Compensation and Market Trends Mid-Year Report 2016 … TRENDS REPORT 2016 COMPLIANCE CONTENTS Welcome to Barclay Simpson’s 2016 Compliance Compensation and Market Trends Report

Compensation and Market Trends

Mid-Year Report 2016Compliance

BARCLAY SIMPSONCOMPENSATION AND MARKET TRENDS REPORT

2016COMPLIANCE

CONTENTS

Welcome to Barclay Simpson’s 2016 Compliance Compensation and Market Trends ReportBarclay Simpson has been producing corporate governance market reports since 1990. We use our Mid-Year Report to update our Annual Report and as an opportunity to focus primarily on compensation. This report seeks to provide insight and guidance into compensation within compliance. This is supported by a comprehensive survey of compliance professionals registered with Barclay Simpson in June 2016. Clearly the respondents are not entirely representative as they are compliance professionals who are registered with a recruitment consultancy and who have taken time to complete the survey. There are no doubt many compliance professionals who go through their entire career without doing either. Nonetheless, the results make interesting reading and comparisons with previous years provide useful insights into changing shifts in compliance. Comparable reports exist for all other areas of corporate governance. They can be accessed in section 5 of this report (“About Barclay Simpson”) or at www.barclaysimpson.com.

We place great value on the professional reaction to our reports and would appreciate your comments and any requests for further clarification or information.

1 ExECuTIvE SuMMARY p 12 MARKET ANALYSIS p 23 MARKET COMMENTARY p 34 SALARY GuIDE AND COMPENSATION SuRvEY p 5 4i KEY CONCLuSIONS p 6 4ii OvERvIEW p 74iii GENERAL RESuLTS p 114iv SALARY GuIDE p 23

5 ABOuT BARCLAY SIMPSON p 25

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Living with Brexit uncertainty

Our employers survey published at the start of 2016 suggested a buoyant recruitment market for compliance professionals. 79% of compliance departments had reported they were finding it difficult to recruit, with only 12% considering it was unlikely that they would need to recruit externally during the course of the year. However, according to our own metrics the number of vacancies being generated in compliance had started to fall. This slowdown continued in the first half of 2016.

There are two explanations. First the banking sector which remains the largest employer of compliance professionals. There have been job losses across investment banking. Many have looked to withdraw from uneconomic business lines and cut their costs. If a bank withdraws from a business line then it no longer requires the associated compliance expertise. Cost cutting has also included shifting jobs to lower cost centers both in the uK and overseas. The second explanation is the Brexit vote, which affected the wider financial services market. Like many others in the recruitment industry we were anticipating that the demand suppressed by the uncertainty of Brexit would result in an uptick in demand as the vote was settled in favour of the status quo. Clearly this did not come to pass and has resulted in potentially further uncertainty. For both clients looking to recruit and candidates looking to change job, the result potentially increases the value option of not making a decision.

What can we say?There is no reason why the uK’s financial services industry should not continue to be successful outside of the Eu. The industry in London and the uK has a unique position in the world including a sophisticated and influential regulatory environment. It will no doubt continue to be one of the best places for a compliance professional to develop their career. However, if you work in compliance, as recruitment consultants what can we say to you?

First, uncertainty is no friend of the recruitment market and we are now living in more uncertain times. In spite of this, ultimately companies will need to recruit and compliance professionals will choose to change jobs. It may take time but the recruitment market will learn to live with the uncertainty caused by Brexit. Secondly, while compliance will be better supported than most other disciplines, if the financial services industry shrinks, so will the need for compliance professionals to support it. Thirdly, the uncertainty is being caused by the anticipation of change. Change or its anticipation is potentially a positive as it requires compliance professionals to consider its implications and, when necessary, implement the response.

The consequences of Brexit will no doubt have become clearer by the time we produce our annual market report at the start of 2017. In the meantime, as usual, this report focuses on compensation and the results of our annual survey. Our survey was conducted before the Brexit vote and it is likely that some of the sentiments expressed in it may have subsequently changed. The compensation data will not have.

Survey data generally positiveThe results of our survey were generally positive. Whilst there was a slight up-tick in the percentage of compliance professionals not working, no respondents reported they had been looking for longer than six months. It came as no surprise that the percentage of compliance professionals who reported they had changed job had fallen, although when asked ‘why they had moved, would move or what would most like to change about their job?’ the percentage reporting job security was never more than 4%. Salary increases had marginally fallen back from 8% to 7.5% for those staying with their employer and from 21% to 19% for those who had moved. However, salary remains a major motivating factor for compliance professionals.

A confident professionWhen asked the question, 71% of compliance professionals thought the value of their skills was increasing and only 4% stated a decrease. Whatever the future might hold, the compliance profession is not lacking in confidence, no doubt borne out of several years of continuous growth in the profession. Brexit may yet test this confidence.

ExECuTIvE SuMMARY1

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“ 71% of compliance professionals thought the value of their skills was increasing.

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MARKET ANALYSIS2

Vacancies

Fall in number of vacancies continues The rate at which vacancies are being generated in compliance, which having fallen in the second half of 2015, continued to fall in the first two quarters of 2016. Vacancies arise via the creation of new positions or by compliance professionals changing jobs. The slowdown in the second half of 2015 was caused by the latter, as the number of new positions was still rising. The continued slowdown in 2016 was the result of fewer compliance professionals changing jobs but also a fall in new positions. After an extended period of growth the number of compliance professionals working in financial services is now starting to level off.

