McLagan has an extensive product line and consulting practice geared towards the needs of the investment banking business.
Our team of experts is available to advise clients on a broad spectrum of topics, including compensation plan design, business benchmarking and cost savings.
Our compensation surveys include salary, cash incentive and long-term awards for product specialist professionals (M&A, real estate, restructuring, private placements, etc.), as well as relationship management bankers across all major industries and sectors. Over 100 firms participate in our annual investment banking compensation benchmarking surveys globally.
We use detailed general ledger data to assess a firm’s competitive position across a broad array performance metrics covering investment banking products, including revenue, staffing, costs and capital.
Custom studies are conducted at various types of firms (e.g. global banks, regional broker/dealers, investment banking boutiques) providing data on clients’ incentive funding approaches, payout rates, allocation of awards, mix of pay, and utilization of long-term incentives.
For global, middle market, and boutique firms, our investment banking productivity study enables management to assess the investment banks’ overall efficiency. The resulting report compares a firm against its peer using financial metrics such as revenue per banker, revenue per head, and compensation as a percentage of revenue. In addition, the report contains detailed benchmark statistics related to non-compensation costs, banker staffing ratios, as well as infrastructure support headcount. Because we are able to scale this information to company size and revenue, we help firms develop compensation, human capital and fiscal strategies which foster company growth.
McLagan’s coverage is global, with offices in Stamford, Chicago, New York, London, Japan, Hong Kong, India, Shanghai and Dubai.
McLagan has recently completed consulting assignments in investment banking to help firms navigate issues such as:
How should a firm transfer equity from an ownership perspective as its founder sunsets his career?
How does a dollar of revenue get allocated between functions? Should the firm’s bonus pool be funded from revenue or profit? How should the bonus pool be allocated to individuals? What is the proper mix-of-pay?
How can a firm evolve from an all-cash compensation program to include a long-term/deferred award? What is the proper vehicle? How much do other firms defer?
What is the typical revenue generation for a managing director at a firm of a particular size? How long should it take a new hire to reach a certain expected level of production? What percentage of revenue should a managing director receive in compensation?
Where should a firm target its recruitment efforts? To what extent does deal making come from prestige of the firm versus the individual? What is the best cultural fit for the firm?
What is the optimal staffing model for the firm? How many analysts and associates are needed to support the senior bankers? How much incremental value does a vice president bring over an associate?
How should the firm handle its analyst and associate program? How should salary rates and bonus expectations be set? What are the current offer packages?