2011 marks the 20th 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.
As the Economy Strengthens, ALM Compensation Levels Begin to Rebound
Over the past several years, many U.S. financial institutions have downsized their asset/liability management staffs and suffered through the all too familiar squeeze of salary freezes and increased workloads. However, over the past 18 months, the domestic banking industry has begun to stabilize with increased capital reserves now allowing a modest return to lending. These positive trends have injected new energy in the form of increasing banking activity, higher compensation levels, better employee benefits and the promise of new growth.
Salary Increases Have Returned. After suffering through the worst recession since the 1930s, the U.S. banking industry and asset/liability managers specifically have seen modest salary increases return. Further signs of our strengthening economy are being seen in the increasing use of incentive bonus awards. Virtually all of the bank asset/liability managers participating in this year’s BALM newsletter compensation survey had their total cash compensation made up of base salary and cash bonus awards.
As the financial services industry has continued to recover, bank management now faces new challenges regarding the growing criticality of retaining their key bank employees.
Average salary increases for the ALM Analyst position during 2010 was 1.2%. The salary levels for Vice President ALM and Senior Vice President ALM positions increased by an average of 1.02% and 1.03%, respectively during 2010. As mentioned above, all reporting ALM positions received cash bonus awards during 2010 with those awards ranging from 2% to over 10%. The combination of salary increases and cash bonus awards during 2010 resulted in average total cash compensation increase for reporting bank ALM positions of 4.1%.
