is stuck between a rock and a hard place. Designing approaches that fit the needs of a multi-generational workforce and an emerging job market adds tremendous pressure to HR strategies. Companies are attracting and retaining talent by using more customization and adaptability in their role profiles and job descriptions. However, having so much customization, and ultimately so many unique job profiles, doesn’t necessarily lend itself to addressing the current industry-wide need for more transparency. And often, the result can be a lack of clarity into what career paths are available within your organization.

Infographic: Five Quick Tips for Tackling Compensation Governance in Today’s Economy

As regulatory changes continue to evolve, it is important to stay diligent and ensure your firm has the right structure and framework in place. Our infographic outlines five tips that can help.

How is Technology Impacting Financial Services?

As financial services firms’ business models continue to evolve, legacy technology will likely be replaced with emerging technologies, resulting in a convergence of the technology and financial services industries. New technology innovation has already done a lot to improve the customer experience, supply data for decision making, and reshape longstanding firm policies and practices. The question is whether financial firms have the talent to support further innovation at the appropriate speed.

The Post-Crisis Evolution of Pay

Ten years ago this month, the financial crisis came to a head with the failure of Lehman Brothers. While there have been too many stories written on the crisis to cite, one thing we can agree on is the shared culpability ranging from individuals over-extending themselves in the housing market, the distribution of bad loans, poor underwriting and mortgage lending standards, packaging of securities by banks, uneducated ratings of these securities by agencies, and greedy and naive investors searching for yield.

The Spotlight: Roopank Chaudhary, Partner, India

Roopank Chaudhary, a partner at Aon, is the Head of India for McLagan and the Head of Regional Insurance for Asia Pacific. Roopank manages key client relationships with various financial institutions. He specializes in supporting clients in developing rewards strategies, structuring and benchmarking, designing and evaluating job descriptions, organization structuring, employee engagement, and HR set-up.

Infographic: A Checklist For Fall Comp Planning

Fall is in the air, which means the start of compensation planning season for most firms. To help your team prepare, we have developed a quick checklist for keeping your pay programs up to date.

SEC Takes A Closer Look at Proxy Advisory Firms

The SEC has signaled that they are actively reviewing how investment advisers use proxy advisory firms’ recommendations. The SEC has set a November 15th date for a roundtable to review requirements for investment advisers. As we highlight in this alert, this may ultimately force investment advisers to rely more on internal analysis; thus, diminishing the role of the duopoly that proxy advisory firms presently enjoy.

What to Consider When Calculating Your CEO Pay Ratio in Year 2

Deciding whether to re-identify your median employee is a key question going into the second year of pay ratio disclosures. We weigh the pros and cons. The primary focus for many companies during the first year of calculating the CEO pay ratio was determining what methodology to use when identifying the median employee—ensuring it was both reasonable, accurate, and consistently applied across all employees.

Realigning the Human Resources Function

It is an exciting time in the HR community, as members no longer need to push to get a seat at the table and are considered significant drivers of change and value. However, we must recognize that where the HR function stands today is, in many cases, the result of multiple years of cost-cutting initiatives. After already achieving a lean state of operation, it is not uncommon to find that HR size and cost has been reduced even further. Yet, just when organizations have tirelessly worked to minimize costs as much as possible, executives have become even more aware of the importance of HR within firms, where talent is a crucial asset.

The Spotlight: Don McNees, Partner, Insurance

Don McNees is a partner at McLagan and leads Ward Benchmarking for life, annuity, health, and retirement. Don works with senior management to enhance growth and improve performance at some of the world’s largest insurers. He advises clients on target operating models, performance benchmarking, and organization effectiveness to achieve their business objectives.

IRS Releases New Guidance Concerning Changes to Section 162(m) of the Internal Revenue Code

One of the more noteworthy provisions within the giant corporate tax bill that passed at the end of 2017 for executive compensation professionals was the elimination of a provision under Section 162(m), which allowed companies to deduct performance-based pay above $1 million. Now, we’re getting more clarification on how that change in tax law will play out in practice.

Five Questions for Banks to Consider When Setting Executive Annual Incentive Plan Goals

With such a substantial percentage of executive pay delivered through incentive programs, it’s no wonder that incentive plan discussions comprise a significant portion of the compensation committee’s agenda for many banks. However, through our experience of serving as advisors in over 300 compensation committee meetings per year, we are surprised by how little dialogue exists around the specific topic of annual incentive plan performance goal selection and goal setting. 

ISS Issues Survey Hinting at 2019 Policy Changes

Institutional Shareholder Services (ISS) took the first step in its yearly policy update process when it recently released its annual corporate governance policy survey to clients. Following the survey period, ISS releases draft policies in the early fall for a two week comment period, followed by final policy updates that typically come in November. Adopted policies are effective in February for the proxy season.
 

