| 2010 ALM Compensation Survey |
2010 marks the 19th annual Bank Asset/Liability Management newsletter survey of ALM compensation levels within the US financial institutions industry.
Over the years the US banking industry has used the BALM annual compensation survey as a valuable compensation benchmarking tool. Many banking human resources departments have grown to consider this survey a cornerstone in the development of their annual salary administration and incentive compensation planning process. This year’s survey has been limited to profiling trends primarily within the North America banking industry.
Modest ALM Salary Increases Are Slowly Returning - After almost 2 years of treading water through the worst recession in decades, there is good news for employees in the U.S. banking industry, and asset/liability managers in particular. Salary increases, while modest, are returning. Many financial institutions throughout the United States slashed pay and eliminated merit increases last year. Now bank management faces new challenges regarding how to balance lingering remnants of the economic downturn with the growing importance of retaining their best employees. Many banks have instituted salary increases. Some financial institutions are even making up for previous wage freezes with bigger payouts. But many continue to reduce their employee base and are replacing salary increases with cheaper, more creative incentives. On average, A/L managers saw their total cash compensation increase by a mean average of 2.3% this past year. However, the average base salary increase, averaging just 1.03%, reflects the lowest rate of increase since the post- September 11th, 2001 economic downturn.
It is important to recognize that over 36% of the reporting financial institutions had reduced or frozen their base salaries and 64% had eliminated annual cash bonus awards. The current economy has placed increasing pressures on financial institutions throughout the country to improve quality, reduce operating costs, increase productivity, accelerate innovation and enhance service levels. These ongoing trends continue to force a shift of human resources priority away from employee retention & toward return on investment & preservation of capital
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National Compensation Trends - This year’s compensation revealed that the current economic downturn has placed increasing pressures on financial institutions throughout the country to improve quality, reduce operating costs, increase productivity, accelerate innovation and enhance service levels. These ongoing trends continue to force a shift of human resources priority away from employee retention and toward return on investment and preservation of capital. Moreover, today’s difficult economic environment has forced many HR managers to make decisions based on bottom line economics while attempting the to create a positive environment in which to motivate their employees. This year’s survey reflects the impact of the difficult economic and regulatory environment and the subsequent industry downward pressure on ALM compensation levels. Less than 3% of the reporting organizations indicated difficulties filling financial, risk management & ALM positions. This is reflective of the continuing consolidation of the industry which, when combined with the impact of the international recession and national and local regulatory pressures, is continuing to have a dramatic impact on ALM compensation practices throughout the United States.
The complete 2010 ALM Compensation Survey can be ordered directly from SCI for $129.95 including shipping & handling.
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