Investment Banking

McLagan has recently completed consulting work for capital markets firms as follows:

• Developed incentive plan design for several boutique investment banks, with particular focus on linkage to business strategy, stage of development and resource profile.

• Designed and executed year-end compensation summary reports for management at several "bulge bracket" investment banks as well as a wide range of commercial banks (both US and international).

• Designed a long-term incentive plan for an international bank, with particular focus on linkage to US business performance.

• Assisted in the compensation strategy for several firms, both pre and post IPO.

• Assisted in a job alignment and banding exercise at a leading financial services organization, including complete compensation benchmark review of 15,000 employees.

• Reviewed title ratios and promotion criteria at a leading international bank against market practices.

Pay & Productivity Studies

• Quarterly Financial Benchmarks: Provides detailed analysis of the financial performance of approximately 25 publicly owned or publicly disclosed commercial and investment banks.

• Board Flash: Provides an early assessment of an organization’s compensation positioning against the competitive market covering all officer level staff, VP and above. Equities, Fixed-Income, Investment Banking, Executive Management and Non-Revenue staff. All regions are covered in this survey. Approximately 10 firms participate.

• Gauge Benchmark: Provides detailed analysis and actionable results for staffing levels, grade pyramids, cost levels, structure, competitiveness, market sizing and key performance rations (payout ratios, front office to back office ratios, and cost per head). Approximately 10 firms participate.

• Institutional Equities Performance Monitor Service: This service covers the Institutional Equity business conducted by over 70 major securities firms with approximately 2,000 of the largest institutional investors worldwide. Using the Performance Monitor Service, participating firms can evaluate their current position in the institutional market, develop market and client coverage strategies, and monitor firm, product, salesperson and trader performance.

• Equity Sales Metrics/Productivity: Utilizing a combination of revenue, aggregate compensation spend, and staffing information, this study provides participants with comparative data to benchmark their scale, production, and productivity (per capita and per $ spent) in Institutional Equities. Detailed metrics can be provided by function (Sales, Sales Trading, Trading and Research) and by regional product (US Equities, Pan-European Equities, etc.) vs. a group of comparable peers.

• Equity Research Business Factor Benchmark: Provides benchmarking information regarding the size and scope of equity research platforms vs. peer firms. The benchmark is conducted annually and covers: aggregate equity research costs, equity research headcount, methods of allocation of equity research costs, scope of equity research coverage.

• Investment Banking Productivity: This study provides a productivity metric spanning products, industries, regions, and officer title levels. By combining staff data, deal data and top-line revenues, and compensation information, we create metrics on productivity by level, pay level, deal position and type of deal.

Market Share Studies

• Institutional Equities Performance Monitor Service
  The basic objective of the McLagan IEPMS study is to support an active client account management process in the institutional equities business by providing comparable and actionable data on your firm's competitive position in the market and the incremental revenue opportunities that are available.

Using McLagan IEPMS data, participating sell-side securities firms can evaluate their current position in the institutional market, develop marketing and client coverage strategies, determine the appropriate allocation of resources and monitor firm, product, salesperson and trader performance over time.

The IEPMS is a quarterly performance survey conducted by McLagan Partners since 1972. The survey tracks the revenues generated from institutional investors in Americas, Europe & Asia.

Revenues are tracked by:

• Product Category (including Cash Shares, ADRs/GDRs, Convertibles, Listed Derivatives, Exchange-Traded Funds, Program Trading, Synthetic Equity Swaps, New Issues)
• Country of Issuer (Securities from issuers in US, UK, France, Germany, Japan, Brazil, Russia, etc.)
• Results are customized to match each firm’s unique perspective (i.e., regional desk structure, sales credit rates, market definition)

All data is confidential: no releases to press or non-participating firms. Special reports (e.g., by salesperson, by sales trader) and analysis available upon request.

Expense & Staffing Benchmarks Gauge provides actionable results. In an ever more challenging business environment, financial institutions must allocate resources as efficiently as possible. Gauge benchmarks your firm's performance against the competition and helps you focus on areas having the greatest potential to enhance your bottom line.

Financial institutions spend a considerable amount of time and money on budgeting and planning. GAUGE enhances the planning process by allowing participants to factor in peer trends when making strategic decisions.

Gauge provides comparable and actionable data on your competitive positioning versus your closest peers, including:

• Detailed cost by line item (compensation and non-comp costs)
• Staffing levels and grade pyramid
• Market sizing and trends
• Key performance ratios (e.g. pay out ratios, FO:BO ratios, cost per head)

Gauge takes data from the General Ledger and maps it into a standard structure to provide a real apples-to-apples comparison. Gauge has a demonstrated track record of delivering significant value to the world's leading financial institutions. Gauge takes your Cost & Headcount and compares it against your peers at granular level.

Gauge's approach includes:

• Sourced from financials
• Mapped by us to functions
• Questions on Exceptions
• Sign-off by each business
• Tailored reporting
• Draft results in 12 weeks

Output includes:

• Report for each detailed business unit and location:
• Headcount & Grade levels
• Cost by detailed line item
• Trends
• Trade count and ratios to take account of scale and complexity
• Conclusions and commentary

Gauge's reports may be used to:

• Identify and quantify variances
• Objective leverage to effect change
• Review external structural and organisational differences
• Input to decision making process