BarkerGilmore, a boutique executive search firm, has released its compliance compensation report for 2019. It makes some interesting comparisons between financial compliance officers' salaries and bonuses and those of compliance officers in other sectors.

BarkerGilmore conducted an online survey between March and May this year to gauge trends in compliance officers' remuneration for the year of 2018. The 18-question online survey was administered to a random sample of compliance officers at various levels of seniority at different-sized publicly-traded and privately owned organisations throughout the United States.

The survey mentions three different types of position: the chief compliance Officer or CCO, the enterprise-wide head of compliance in an organisation; the more lowly managing compliance officer, a compliance person with at least one person reporting to him directly (and who might be called a division CCO, a vice president, a director; and an individual contributor, a compliance person to whom nobody reports directly (his title may be director, manager, analyst or specialist).

The recruitment firm says: "Now more than ever, compliance leaders across all industries are expanding their role from that of a watchdog and enforcer to a strategic advisor with direct support from the Board and C-Suite. The compliance function is not only viewed as an operational necessity for most organisations, but  asa strategic entity tasked with building relationships with both key industry regulators and internal stakeholders in every department."

Vital statistics

The median annual salary increase rate for all positions across industries is 4.1%, down 0.1% from the previous year, with the consumer sector experiencing the highest median increase rate of 4.8% between 2017 and 2018. The industrial and manufacturing sector experienced the lowest. The financial sector is somewhere in the middle.

Public or private?

At all positional levels, a statistically significant difference exists between the pay of those at publicly-traded companies and those at private companies. For chief compliance officers, this disparity is much less noticeable for CCOs who hold law degrees than for those without. The size of the gap between compliance officers in public and private organisations is especially noticeable through the Long-Term Incentive (LTI) remuneration component. LTI is much higher for compliance officers at public companies and non-existent for most compliance officers at private companies.

Peer comparison

46% of all respondents believe that their remuneration is average and comparable to that oftheir peers at other organizations. 25% feel their compensation is above or significantly above average, while 29% believe that they are underpaid. Compliance officers in the consumer and healthcare and life sciences industries express the highest levels of satisfaction, with 30% saying that they are paid more than or significantly more than the average. Those in the financial industry express the greatest dissatisfaction, with 33% saying that they are paid below or significantly below the average.

BakerGilmore asked compliance people: "Relative to your peers at other organizations, do you feel that your 2018 compensation was: Significantly Below Average, Below Average, Average, Above Average, or Significantly Above Average?" Their responses in different sectors of business were: Consumer - 9% Significantly Below Average, 9% Below Average, 52% Average, 30% Above Average, and 0% Significantly Above Average.
Financial - 6%, 27%, 45%, 21% and 1%.
Healthcare and life sciences - 3%, 27%, 45%, 21%, and 1%.
Industrial - 0%, 26%, 47%, 26%, 0%.
Technology - 5%, 21%, 47%, 26%, 0%.

Likelihood of compensation-motivated job search by industry

Here the question was: what is the probability that you will be looking for a new position in the next year due to compensation issues?

Consumer: very low 17%, low 22%, hhigh 35%, very high 26%.
Financial: very low 17%, low 43%, high 26%, very high 14%.
Healthcare and life sciences: very low 12%, low 48%, high 26%, very high 14%.
Industrial and manufacturing: very low 6%, low 56%, high 18%, very high 21%.
Technology: very low 11%, low 63%, high 21%, very high 5%.

Annual base salary increase by industry for all positions

This "quick and dirty" snapshot of salary increase rate by industry was as follows.

Consumer: 4.8%.
Financial: 4%.
Healthcare and life sciences: 4.1%.
Industrial and manufacturing: 3.7%.
Technology 4.5%.

Chief compliance officers' total remuneration by industry

Consumer: private US$195,750; public US$430,000.
Financial: private $274,515; public $363,600.
Healthcare and life sciences: private $332,000; public $507,000.
Industrial and manufacturing: private $327,500; public $445,000.
Technology: private $301,000; public $411,000.

Managing compliance officer's total remuneration by industry

Consumer: private $296,618; public $231,000.
Financial: private $300,000; public $280,000.
Healthcare and life sciences: private $190,000; public $310,000.
Industrial and manufacturing: $237,250; public $256,500.
Technology $230,000; $383,000.

Individual contributor's total remuneration by industry

Consumer: private $142,000; public $154,000.
Financial: private $151,500; public $176,000.
Healthcare and life sciences: private $136,000; public $191,500.
Industrial and manufacturing: private $164,000; public $192,000.
Technology private $186,000; public $224,333.

Basic salary breakdown by organisation's revenue

For organisations earning less than $500 million: private $115,000; public $102,500.
For organisations earning $500 million to $1 billion: private $119,632; public $145,000.
For organisations earning $1-5 billion: private $140,000; public $170,000.
For organisations earning more than $5 billion: private $122,500; public $136,000.

Bonus breakdown by organisation's revenue (expressed as percentage of salary)

<$500 million: private 25%; public 15%.
$500 million to $1 billion: private 24%; public 19%.
$1-5 billion: private 19%; public 20%.
>$5 billion: private 27%; public 15%.

Total remuneration breakdown by organisation's revenue

<$500 million: private $148,000; public $112,500.
$500 million to $1 billion: private $160,400; public $253,500.
$1-5 billion: private $165,000; public $213,000.
>$5 billion: private $157,500; public $168,500.

Total remuneration of average individual contributor by educational achievement

High school diploma: $104,600.
Undergraduate degree: $135,250.
Advanced degree: $137,000.
Law degree: $172,000.

Individual contributor: remuneration breakdown by gender

On average, female compliance people earn 76% of what their male counterparts earn. Unlike last year's gap, this year's is largest for individual contributors, where females earn only 72%. CCOs are not much different, with women earning about 74%. Managing compliance officers experience the smallest disparity, with females earning 91% of what males earn.

Base: female $106,000; male $131,000.
Bonus: female $16,000; male $30,000.
LTI: female 0; male 0.
Total remuneration: female $135,000; $188,500.