This does not mean the compliance recruitment market will not continue to be dynamic as people leave and join the profession, departments grow and shrink, open and close and new areas evolve as others become redundant. In fact the vast bulk of vacancies are not new positions but replacement roles. Further, the three lines of defence model is changing the background and experience of the type of candidates that companies are prepared to consider. The movement of people between the various disciplines that make up corporate governance is accelerating and throwing up new opportunities by both allowing compliance professionals to transfer into a new discipline and also allowing others to transfer into compliance.

Rate of placements

Slowdown in the rate of placements To provide a better insight into the dynamics of the compliance recruitment market, this graph plots the rate at which placements have been made across the last four years. The graph demonstrates the rate at which vacancies are being filled.

The rate of placements fell back in the second half of 2015 and has continued to fall in 2016. The reason for the fall in 2015 was that in spite of a buoyant compliance recruitment market where clients were keen to recruit, they also had increasingly high expectations. In that respect, nothing has changed. There are still candidate shortages and, in many instances, no lack of willingness to recruit. However, a decline in the rate of placements is also typical when a recruitment market becomes more cautious. Clearly for many companies Brexit was having an impact even before the vote. Whilst some vacancies are still being filled as quickly as possible, there are others where companies are exercising discretion. Non critical vacancies may be left unfilled or ‘back filled’ internally, recruiting more junior and less expensive candidates to fill the gaps. Given lower salaries these are often more difficult positions to fill. Such a slowdown is characterized by interminable recruitment processes. Given the comparative surprise of the referendum result the effect still remains to be seen.

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- Placement rate

- New vacancies- Outstanding vacancies

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MARKET COMMENTARY3

Will still need to recruit The compliance recruitment market is a more uncertain place than it was a year ago and given the result of the Brexit vote, is likely to remain so. Whilst our own metrics (such as vacancy generation and rate of placements) point to a reduction in demand, Brexit will now become a longer term source of uncertainty, but one we anticipate the wider financial services industry and compliance recruitment market will adjust to and come to terms with. Potentially key will be access to the single market and the passporting of services without a fee.

General observations Companies remain highly selective and candidates who can demonstrate solid progress within a limited number of employers are of greater interest than those that have perhaps used a buoyant recruitment market to make multiple moves to maximize their immediate earnings.

Effective communication skills continue to rise up the value chain. As compliance moves forward compliance professionals must be able to engage with the front office and such stakeholder management skills have become key to recruitment decisions.

Whilst the demand for other skill sets have not changed significantly monitoring skills continue to be in focus, giving compliance professionals with an audit or risk backgrounds a potential advantage.

Mid to senior compliance roles remain London centric, although support roles continue to be moved to the regions, with many banks, insurance companies and consumer credit businesses choosing the North West, Mid Lothian and more recently the Midlands.

Sector observations The banking and credit recruitment markets have slowed significantly and are potentially the markets where passporting rights will have the most significant effect. Having been entirely candidate led this sector is becoming increasingly vacancy focused. As banks rationalize and concentrate their efforts, costs are being cut including associated regulatory costs. The huge weight of compliance vacancies from the banking sector means that only a small percentage decrease in vacancies has a disproportionate effect on overall demand. More positively, payments are a growth area which is benefiting from the rise of fin-tech companies where London is regarded as something of a world leader. Financial crime is significant within this, due to companies needing clients to be properly on-boarded from different backgrounds and jurisdictions.

Within investments, sectors such as asset management and private equity are global businesses and demand for compliance expertise continues. Given current regulatory scrutiny, there is every likelihood that smaller teams will continue to expand. Demand from this sector is shifting towards greater specialization and less flexibility in terms of asset class exposure.

Markets have enjoyed a mixed start to the year. Public trading sides of banks have suffered but smaller players have continued to be busy, particularly within Fx and the ever growing CFD market.

In the insurance and pensions sectors it is generally business as usual. In particular, the Lloyd’s market is unique and less exposed to Brexit considerations. Conduct is currently a particular area of focus together with Solvency II.

Within the contract recruitment market the first half of 2016 was notable for the number of roles requiring financial crime prevention experience at Officer to Senior Compliance Officer level. Brexit uncertainty could potentially be a positive for the contract market as companies look to fill otherwise permanent positions with interim resource. Time will tell.

“Companies remain highly selective and candidates who can demonstrate solid progress, within a limited number of employers, are of greater interest than those that have perhaps used a buoyant recruitment market to make multiple moves to maximise their immediate earnings.

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A confident profession Our survey was conducted before Brexit but in the full force of the uncertainty prior to the vote. What is striking is the relatively high level of confidence amongst compliance professionals. As we have already noted, when asked, 71% of compliance professionals thought the value of their skills was increasing and only 4% suggest a decrease. It came as no surprise that the percentage of compliance professionals who reported they had changed job had fallen, although when asked ‘why they had moved, would move or what would they most like to change about their role?’ job security as a reason was never more than 4%. The number of out of work compliance professionals has crept up from 2% to 3%, although none reported to have been out of work for over six months and a lower percentage reported they were finding it more difficult to find another job than in 2015. We would be delighted to report a similar outcome in 2017!

Motivations for movingThere was the usual discrepancy within our compliance survey between the primary motive given for those who have actually changed job – (career development), and the reason given for those who might potentially move – (salary). However, when asked what they would most like to change about their job, salary clearly came out top, with career development and work /life balance more distant seconds. Given salary is such a motivating factor within compliance, there may be some disappointment that salary increases achieved by both those staying or changing employer marginally fell back in 2016. This may go some way to explaining the overall decrease in satisfaction reported by compliance professionals with their remuneration.

