“Compensation is going to be a much more political process going forward. You’re going to based not only on your merits but what is politically attractive at the moment,” said Alan Johnson, managing director of compensation consulting firm Johnson Associates.
“Most [asset management] sales today involve lots of people – it’s not the stereotype of an individual salesman going around picking up orders,” said Alan Johnson, the founder and managing director of Johnson Associates. “With most fund firms now having a distribution strategy across multiple channels, it requires a more nuanced comp system, more of a hybrid – that’s where the world is going, and it’s the kind of thing you’ve got to get right.”
Compensation plans are, nevertheless, meant to modify behavior, and UBS may be trying to send brokers who still like transactions another message with its new plan, according to pay consultants.
“They probably figure that the transformation to fee-based has stabilized and that they need to keep high-producing brokers in place,” said Johnson Associates founder Alan Johnson.
Wall Street Journal
Let the employer make the initial offer, says Alan Johnson, managing director of Johnson Associates, an executive compensation consulting firm in New York. The problem, he says, is essentially people are guessing at what the company will give them—and they may undersell themselves.
New York Times
“The inequality movement has created a whole backlash against C.E.O. pay,” said Alan Johnson, managing director of Johnson Associates, a compensation consulting firm.
The 61 percent tally is “uncomfortably close to 50 percent,” said Alan Johnson, managing director of compensation-consulting firm Johnson Associates. “You don’t want to fail the vote, not at a big bank.”
Job cuts and constrained hiring are expected to continue on Wall Street in 2016, with bonuses likely to be lower than in 2015 due to difficult market conditions, according to a study by compensation consultant Johnson Associates.
“My clients have come to the conclusion that lots of these people don’t need to be in Midtown Manhattan or the City of London,” said Alan Johnson, managing director of Johnson Associates, a financial services pay consultant. “It doesn’t make sense any more.”
Wall Street Journal
If federal regulators influence clawback decisions, “there’s a high probability it will drive people out of the heavily regulated part of the financial-services industry,” said Alan Johnson, managing director of Johnson Associates Inc., a compensation consulting firm that closely tracks Wall Street. To retain talent, banks and other affected institutions “will just have to pay more” due to executives’ fears that “you may have to give some of [the money] back.’’
“Although the overall pay rule is tougher than previous versions, it is certainly still more benign relative to European rules,” said Alan Johnson, managing director of Johnson Associates Inc, a compensation consultant serving financial services firms, referring to the proposal.
He said the four-year deferral period “is not overly restrictive.” But the clawback could prove “onerous” since it covers activities of seven years.
“However, the real issue is how it will be determined and who will enforce the clawback?” he said. “Will the government have a role and how consistent will the application be?”