78% of companies are making changes to their variable remuneration models, to introduce the lessons that the 2008-2015 crisis has shown them, therefore, it is important to know how I should remunerate my managers today.
The short-term incentive has been one of the keys that has made it possible to explain the enormous assumption of risks that a professional was capable of assuming in order to collect his bonus.
For this reason, most European organizations (86%) have begun to remunerate with deferred bonuses on a mandatory basis to associate the results with sustainability and the consolidation of management decisions, although in North America 42% have not yet implemented it. .
Similarly, 32% of European companies plan to increase the use of bonus malus and the use of clawback clauses compared to 14% of North American companies, which shows that the European crisis has had a stronger impact on the Old Continent.
“Since 2008 we have seen a steady turnaround as companies are actively tying compensation more closely to multi-year risk and return,” says the Funds Society.
MERCER GLOBAL EXECUTIVE COMPENSATION STUDY.
Through the results of the Mercer Global Executive Compensation Study, it is clear that the most popular changes planned in organizations in compensation models are:
Strengthening to give back with malus bonuses and clawback conditions (47%).
Strengthening the link between performance management and compensation (44%).
And the use of non-financial metrics in the performance review (31%).
The study consists of an analysis of the compensation practices of 55 financial services companies (banks, insurers and other financial services companies) located in 15 countries in Europe, North America and Asia.
HR teams and compensation committees at financial services companies are challenged to find ways to structure salary and compensation to attract, motivate, and retain high-performing employees, while being mindful of regulatory requirements and public pressure.
Since 2008 we’ve seen a steady turnaround as companies actively link compensation more closely to multi-year risk and return, says Rafael Barrilero, a partner at Mercer.
Mercer’s latest report highlights the changes that financial services companies are making in 2015. For example, they are focusing much more on increasing individual differentiation in their bonus distribution.
There is an emerging difference between the compensation packages of European and North American banks, mainly due to the regulations of the European Union. European banks are increasing the weight of base salaries, particularly for their key employees, while in
North America is not carrying out this measure. The question is whether North American banks will be influenced by this trend so that their base salary remains competitive, they raise at Mercer.