Women working in compliance A number of financial services groups are actively looking to recruit and promote more women and overall their representation has historically been far higher in compliance than in other areas of corporate governance. It was therefore a little disappointing that according to our survey the percentage of women working in compliance marginally fell in 2016. This appears to have been caused by fewer entrants over the last two years. Given that men and women report having worked in compliance for a similar average period of time, 66% of men reported they were managers, against 61% for women. However, what was particularly notable was the discrepancy in the average salary, 16% higher for men although this might be influenced by the sectors they work in. It might also explain why 48% of women cited salary as the main reason they would seek another job, against just 35% of men even though the average salary increase women gained by staying with their employer was 8.9% against the 6.9% achieved by men.

Staff retentionIn this year’s survey we also gave compliance professionals the opportunity to share what they might like to say to their employer. There was not one simple message. As might be expected, we received a significant number of comments expressing dissatisfaction with their compensation, ranging from base salaries, bonuses and other benefits. This was already evident from our survey where 46% of compliance professionals expressed dissatisfaction with their remuneration.

Most managers can do little about the remuneration they are able to offer

their staff. However, other comments, including some complimentary about their employer, included a lack of recognition, appreciation, career development and communication. Many of these would appear to be fixable with enlightened management. If staff retention is a measure of a compliance department’s success, then promoting open lines of communication where staff can express their concerns, could be a potentially worthwhile initiative.

“Given salary is such a motivating factor within compliance, there may be some disappointment that salary increases achieved by both those staying or changing employer marginally fell back in 2016.

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This Mid-Year Report includes a significantly expanded section on salaries and compensation, designed to give a much fuller picture of overall remuneration packages.

Most compliance professionals are keen to know their market worth. This is not always easy to address. Two otherwise similar compliance professionals may enter the recruitment market and accept materially different salaries. We provide this caveat because we are aware that the compliance recruitment market is sufficiently diverse that it defies simple categorisation. However, compliance professionals and their employers want guidance and this is what we attempt to provide.

As recruitment consultants we are involved in the negotiations that take place between employers and prospective employees. We are aware that whilst salary is usually the most important consideration, a number of others factors go to make up total remuneration. In addition to the data we gather from the placements we make and the recruitment work we do, including contact with compliance and human resources departments about salary and other benefits, we have also conducted a Compensation Survey to provide specific detail on all different types of remuneration within compliance.

The Survey was of compliance professionals registered with Barclay Simpson and was conducted in June 2016. It generated several hundred responses.

Covers both permanent and contract marketsIn addition, we also conducted an Interim Compensation Survey focusing on the contract market. We have incorporated the key findings into this report to make it as easy as possible to understand the full picture for compliance.

We hope that you find the results interesting. This report provides the key highlights of the Survey. If you would like more detail about your specific sector or role, please call Adrian Simpson on 020 7936 2601 ([email protected]).

This section is broken down into 4 parts:

1. Key Conclusions – Key conclusions from the Compliance Compensation Survey

2. Overview – Commentary on the major trends in salaries and other benefits paid to compliance professionals

3. Compensation Survey – Results of Compensation Survey completed by compliance professionals

4. Salary Guide – Guide to salaries for specific compliance roles and positions

Compliance2016 SALARY GuIDE AND COMPENSATION SuRvEY

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Recruitment activity healthy, but down p 28% of compliance professionals have changed job in the

last 12 months, down from 35% in 2015

p Career development remains the most important motivation for those who have actually moved role (55%); whereas salary is the key driver for those considering a move (42%)

Salary increases marginally downp Average salary increase for non-movers 7%, down from

8% in 2015

p Average salary increase for job movers 19%, down from 21% in 2015

Other benefits add around 35% p Bonuses almost universal (89%) and highly significant in

value (19% of base salary)

p Additional pension benefits (received by 83%) are worth nearly 10% of base salary

p As in other areas of corporate governance, the average value of other benefits has dropped, but at £4,500, continues to be substantial

Drop in proportion of women p The percentage of women working in compliance has

dropped from 39% to 37% in 2016

p This is arguably the result of a lower number of women having commenced work in compliance over the last two years, according to our survey data

Work / life balance increasingly importantp 61% of comliance professional benefit from flexible working

p 67% would like more flexibilty

p When asked what compliance professionals would most like to change about their job, work / life balance (19%) nearly as important as career development (21%); and salary top (35%)

Compliance professionals confident in their value p Strong consensus that value of skills is increasing (71%),

with just 4% stating a decrease

p 23% more confident than in 2015, balanced by 23% who are less confident

But not complacentp Drop in the level of satisfaction with current level of

remuneration from 60% to 54%

p Small rise in proportion not working (up from 2% to 3%)

Tougher in the contract marketp Only 24% of contractors believe the market for their skills is

improving, down from 43% in 2015

p 58% of out of work contractors are finding it more difficult to secure a contract than they anticipated, up from 43% in 2015

The results of the Barclay Simpson 2016 Compliance Compensation Survey reveal compliance professionals becoming less satisfied with their compensation. However, the attitudes and rewards of compliance professionals between different sectors, regions, genders and other classifications are many and various. We hope you find the results interesting.

