News and commentary about white-collar crime, enforcement, and compliance
Harry Cassin
Publisher and Editor
Andy Spalding
Senior Editor
Jessica Tillipman
Senior Editor
Bill Steinman
Senior Editor
Richard L. Cassin
Editor at Large
Elizabeth K. Spahn
Editor Emeritus
Cody Worthington
Contributing Editor
Julie DiMauro
Contributing Editor
Thomas Fox
Contributing Editor
Marc Alain Bohn
Contributing Editor
Bill Waite
Contributing Editor
Russell A. Stamets
Contributing Editor
Richard Bistrong
Contributing Editor
Eric Carlson
Contributing Editor
In March 2023, the DOJ Criminal Division revised its valuable Evaluation of Corporate Compliance Programs (ECCP) to emphasize two priorities for corporate compliance: (1) the preservation of communications made via personal devices and instant messaging apps and (2) compliance incentives and disincentives in executive compensation.… Continue Reading
Performance bonuses are always an exciting upside. But what about compliance officers? Does incentive pay work for them? There are ways to measure performance and match it to rewards for most C-suiters, managers, and professional staff — sales targets, production goals, hiring matrixes, and so on.… Continue Reading
A German court recently ordered a fund manager who was convicted of insider trading to repay almost six times the illicit profits he made by the trades, in addition to a custodial sentence.… Continue Reading
The national average salary for a Chief Compliance Officer is nearly $132,000, according to Glassdoor, with some CCOs making more than $250,000 a year.
Glassdoor — a site with job listings and company reviews — shows 112 salaries for the CCO position.… Continue Reading
Searching for perverse incentives that can become compliance land mines means messing with people’s pay.
You are not just looking to eliminate potentially dangerous design elements, but also identifying changes to variable plans that preserve as much of the positive power of your incentives as possible, while addressing the risks.… Continue Reading
Consider a salesperson who has reached his bonus cap three months before fiscal year-end. Any achievement after that is not only unrewarded, but is actually penalized in the sense of creating higher future performance expectations and targets.… Continue Reading
The root causes of perverse incentives often hide (in plain sight) in the most common variable compensation structures, which include payout floors, thresholds, payout caps, and stretch goals.
The seeds of the Epipen scandal, for example, were planted when Mylan’s management became eligible for millions of dollars of a one-time bonus payout if they hit 90 percent of their cumulative earnings target.… Continue Reading
In recent years, the financial sector has produced one shocking scandal after another. The latest outrage came when news broke of how Wells Fargo’s cutthroat sales culture drove low-level employees to open more than two million unauthorized customer accounts.… Continue Reading
Marc Hodak, an NYU Adjunct Professor and compensation consultant, spoke at the Ethical Systems event in New York a few weeks ago. He talked about “incentive time bombs,” where “bad behavior can hide behind good performance,” and how those behaviors can go unnoticed and unobserved by management until it’s too late.… Continue Reading
Last week I attended a one-day event at the NYU Stern School of Business, hosted by Ethical Systems and the Behavioral Science and Policy Association.
During one session, “Walking the Tightrope: Balancing Incentives to Perform vs.… Continue Reading
It’s executive compensation season at shareholder meetings and corporate boardrooms across America, and pay for performance continues to be a hot topic.
The intersection of CEO compensation, performance and trust is discussed in recent stories about:
Comcast
Comcast’s Brian Roberts Made $36.2M In 2015, Up 10% (here)
Comcast compensation: Michael Cavanagh is highest paid CFO in the nation (here)
Verizon:
Battle between Verizon and strikers enters endurance phase (here)
And Citigroup:
About One-Third of Citigroup Shareholders Rebuke Bank on Pay (here)
Research shows that performance-based pay can have dangerous outcomes for companies that implement it.… Continue Reading
In the February 23 edition of the Harvard Business Review, two professors from the London Business School argue that “performance-based pay can actually have dangerous outcomes for companies that implement it.”… Continue Reading