Getting Started with Your Compensation Survey Results

Understanding where you stand in the market helps you ensure that employee compensation spend is optimized for your firm. Overpaying relative to performance and the market could lead to increased shareholder pressure and sub-optimal financial results. Underpaying could weaken your firm’s ability to attract, motivate, and retain talent.

Infographic: Forces to Watch for Financial Services Firms Across the Globe

We are in an age of major global transformation for financial services. Technology disruption is happening all around us, forcing traditional establishments to innovate, re-think old tactics, and adapt to the ever-shifting digital world. In this current state of change, there are many new challenges that financial services firms must face head on, while contending with political and social unrest, economic fluctuation, and strong regulatory standards. From global expansion to new reward structures, client experiences, and entirely new sectors, here are the top trends affecting financial services firms across the globe.

Top Six Life-Health Insurance Industry Trends to Know

Insurance industry spend in technology and analytics has increased at significant levels, as companies continue to integrate innovation into business processes. The average insurance company increased spending by nearly 22% and roles within data analytics more than doubled since 2013. Companies are making big bets that emerging, innovation from InsurTech and leading outsourcers will streamline internal processes and improve the way that they interact with customers. In our 2018 Digital and Intelligent Innovation Survey, we found that 58% of insurers have reached the implementation phase on one or more elements of the new digital and intelligent innovation toolbox.

Top Five Property-Casualty Insurance Industry Trends to Know

Property-casualty insurance firms have seen a significant shift in the staffing profile in recent years. The average company added over 20% more staff in technology, actuarial, and analytical roles compared to a 40% decline in front office roles, including policy processing, data entry, and clerical work. We anticipate that automation will require fewer employees to directly interact with the customer and perform data entry tasks, as these activities are delivered through automated and digital methods.

The Spotlight: Brooke Green, Partner, Radford

Brooke Green is a Partner and leader of Employee Rewards and Talent Consulting for Aon’s Radford division. She leads consulting teams focused on providing talent management and rewards advice to technology and life sciences companies. Brooke has significant experience developing compensation and career frameworks for various firms, including small start-ups and large global industry leaders. She has been practicing in the San Francisco Bay area for over 20 years.

What We Learned from the 2018 Proxy Season

Another proxy season has wrapped up and, with it, the eighth year of say-on-pay votes are in the books for most public companies. Negative vote recommendations for say-on-pay proposals from Institutional Shareholder Services, Inc. (ISS) and Glass Lewis & Co. (Glass Lewis) went up slightly—as did the number of outright say-on-pay failures for both the Russell 3000 Index and S&P 500 Index. When it comes to equity proposal votes, ISS and Glass Lewis models are not always needed for sufficient shareholder support. Companies can obtain necessary shares to adequately fund their programs by engaging directly with their shareholders—even in the face of receiving negative recommendations. In any case, for both say-on-pay and positive share plan proposals, it all comes down to planning ahead.  

What's Trending in Major Financial Services Hubs Across the Globe?

The influence of evolving technology in financial services is changing industry landscapes and long-lasting practices across the globe. Certain economies and companies are finding it easier to adapt to the moving industry and to new regulations. For some countries, the challenge is creating a deep-enough pool of skilled workers to meet demand. For others, it’s a matter of cutting redtape to encourage new businesses, or embracing new industries and business models.

SEC Enforcement Action on Perks Disclosure Reminds Issuers to Be Mindful of the Standard

The SEC’s recent enforcement action against a large, US-based company for failure to properly disclosed executive perquisites is a good reminder to all issuers of the circumstances under which detailed disclosure is required.

SEC Expands Scope of Companies that Qualify for Reduced Compensation Disclosure

The SEC recently amended its definition of smaller reporting companies (SRCs), which could pave the way for nearly a thousand additional companies to take advantage of reduced compensation disclosure requirements. However, it may not be wise for every qualified company to scale back their disclosures, particularly if they have active investors who have expressed concerns via Say-on-Pay votes in the past.

Understanding Your FinTech DNA to Create a Culture that Truly Stands Out from the Crowd

When it comes to creating compelling company cultures, financial technology (FinTech) firms are in an enviable position—they can pick and choose best practices and styles from both the financial services and technology sectors to carve out their own path.

Aon Reveals Its Ward’s 50 List of Top Performing Insurance Companies for 2018

The list of Ward's 50® top performing insurance companies was released by Aon plc, a leading global professional services firm providing a broad range of risk, retirement, and health solutions. Ward benchmarking is the leading operational and compensation benchmarking and best practices service for insurance companies.

 

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