4iKey Conclusions

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A common refrain in both the compliance and our other corporate governance surveys was an interest in part time work. We have been aware for some years that many older, less salary conscious corporate governance practitioners regularly give up permanent work and become contractors to enable them to work on their own terms. Employers should perhaps take note that there is potentially significant latent demand for part time work which, in terms of our survey, is manifest in the ongoing desire for flexible working.

Whilst salary is not the primary motive for most compliance professionals seeking another job, those who do decide to move will, not unreasonably, use the process as an opportunity to better their salary. Our survey indicated that 69% of compliance professionals who had changed employer in the last 12 months were now content with their salary, against only 48% of those who had not changed employer.

Motivation for potentially entering the recruitment marketWe asked this question for the first time last year. It is useful to have comparatives and the response this year is consistent with last year. Whilst salary remains the most likely reason for those looking to move role, career development has a greater share of the vote than it did last year. However, salary was of particularly high significance to women.

Q - If you were to look for another job or go for an interview, what would be the most likely reason?

Motivation for entering the recruitment market This analysis looks at what the primary motivation was for compliance professionals who have changed employer in the last 12 months. Whilst career development remains the key driver, there has been a significant shift towards salary at the expense of both career development and a better work / life balance. It may well be that compliance professionals are bombarded with a consistent (but in our view often inaccurate) narrative, that their skills are in sufficiently short supply that companies are willing to pay substantial salary increases to secure their services. As our salary data indicates, this is not always the case. It does, however, in our view increase the likelihood of compliance professionals becoming dissatisfied and entering the recruitment market simply to increase their salary.

Q - What was your primary motivation for looking for another job?

Women and managers were most interested in career development; non-managers were most interested in salary. In a change with the past, men appear to have become less motivated by salary and more so by career development. As the potential ramifications of the Brexit vote start affecting the financial services industry, and particularly the banks, job security will most likely become a more prevalent motivation.

4iiOverview

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Salary increases achieved by compliance professionals who stayed with their employerAccording to our survey, the average increase for compliance professionals who stayed with their existing employer increased from 6% to 7%. It remains surprising but broadly in line with other areas of corporate governance that 16% of compliance professionals received no salary increase in the last year. Clearly for a number of companies cost pressures remain. Given the low rates of inflation and even the brief flirtation with deflation, an average increase of 7% exceeds growth in salaries in the wider economy. However, our average includes promotions and the buy-backs that are not uncommon when valuable compliance professionals look to resign, an event not only often marked by the offer of a higher salary but also a bigger role.

Q - What best describes your salary increase in the last year?

What is surprising from our survey is the high percentage of compliance professionals who reported they had received no salary increase at all. It is none the less surprising that the figure has risen from 15% in 2015 to 21% in 2016, the same percentage in 2014. This phenomenon is not unique to compliance. To varying degrees it is common across all areas of corporate governance. For example, in risk management the figure has risen from 16% to 26%.

The answer may well lie in those employers who recognise that where compliance professionals do not have marketable skill sets, they do not have to offer salary increases to retain them. We can only speculate what that might do for a compliance professional’s motivation.

It does, however, go some way to explaining that in spite of a rise in the overall percentage, the number of compliance professionals reporting dissatisfaction with their salary has risen.

An interesting finding was that women benefited from an average 8.9% increase, against men where the average was only 6.9%.

Salary increases achieved by changing employerThe survey indicates that the average salary increase achieved by those compliance professionals who change job is 19%, down from 21% achieved last year. It would appear that the four year run in the increase in compliance salaries has come to an end and possibly some of the hype will go with it.

There remains a significant difference between the 19% increase in salary achieved by those changing job and the 7.5% average achieved by those who stayed with their existing employer. However, analysing the average, as we have done for the last two years, reveals a wide range of outcomes. It is particularly instructive that whilst 19% may be taken as the average, only 25% of compliance professionals actually accepted a salary increase between 10% and 20%. There are a wide range of considerations that go into the decision to accept a new position and, whatever the resulting salary increase, the results of our survey indicate it is unlikely to be the average figure of 19%.

Q - Which best describes how your current salary compares to your salary in your previous role?

The main difference between 2015 and 2016 is the fall in the number of compliance professionals who have achieved a salary increase over 40%. This possibly confirms that what many might otherwise believe to be a rampant recruitment

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15% 17% 20% 21% 19%

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market is coming to an end. It also reveals the big disparity between the salaries a compliance professional with an in-demand skill set can command against those who cannot.

Non-managers achieved significantly higher salary increases than managers and there were higher increases available in London than in the regions, but there was no material difference between men and women.

Clearly a significant number of compliance professionals are prepared to move for less or the same salary. Whilst both relocation or redundancy represent an obvious reason why someone would move and accept a lower salary, there are other reasons. Senior compliance professionals need to ensure their skills remain current and marketable, a job move / change of employer can make that possible and worthwhile, even at the short term cost of a lower salary. Equally there are those who do not seek a bigger job but simply, in their terms, a better job. A new role might involve a shorter commute, improved work / life balance or avoiding the responsibility and corporate politics that better remunerated jobs often require.

Satisfaction with salarySalary increases in 2016, both from staying put or changing employer have fallen in 2016. In response, compliance professionals are less likely to feel adequately compensated. The percentage who claim to be satisfied has fallen from 60% in 2015 to 54% in 2016. The general results section reveals some wide discrepancies between different sub-groups.

