Johnson Associates in the news
From the ashes of the financial crisis emerged a big change in how Wall Streeters got paid. Out went the legendarily massive year-end cash bonuses. In came IOUs.
“People were screaming bloody murder,” recalled Alan Johnson of compensation consultancy Johnson Associates. “They were yelling, ‘Pay me now!’ ”
An asset manager’s compliance staff does more than just say “no” to their colleagues, they help win mandates.
….Asset managers no longer want someone who just tells colleagues what isn’t allowed, but instead someone who can offer creative responses to problems and propose new ideas, says Alan Johnson, managing director of Johnson Associates.
….Compliance as a career is a new concept. Previously, compliance was often an extra duty thrown on the operations team, and not something people actually sought out as a job, says Johnson. But as regulations continue to grow and dominate the industry, “compliance is only going to get bigger,” says Johnson. While not as “sexy” as other investment industry positions, compliance offers reasonable security and good pay, making it a very appealing career choice, he says.
Wall Street’s bonuses—aka the ultimate measure of all that is important and worthy in finance—might be shrinking for many a banker this year. That’s the dismal news from Johnson Associates, a compensation consulting firm, which released its annual survey on the matter on Monday.
Strong investment performance and positive inflows will translate into more money in the pockets of asset management firm executives in 2014, new research has found….
“The increases in pay in the asset management business make it one of the most attractive parts of financial services,” says Alan Johnson, managing director of compensation consulting firm Johnson Associates….
Firms are moving away from compensation plans based solely on commission and adopting a “hybrid” model that includes commissions and some discretion, Johnson says. “The contribution [of sales people isn’t as obvious] as it was before,” he says. “That is an important change in the industry.”…
Human Resource Executive
….Meanwhile, many retailers such as IKEA, Gap, Whole Goods and Costco aren’t standing idly by, waiting for Congress to take action. They’re already paying workers above the federal minimum wage, adds Alan Johnson, managing director at Johnson Associates, a New York-based consulting firm that specializes in compensation.
Minimum-wage laws have also been passed in 22 states, including Michigan, Montana and Missouri, with wages higher than the federal rate.
All things considered, that’s partly why the survey’s results don’t surprise Johnson. Although there are people willing to work for minimum wage, he says employers realize that the savings simply aren’t worth it when considering the problems that sometimes accompany low wage earners like high absenteeism.
Johnson believes an increase to between $10 and $11 per hour is “the sweet spot?. Still, wages are tricky and vulnerable to snowballing, creating even more problems….
Equity analysts at asset managers often enter the position for life, a decision that could be paying off with better compensation and work culture than their investment bank counterparts.
Before the financial crisis, working on the sell-side of finance was known to be arduous but lucrative. Since then, industry changes have lowered the pay and eliminated many positions, making the buy-side higher paying for analysts, says Alan Johnson, founder of compensation consultancy Johnson Associates.
“Now you make more money and the culture is better,” he says. “It’s a good time to be in research in asset management.”
….Although Gorman’s wealth management target was the most aggressive cut to pay ratios in Morgan Stanley’s three business units, the 55 percent ratio is still much higher than the 40 percent or less he outlined for institutional securities and investment management.
“Bank executives say, it’s a high-cost, high-aggravation business and why can’t we bring it under control?” said Alan Johnson, a Wall Street pay consultant, referring to the challenge of managing the personalities and pay packages of thousands of individual advisers. “They think about it every day – even just getting another 1 percent on billions of dollars’ of revenue is a lot of money.”….
Making it big in media means generating hits. And while top executives may not be hands-on with every decision, they are where the buck stops.
Take Disney’s animated blockbuster “Frozen,” which grossed $1.2 billion at box offices worldwide. While Disney CEO Bob Iger didn’t make the movie, he did orchestrate Disney’s $7.4 billion acquisition of Pixar in 2006, which brought in talented executives to help reform Disney’s faltering animation studio.
“With movie studios and the media, it’s more of a talent business. You have highly paid people at all levels,” said Alan Johnson, managing director of Johnson Associates, a compensation consultant in New York. “The view is the right CEO can make a big difference.”
The Wall Street Journal
Shareholder advisory firm ISS strongly disapproves of Walmart Stores Inc.’s corporate governance, assigning it “8” on a 10-point scale where 10 indicates the highest level of risk….
Alan Johnson, managing director at compensation consulting firm Johnson Associates, told Risk & Compliance Journal that Walmart’s practice of adjusting compensation when performance targets are not achieved is neither unusual nor unjustifiable. “I have many clients that do that,” he said, noting that in a complex, global company facing pressures on several fronts, boards often want to retain flexibility. However, he also noted that “Walmart does not do a very good job of explaining.” But when half of the stock is in the control of the founding family, shareholder outreach may be an understandably low priority….
Coming in a year in which corporate earnings gains continue to come mostly from job cuts and streamlining instead of organic growth, as well as nearly a decade of stagnant wage growth for rank-and-file workers, continued gains in CEO pay underscore the disconnect between boardrooms and Main Street. Among the nation’s 104.8 million full-time workers, average median annual wages were $40,872 last year, up just 1.4% over 2012.
“The extremes are getting bigger and run smack dab into the debate of income inequality,” says veteran compensation consultant Alan Johnson.
“Board’s are quite concerned over how executive compensation will be perceived. There’s very little of, ‘Let’s make Mr. Big happy because we’re all friends and he’s a nice man.’ But you try to balance what’s competitive. I tell boards that their primary goal is to do what’s best for shareholders. If a CEO has created shareholder value, whether they’re good or lucky, and things look like they’re going to go well, you’re probably going to have to pay a lot.”