Board Fees Benchmarking

Client Profile

The client is a leading mutual that offers products including savings accounts and mortgages. It has an established and loyal customer base which it continues to look after. Additionally, the Society is an active participant in local community and charity causes and is eager to keep giving back to the local community.

Client Requirement

The board is eager to maintain growth and expand the customer base. They are fully aware that in order to retain and continue to attract new talent, remunerating the board members and employees across all levels needs to remain competitive and in line with the market.

In order for them to do so, they assigned us to carry out a benchmarking exercise to provide support on how they remunerate their INEDs. We were asked specifically to carry out market analysis for Board and Committee Chairs, as well as to find out that Base INED fees offered by other mutuals and lenders offering similar products.

Our Approach and Methodology

The approach was to determine the closest competitors of the Society, which included establishing competitors with bigger balance sheet and those with was lower. Subsequently, the team’s strategy would be to collect the relevant data by actively speaking to the market and cross checking publicly available data. As well as analysing competitor remuneration, the team also looked at the wider market and included FTSE 250 data.

The research was data driven and our findings were collected and documented to the client. The final document included detailed graphs, commentary on mean/ median remuneration levels across similarly sized, smaller and larger organisation. The findings also highlighted any outliers and drew out conclusions.

Outcome

We were able to advise the client on the areas where their current remuneration was in line with the market, was higher or lower than their competition. The findings also helped to educate the board of directors on what percentage their current pay needs to be increased by in order to attract FTSE 250 INEDs.

The client was pleased with the findings and were able to make more accurate decisions and helped the board distinguish where they needed to make appropriate changes to remuneration.