Salary v Remuneration Base salaries always catch the headlines, however offers of employment invariably include other benefits which can often form a substantial part of overall remuneration. We will use this opportunity to provide an overview of the other benefits that compliance professionals might expect to receive.

BonusesThe average level of bonus in compliance remained unchanged at 19%. Bonus levels vary widely, as can be seen from the general results section. Overall 89% of compliance professionals reported they worked for an employer that paid a bonus, down from 91% in both 2014 and 2015. Of those who received a bonus, 37% reported an increase with 20% reporting a decrease, little changed on 2015. We suspect that current bonus levels will not be sustained. Bonuses, whilst potentially a good way of retaining and motivating staff, are almost invariably an inefficient way of attracting them.

Bonuses are often non-contractual, often discretionary and may be paid on the basis of corporate or personal performance or a combination of the two. There can also be a qualifying period.

An issue with bonuses is that whilst a compliance professional entering the recruitment market who has benefited from a bonus may add it to their base salary in terms of what they earn, they are more inclined to discount bonuses when discussing expected salary. This goes some way to explaining

what can otherwise be relatively high increases in the base salaries achieved by compliance professionals moving between employers.

Bonuses vary considerably. From our survey, 15% reported they received a bonus in excess of 30% of their base salary and 2% received over 60%. The typical bonus that 34% of compliance professionals received was between 10% and 20%.

Pensions Given work-place pensions have now become mandatory, there is little point asking compliance professionals if they are entitled to an employer pension contribution. In 2016 we have therefore asked if their employer paid above the statutory minimum. 83% reported they did with an average employer contribution of 9.5%, which was little changed on 2015. Larger employers are generally more willing to pay higher contributions. The most common employer pension contribution, and the one received by 45% of compliance professionals, is 5-10% whilst 73% fell in the 5-15% range.

For new recruits, final salary pensions no longer exist in the private sector. Those who still benefit from these appreciate their value and the cost of giving them up to join a new employer can be prohibitively expensive. Pension schemes in the private sector are invariably money purchase where the employer commits to making a contribution based on a percentage of salary.

Whilst there can be a short qualifying period before contributions commence, work-place pension legislation requires all companies to enrol an employee in a pension scheme within three months of employment commencing. For those who elect to stay enrolled, minimum employer and employee pension contributions based on an employee’s salary are now mandatory. Most companies pay above these minimums based on a fixed percentage of an employee’s base salary. The employee may or may not be required to then match it. Frequently employers will be prepared to match additional contributions made by the employee, up to a fixed percentage. The percentage may increase with the age of the employee, their length of service and management status.

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Other benefitsCars or car allowances have become less common. They can still be expected where a role requires significant travel and also for senior hires. In terms of overall remuneration, a car allowance is frequently offered in lieu of a car and is often considered as non-pensionable salary when evaluating overall remuneration. A more common benefit for those working in London is a location allowance. This is a supplement for those working in London to cover the increased cost of either living in or commuting to London. The most valuable other benefit is Critical Illness Cover, which is expensive to provide and is usually restricted to senior roles. However, Private Health Insurance is common and is often extended to all immediate family members.

Life Assurance, usually linked to a pension scheme, is normal, as is payment of at least one professional subscription. Other benefits may include season ticket loans, gym membership, subsidised dental care, personal and accident insurance and staff discounts. These are generally low value benefits.

87% of compliance professionals reported they received other benefits in 2016 with an average value of £4,500. As was common with other areas of corporate governance, this was down from £4,700 in 2015. Managers are more likely to receive higher value benefits and larger companies are more likely to pay them.

Holiday entitlement The average holiday entitlement enjoyed by compliance professionals in 2016 was 26 days. The most common holiday entitlement was 25 days’ holiday (42% of those surveyed) with 60% reporting between 24 and 27 days’ holiday. Only 8% of compliance professionals receive less than 24 days and 5% over 30 days. Holiday entitlement, regardless of sector, is more likely to be enhanced by the number of years worked rather than seniority. As a strategy it represents a good way of rewarding loyalty and retaining staff but a poor way of attracting new employees.

An increasingly popular benefit is to provide employees with the opportunity to buy additional holidays. This is usually limited to an additional 5 days and would be purchased through salary sacrifice.

Flexible working Flexible working is the opportunity to vary your hours of work or to work from home and is clearly popular. 61% of compliance professionals reported that they benefit from some form of flexible working, which was no different from 2015. The results of our survey indicate that compliance professionals who have not changed job are more likely to benefit from flexible working. Our survey also indicates that there is no difference between men and women, although managers and those working for large companies are more likely to benefit. Over 67% of compliance professionals would like the opportunity to work more flexibly and this is a sentiment felt more strongly by women and those who have not changed job. Compliance professionals and other corporate governance practitioners make clear that flexible working is a highly valued benefit. In a competitive recruitment market, companies looking to recruit should be prepared to recognise this.

Employers are ultimately more concerned with output rather than simply attendance. Flexible working is an effective means of retaining staff and few employees, once they have benefited from it, would be prepared to give it up. We anticipate that this will ultimately become a more universal benefit.

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The composition of the sample ranged across all areas of compliance. Here are some key statistics:

Sample

p According to our survey, the proportion of women working in compliance has unexpectedly fallen

p A lower number of women responding to our survey have commenced working in compliance in the last two years

p Significant increase in respondents reporting they have management responsibility

p 61% of women describe themselves as managers versus 66% of men, a big increase on 2015

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4iiiGeneral Results

Q - Are you currently working?

