A recent compensation survey of compliance executives across an array of industries in the United States found that – during a year when their in-house counsel counterparts saw an overall compensation decrease of 3% – overall compliance officer compensation levels increased by 8%.
BarkerGilmore LLC last month released its annual Compliance Compensation Report to provide the compliance community a compensation analysis for compliance officers and chief compliance officers based on the company’s recent survey of chief compliance officers and (non-chief) compliance officers.
GRIP took a closer look and asked a couple of other (non-BakerGilmore) recruiters about the survey results.
The study
The company, based in Fairport, NY, focuses on the placement and development of general counsel, in-house counsel, and chief compliance officers.
BarkerGilmore interviewed 25 CCOs in various industries to understand the challenges they are facing today to produce the results. This is a small sample size, but given the difficulty of obtaining meaningful intelligence on the subject of compensation the report provided some interesting clues on the state of the compliance job market, its direction as well as what employers value in terms of experience and education.
In creating the report, its authors observe that the demand for compliance talent has never been higher, with companies scaling up their compliance teams, and paying what it takes to retain and attract the right talent.
Significance of the law degree
Total compensation for compliance officers overall increased by 8%, but it was chief compliance officers who saw their total compensation rise a whole 10%, plus they saw an increase in their long-term investment (LTI) plan and bonus, with LTI going up 14% and bonuses up by 3%.
Compliance officers not in the “chief” role saw an increase of 6%, with the only changes occurring in the compliance officer’s base salary, and no change in LTI and bonus.
Total compensation for CCOs with a job description was 69% higher than those without. The difference in compensation was observed at all levels – base, bonus, and LTI – according to the survey data.
CCOs with experience working at Am 100 law firms earn significantly higher total compensation than those without law firm experience and those that worked at small or boutique law firms.
Female CCOs
Total compensation packages for female CCOs were 1% lower than their male counterparts. Thirty-seven percent of Chief Compliance Officers expect to make a compensation-related job move within the next year, down 3% from last year.
For compliance officers, the overall gap in total compensation between compliance officers with job descriptions and without is 15%; however, the gap widens significantly based on the ranking of the law school attended by the compliance officer. Compliance officers who graduated from a top 50 law school made 56% more in total compensation than those without a job description.
Similarly, compliance officers with law firm experience saw their total compensation increase by 25% when compared to those without law firm experience. The gap grows to 62% if that law firm experience was with an Am Top 50 firm.
An interesting statistical detail in the survey pointed to a shift, around the mid 1990s, for compliance officers much more frequently having legal training when joining the industry. This would be something worth delving into further if confirmed by a survey involving a larger sample size.
Female (non-chief) compliance officers made more than their male counterparts – 2% more in total.
Industry type & company size
Public companies paid the best compensation rates, with those at businesses reporting an annual revenue of $5b to $10b even slightly beating out the $10Bb+ plus category – $305K versus $300K for base compensation CCOs. However, when you factor in LTI plans and bonuses, the largest ($10B+) public firms truly stand out, with total compensation packages getting to $639K for CCOs.
Compliance officers did not see as much fluctuation due to their employer’s size when their LTI plans and bonuses were factored in; the compliance professional typically earned $336K in total at the company with $5b to $10b in revenue, and s/he made $370K in the $10b+ company.
Speaking of LTI plans by themselves, CCOs made $150K at the $10B+ businesses in this survey.
CCOs and compliance officers earned the most in the sector labeled “energy/public utility,” ($638K and $452K, respectively), with financial services being the lowest industry sector, with CCOs earning $387K and compliance officers $320K.
Gender
Female CCOs earned a total compensation package of $345K per year and men earned $347K. The difference came from the bonus: Women received $70K versus men’s $86K in bonus payments. But women earned more in LTI – $25K versus $16K for LTI – just not quite enough to make up for the bonus discrepancy, at least in this survey pool.
Compliance officers saw women come in higher than men – $261K versus $255K – with bonuses being $31K for females and $33K for males, and $15K in LTI for females and $12K for males.
Other recruiters weigh in
In introducing its report, the company acknowledges that any analysis of raw compensation data excludes such important variables as an individual’s unique experiences, abilities and interpersonal skills, plus their employer’s financial situation and the strength of the local economy.
It is also true that surveying just 25 US-based compliance professionals provides a truly small snapshot, and, as mentioned previously, this should be kept in mind when examining the data.
No other recruiters wanted to discuss the results of a competitor organization’s study on the record with us, unsurprisingly, but one of those contacted felt the upper range of the compensation numbers for CCOs was low. If so it would be fascinating to see if any undershoot here extends to the other salaries being reported.
Another recruiter who submitted a response off-the-record looked outside of the report’s findings to comment on the future.
“In light of the small and regional banking crisis, we may see an increase in need for auditors, financial controls professionals, compliance, attorneys, and risk managers. As funds are flowing out of small and regional banks to JPMorgan, Bank of America and other too-big-to-fail banks, they’ll need to ramp up hiring of compliance professionals to manage the growth in assets,” this person said.