Compensation Plan Design
Challenge
A Middle East-based investment firm engaged McLagan to review the firm’s compensation position and to give feedback on the existing term compensation plans.
One notable challenge the firm faced was implementing a sound compensation plan that met the needs of multiple stakeholders, including the local government, which owned the firm. In addition, the firm wanted to ensure that it was using appropriate methods of compensation for its various divisions.
Solution
Based on the review, we structured the following recommendations:
- A firmwide incentive plan
- Two carried interest plans for their Private Equity divisions
- A performance fee plan for their Asset Management division
- A sales plan for their placement team
- A firm-wide deferred compensation plan.
McLagan worked extensively with the firm’s Senior Management as well as with the Remuneration Committee and the Board through all three phases of the project:
- Preparation of Plan Rules
- Communications to staff
- Implementation of the various plans.
Results
McLagan’s deliverables allowed the investment firm to attract and retain some of the top talent in the industry. This provided the firm with the human capital required to maintain its high-growth strategy.
The plans also assisted in marketing the firm, as it has realigned employee interests with both firm and investor interests.