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Small rise in proportion not working

p Percentage of compliance professionals not working has risen, but remains comparatively low

p As in 2015, no out of work compliance professionals have been looking for longer than six months

p 43% of out of work compliance professionals are finding it more difficult to find a new job than they anticipated, a significant drop from 57% in 2015

Q - How long have you worked in Compliance?

General findings

Significant increase in average level of experience

p The average compliance professional has worked in compliance for 9.9 years in 2016 v 8.9 years in 2015

p 46% of compliance professionals have worked in compliance for over 10 years

p London 9.8 years v 10.6 years rest of uK p Managers 11.1 years v non-managers 7.7 yearsp There is now no difference between the average

length of time men and women have worked in compliance

Q - Have you changed employer in the last 12 months?

Recruitment activity

Fewer compliance professionals report changing job

p Compliance professionals are less likely to have changed job in the last 12 months

p No material differences between men and women, managers and non-managers or between London and the rest of the uK

p Compliance professionals working in the insurance sector most likely to have moved, hedge funds and asset management least likely to have moved

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Q - What was your primary motivation in looking for another job?

p Career development remains the most important motivation although salary has become significantly more important

p Career development surprisingly important for managers

p Salary most important for non-managers

Career development still most important

Sub-group Career Development

Salary Work / Life Balance

Job Security

Men 50% 30% 16% 4%Women 62% 30% 4% 4%Managers 66% 19% 10% 5%Non-managers 39% 44% 14% 3%London 53% 33% 11% 3%Rest of UK 62% 20% 12% 6%Overall average 55% 30% 11% 4%

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Q - Which band best describes your base salary?

Salaries

Average base salary in survey £92,500

Sub-group Average Salary

Men £96,900Women £83,500Managers £103,300Non-managers £72,600London £95,200Rest of UK £81,700Investment Banking £99,800 Corporate Banking £104,400 Retail Banking £84,700Private Banking £94,600Hedge Fund £102,200Insurance £85,600Brokerage £87,200Consultancy £83,100 Compliance Monitoring £71,700Compliance Advisory £91,800Compliance Regulatory £87,500Group Compliance £124,500AML / Financial Crime £85,900Overall average £92,500

p Salary becomes more important for compliance professionals who would consider moving, particularly for women

p Career development is more important for compliance professionals outside of London than salary. Job security is also important outside of London

p No real difference in work / life balance between men and women

Q - If you were to look for another job or go for an interview what would be the most likely reason?

Sub-group Career Development

Salary Work / Life Balance

Job Security

Men 41% 39% 15% 5%Women 35% 48% 17% 0%Managers 39% 39% 18% 4%Non-managers 41% 49% 8% 2%London 37% 45% 16% 2%Rest of UK 46% 29% 17% 8%Overall average 39% 42% 15% 4%

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Q - Which best describes how your current salary compares to your salary in your previous role?

Average salary increase for job movers drops to 19%

p Average increase achieved by compliance professionals changing job was 19%, down from 21% in 2015

p No difference in the increase achieved between men and women

p Increases for non-managers at 24%, well ahead of 16% achieved by managers

p Increase for compliance professionals in London 20% against 18% outside of London

Sub-group Salary Increase 2015

Salary Increase 2016

Compliance Monitoring

12% 17%

Compliance Advisory 24% 20%Compliance Regulatory

24% 25%

Group Compliance 20% 17%AML / Financial Crime 24% 18%Overall average 21% 19%

Q - Which option best describes your salary increase in the last year?

Average salary increase for non-movers up to 8%

p Average salary increase up from 7% to 8%p Highest increase in corporate banking – 10.1%,

up from 8.1% in 2015

Sub-group Salary Increase 2015

Salary Increase 2016

Corporate Banking 8% 10%Retail Banking 7% 7%Private Banking 8% 6%Hedge Fund 8% 6%Insurance 4% 9%Brokerage 8% 6%Consultancy 12% 10%Compliance Monitoring

8% 7%

Compliance Advisory 8% 8%Compliance Regulatory

9% 8%

Group Compliance 10% 6%AML / Financial Crime 8% 9%Overall average 7% 8%

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Sub-group Paid Bonus 2016

Large companies 92%Medium sized companies 97%Small companies 81% Investment Banking 91%Corporate Banking 88%Retail Banking 83%Private Banking 93%Hedge Fund 96%Insurance 94%Brokerage 75%Consultancy 86%Overall average 89%

p Slight drop in the number of companies paying bonuses versus 2015

p Medium sized companies and hedge funds most likely to pay a bonus (nearly all)

Q - Does your employer pay a bonus?

BonusesBonuses still the norm

Q - Overall do you believe you are adequately compensated?

Decrease in satisfaction with remuneration

Sub-group Satisfied with renumeration

2016

Large companies 46% Medium sized companies 58%Small companies 64%Changed employer (12 months) 69%Not changed employer 48%Investment Banking 45%Corporate Banking 67%Retail Banking 51%Private Banking 64%Hedge Fund 56%Insurance 56%Brokerage 47%Consultancy 57%Compliance Monitoring 61%Compliance Advisory 52%Compliance Regulatory 48%Group Compliance 55%AML / Financial Crime 55%Overall average 54%

p Decrease in satisfaction with remuneration – down from 60% in 2015 to 54%

p Greatest satisfaction in corporate banking and small companies

p Lowest satisfaction in brokerage and large companies

p No real differences between men and women, London and the rest of the uK or between managers and non-managers

Q - Does your employer provide you with any pension benefits above the statutory minimum?

