Preparing for a Tsunami of M&A in the Global Financial Services Industry

As M&A activity continues to pick up in the global financial services industry, it’s important to determine driving factors and use the checkpoints listed below to ensure a smooth transaction for both your business operations and employees.

The Spotlight: Joel Davies, Partner, European Asset Management and Banking

Joel Davies is a Partner in McLagan’s European Asset Management and Banking practice, providing reward consulting services to the management and boards of banking and asset management organizations. His particular areas of focus include reward strategy, executive compensation, and remuneration regulations. Joel has acquired extensive experience across compensation, benefits, and performance management through leadership roles in consulting and corporate environments in both the UK and U.S.

The Impact of Brexit on Talent and Rewards in Germany

Banks, insurers, and other financial services institutions are in a race against the clock to clinch licenses and bolster their continental workforces before Britain leaves the EU. Without a comprehensive trade deal between the UK and EU that covers financial services, companies risk having no replacement for lost passporting rights, which currently allow firms to serve clients across the bloc.

Infographic: ISS vs. Glass Lewis: Understanding Both Points of View

In this infographic we explore how ISS and Glass Lewis are approaching voting recommendations, pay
for performance and problematic pay practices policy application, as well as gender diversity on boards for the 2019 proxy season.

Infographic: Preparing for the Proxy Season

In this infographic we walk through a checklist of items for the 2019 proxy season to respond to this year's key policy changes with ISS and Glass Lewis.

Future-Proofing Your Talent

As financial services firms work on more technology initiatives, businesses must now put the transformation of their workforce at the center of their strategy. Companies are focused on exploring new ways of working through agile methodology, redesigning their organizational structures, evaluating their entire employee value proposition to improve engagement, and making strategic investments in new skills and technology to support this evolution.

The Spotlight: Gayle Appelbaum, Partner, Regional and Community Banking

Gayle Appelbaum is a Partner in McLagan’s regional and community banking consulting practice. She specializes in developing compensation plans that balance short and long-term risk while building shareholder value. Gayle focuses on the full spectrum of compensation and benefits issues, including corporate governance, pay-for-performance, risk assessment, taxation, regulatory compliance, M&A, and compensation agreement provisions.

How the SEC’s Hedging Rule Will Impact Public Companies

In December 2018, the SEC was able to close the books on a pending provision from the Dodd-Frank Act by finalizing a long-awaited hedging disclosure rule. The new disclosure requires most public companies to disclose any practices or policies regarding the ability of employees and corporate directors to hedge their company’s equity securities by adding a new paragraph to the corporate governance disclosure requirements in Item 407 of Regulation S-K. The final rule is generally consistent with the rule the SEC proposed back in February 2015.

What Public Companies Should Know About New Standards for ESG Disclosure

The standards recently issued by the Sustainability Accounting Standards Board have gained traction with some institutional investors, proxy advisory firms, and even public companies.

ISS Policy Changes May Make It Harder for Some Companies to Obtain Equity Share Approval

ISS’ decision to raise its scoring allocation towards the share pool duration factor and add a dilution threshold will likely lead to the most impactful changes for companies seeking shares in 2019.

Insurance Industry Trends and Outlook for 2019

Technology investments are happening at a record pace across financial services and property-casualty insurance companies are no exception. Strong financial conditions in 2018 have paved the way for an increased focus on optimizing the digital experience, which directly impacts the customer experience—a driving strategy for success in the insurance industry. When it comes to embracing change, there should be no letting off the pedal. Business leaders must continually evolve longstanding practices, using new advances in technology to fuel their journey forward.

The Spotlight: Blake Kerrick, Partner, Banking and Capital Markets

Blake Kerrick leads the banking and capital markets practice at McLagan. In this role, Blake provides performance and reward consulting services to the leading global banks and securities firms, regional banks and broker-dealers, and commodity trading firms. His areas of expertise include advising senior management on incentive funding approaches, levels, and pay mix, benchmarking key performance metrics across banking, sales, and trading divisions, designing annual and long-term incentive plans, and analyzing competitive pay practices and levels.

Location Strategy Analysis: Moving Your Firm Forward

A robust assessment of potential location strategies lies beyond just evaluating compensation differentials. When exploring relocation or building in new locations, it is important to look across multiple factors – especially the availability of quality talent – to inform decisions that will create financial impact and fit your business strategy. This article provides insights from our work comparing potential locations for clients and addresses some of the nuances when approaching location strategy analysis.

Infographic: Five Ways to Use your Compensation Survey Results

Compensation surveys enable teams to work smarter, providing access to data with deep insights and answers about pay requirements in specific locations. This data is key to identify cross-industry pay differentials and trends for specific jobs, all while ensuring that your valuable talent with cross-sector experience is being rewarded competitively. Our infographic outlines the best ways to leverage your compensation market data.

The Spotlight: Ray Everett, President, McLagan

Ray Everett is the president of McLagan, responsible for overseeing the firm globally. Previously, Ray led our Asia Pacific, Middle East, and Africa practices, where he conducted executive compensation consulting assignments, managed the regions’ survey programs, and worked with key clients. Ray has significant experience designing and implementing annual and long-term incentive plans, carried interest plans, performance management systems, and job architecture. He also advises the boards, remuneration committees, and management of many of our global clients.

ISS Clarifies 2019 Compensation Policy Updates

Recent FAQs provide clarification on how ISS will implement changes to its equity plan scorecard methodology, director pay evaluation, equity dilution concerns, and more. While not fully comprehensive at this point, the FAQs address several important compensation policies, which we summarize in this alert.

Cost Analytics: How to Uncover the Opportunities that Drive a $1 Billion Cost Optimization Program

Following the latest set of quarterly earnings results from major banks, it’s clear that there is a renewed focus on cost management. Prior to the results, analysts closely studied how banks are performing on costs, with some banks announcing or reiterating forward guidance on efficiency ratios. As we near the end of the economic cycle and macro risks continue to emerge, we anticipate that this renewed focus on cost will only intensify. Across our own client base, we are seeing heightened activity around assessing support costs.

What We Learned from CEO Pay Ratio Exemptions

Months before the first CEO pay ratio disclosures were filed, the SEC issued guidance around the types of individuals that could be excluded from a firm’s median identification analysis. With the first year of disclosures now mostly behind us, we decided to take a closer look at how those exemptions were used—and whether they proved to be beneficial for companies.

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.

 

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