McLagan's compensation consulting practice is dedicated to helping financial services companies improve performance through strategic reward design and risk reviews.
We emphasize a balanced analytical approach to creating total reward solutions that focus on business strategy, financing, valuation, tax, accounting and regulatory considerations and guide clients in their decision making. We have successfully completed thousands of compensation planning, design, risk reviews and benchmarking assignments for our clients worldwide.
Our team-based approach to consulting ensures that we deliver value to our clients by making the best resources available including industry and technical specialists in each geographic location.
Our partnership with clients is based on our commitment to providing independent, fact-based advice related to:
- Annual and long-term/deferred incentive plan design and risk reviews for lines of business, product areas and functional/support areas
- Compensation benchmarking (peer group development, job selection, competitive positioning)
- Pay for performance benchmarking
- Year-end compensation budgeting/accrual and general plan administration
- Regulatory issues impacting specific lines of business and functional areas (e.g., mortgage, retail securities brokerage, risk functions, internal audit functions)
- Job evaluation, salary banding, organization/title structure evaluation
Case StudyA leading private bank had weak sales, high client attrition and a high cost of sales.
McLagan assessed client team compensation funding rates to determine the appropriate levels of compensation spend and identify areas to target for cost savings. Staffing and pay levels were evaluated for each function and position to further specify drivers of compensation funding variances.
Business Development Officer productivity and payouts were benchmarked versus what they would earn at competitor firms for their particular level and mix of sales. McLagan then developed incentive plans that supported the cross-selling behaviors required for the new business model, and provided greater incentives for growth while achieving targeted cost savings.
In its first year, the new plans:
- Increased sales by 30% with an increase in cash awards by about 10% and an increase in total incentive expense including equity by 16%
- Increased self sourced production of BDOs by about 20%
- Resulted in 70% more $1 million+ producers compared to the prior year