Pensions

Additional pension benefits almost universal

Sub-group %

Managers 83%Non-managers 83%Large companies 81%Medium sized companies 90%Small companies 71% Investment Banking 93%Corporate Banking 76%Retail Banking 77%Private Banking 79%Hedge Fund 82%Insurance 94%Brokerage 75%Consultancy 80%Overall average 83%

Q - Which of these as a percentage of your salary best describes your last bonus?

Level of bonuses remains high at 19%

p Average bonus remains at 19% - no change on 2015p Highest average bonus paid by hedge funds – 30%p Lowest bonuses in consultancy - 12%

Sub-group % Bonus 2016

Managers 22%Non-managers 13%Large companies 17%Medium sized companies 18%Small companies 23% Investment Banking 18%Corporate Banking 20%Retail Banking 14%Private Banking 15%Hedge Fund 30%Insurance 18%Brokerage 18%Consultancy 12%Overall average 19%

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Q - What is the approximate monetary value of any other benefits such as health, travel or car allowances?

Other benefits

Slight reduction in average value of other benefits

Sub-group value of Benefits

Managers £5,200Non-managers £3,200Large companies £5,800Medium sized companies £4,200Small companies £2,600Investment Banking £4,800Corporate Banking £6,000Retail Banking £5,600Private Banking £2,700Hedge Fund £3,800Insurance £4,300Brokerage £2,400Consultancy £4,800 Overall average £4,500

p Average value of other benefits £4,500 in 2016, versus £4,700 in 2015 and £4,800 in 2014

p value highest in corporate banking and large companies

p value lowest in brokerage and small companies

Q - What contribution to your pension as a percentage of your salary does your employer make?

Average contribution remains nearly 10%

Sub-group Contribution

Managers 9%Non-managers 10%Large companies 10%Medium sized companies 9%Small companies 9% Overall average 9.5%

p Average pension contribution in 2016 was 9.5%, identical to 2015

p Typical pension contribution in 2016 was 5-10%, received by 45% (40% in 2015)

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Q - Does your employer provide you with the opportunity to work flexibly to any significant level?

No change in flexible working

p No change in flexible working since 2015p No difference between men and womenp Flexible working highest in consultancy and retail

bankingp Changing job appears to reduce the likelihood of

flexible working

Sub-group Flexible Working

Men 61%Women 61%Managers 62%Non-managers 57%London 56%Rest of UK 76%Large companies 65%Medium sized companies 50%Small companies 57%Changed employer (12 months) 53%Not changed employer 63%Investment Banking 45%Corporate Banking 58%Retail Banking 74%Private Banking 57%Hedge Fund 54%Insurance 65%Brokerage 63%Consultancy 77%Overall average 61%

Q - What is your holiday entitlement?

Quality of life

Slight drop in holiday entitlement

p Average holiday entitlement has fallen from 27 days in 2015 to 26 days in 2016

p The most common holiday entitlement is 25 days, enjoyed by 42% of compliance professionals

p 60% of compliance professionals benefit from between 24-27 days

p Only 8% of compliance professionals have less than 24 days, but only 5% more than 30 days

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p Confidence greatest in brokerage and amongst non-managers and people who have changed job in the last 12 months

p Confidence weakest in insurance, consultancy and group compliance

Q - Do you feel more or less secure than a year ago?

How people are feeling

Reasonable confidence in job security

Sub-group More Same Less

Managers 18% 55% 27%Non-managers 32% 54% 14%Changed employer (12 months) 33% 44% 23%Not changed employer 20% 58% 22%Investment Banking 30% 47% 23%Corporate Banking 17% 75% 8%Retail Banking 23% 46% 31%Private Banking 23% 62% 15%Hedge Fund 20% 56% 24%Insurance 22% 39% 39%Brokerage 37% 42% 21%Consultancy 20% 56% 24%Compliance Monitoring 28% 39% 33%Compliance Advisory 24% 55% 21%Compliance Regulatory 22% 59% 19%Group Compliance 18% 51% 31%AML / Financial Crime 22% 64% 14%Overall average 23% 54% 23%

Q - Would you like the opportunity to work more flexibly?

Clear desire for even more flexible working

p Desire particularly strong from women and those working outside London

Sub-group Desire to Work Flexibly

Men 62%Women 75%Managers 66%Non-managers 68%London 64%Rest of UK 76%Changed employer (12 months) 58%Not changed employer 70%Overall average 67%

Q - What would you most like to change about your job?

Salary the most important issue

Sub-group Salary Work / Life Balance

Job Content Career Development

Job Security My Manager Recognition

Men 35% 19% 9% 21% 3% 5% 8%Women 36% 17% 11% 20% 2% 5% 9%Managers 35% 25% 7% 17% 4% 4% 8%Non-managers 34% 7% 14% 27% 2% 8% 8%Investment Bank 28% 19% 11% 25% 2% 3% 12%Corporate Bank 33% 12% 8% 37% 6% 4% 0%Retail Bank 45% 9% 9% 24% 6% 3% 4%Private Bank 38% 39% 3% 7% 6% 7% 0%Hedge Public Sector 37% 15% 6% 15% 3% 11% 13%Insurance 44% 19% 6% 12% 0% 6% 13%Brokerage 42% 15% 17% 17% 5% 0% 4%Consultancy 25% 29% 14% 17% 0% 0% 15%Overall 35% 19% 9% 21% 3% 5% 8%

p Although career development and work / life balance are important, salary is the key issuep Salary especially important to those working in retail banking, insurance and brokeragep Salary less important in consultancy, where work / life balance and recognition are more important factors

than in other specialisms

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Q - Do you feel your skills have become more or less valuable?

Strong consensus that value of skills is increasing

p Feeling about value of skills strongest amongst high earners and weakest amongst low earners

Sub-group More Same Less

Managers 74% 22% 4%Non-managers 63% 35% 2%Earning > £80,000 77% 21% 2%Earning < £80,000 26% 53% 21%Compliance Monitoring 69% 26% 5%Compliance Advisory 70% 28% 2%Compliance Regulatory 67% 21% 2%Group Compliance 74% 21% 5%AML / Financial Crime 72% 22% 6%Overall average 71% 25% 4%

Q - Do you think the market for your skills is improving or deteriorating?

Q - Do you believe you are adequately compensated?

Q - Are you satisfied with your current contract?

Q - When considering a new contract, what is the most important consideration?

Contractors in work

Q - Are you finding securing a contract more or less difficult than anticipated?

Q - Do you think the market for your skills is improving or deteriorating?

Contractors looking for work

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Barclay Simpson analyses the salary data that accumulates from the placements we make in the uK. This provides a guide to salaries for compliance professionals.

The salary ranges quoted are for good rather than exceptional individuals and take no account of other benefits in addition to salary, such as bonuses, profit sharing arrangements and pension benefits.

4ivSalary Guide

WHOLESALE BAnKInG & CApITAL MARKETS RAnGE AVERAGE

Compliance or Financial Crime Assistant £40 – 55,000 £50,000

Compliance or Financial Crime AvP / Manager £50 – 80,000 £65,000

Compliance or Financial Crime vP / Senior Manager £85 – 130,000 £100,000

Compliance or Financial Crime Director £100 – 170,000 £130,000

Head of Compliance or MLRO £140 – 250,000 £170,000

Global Head of Compliance / Financial Crime £170 – 300,000 £220,000

ASSET MAnAGEMEnT, HEdGE FundS OR pRIVATE EQuITY RAnGE AVERAGE

Compliance or Financial Crime Assistant £30 – 50,000 £40,000

Compliance or Financial Crime AvP / Manager £30 – 75,000 £65,000

Compliance or Financial Crime vP / Senior Manager £70 – 110,000 £95,000

Compliance or Financial Crime Director £95 – 140,000 £120,000

Head of Compliance or MLRO £110 - 160,000 £130,000

Global Head of Compliance / Financial Crime £120 - 250,000 £180,000

WEALTH MAnAGERS OR pRIVATE BAnKS RAnGE AVERAGE

Compliance or Financial Crime Assistant £30 - 45,000 £40,000

Compliance or Financial Crime AvP / Manager £45 - 65,000 £60,000

Compliance or Financial Crime vP / Senior Manager £60 - 90,000 £75,000

Compliance or Financial Crime Director £90 - 140,000 £120,000



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GEnERAL InSuRAnCE RAnGE AVERAGE







RETAIL BAnKInG, LIFE & pEnSIOnS And MORTGAGES - REGIOnAL RAnGE AVERAGE






RETAIL BAnKInG, LIFE & pEnSIOnS And MORTGAGES - LOndOn RAnGE AVERAGE






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Barclay Simpson is an international corporate governance recruitment consultancy specialising in internal audit, risk, compliance, security, business continuity, legal and treasury appointments. Established in 1989, Barclay Simpson works with clients in all sectors throughout the uK, Europe, Middle East, north America and Asia-pacific from our offices in London, new York, dubai, Hong Kong and Singapore.

We add value by using our unique focus on corporate governance, our highly experienced specialist consultants and access to both the local and international pools of corporate governance talent. Our strength lies in our ability to understand client and candidate needs and then to use this insight to ensure our candidates are introduced to positions they want and our clients to the candidates they wish to recruit.

For more in-depth coverage, comprehensive reports and compensation guides exist for the Internal Audit, Risk, Compliance, Security and Legal recruitment markets. These can be accessed from the links below.

We also produce other specialist reports, each of which can be accessed for free on our website: www.barclaysimpson.com

www.barclaysimpson.com/mid2016markettrends/auditwww.barclaysimpson.com/mid2016markettrends/riskwww.barclaysimpson.com/mid2016markettrends/compliancewww.barclaysimpson.com/mid2016markettrends/securitywww.barclaysimpson.com/mid2016markettrends/legal

ABOuT BARCLAY SIMPSON5Barclay SimpsonBridewell Gate, 9 Bridewell PlaceLondon EC4V 6AWTel: 44 (0)20 7936 2601Email: [email protected]

If you would like to discuss any aspect of the reports please contact the following divisional heads:

Corporate Governance Adrian Simpson [email protected] and IT Audit Tim Sandwell [email protected] Dean Spencer [email protected] Tom Boulderstone [email protected] Mark Ampleford [email protected] Jane Fry [email protected]

To discuss our international services please contact:Europe Tim Sandwell [email protected] East Chris L’Amie [email protected] Pacific Russell Bunker [email protected] America Daniel Close [email protected]

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Documents

Compensation and Market Trends Mid-Year Report 2016 … TRENDS REPORT 2016 COMPLIANCE CONTENTS Welcome to Barclay Simpson’s 2016 Compliance Compensation and Market Trends Report