Incentive Compensation
Incentive compensation is one of many mechanisms that a bank can use to drive the behavior of its employees and promote a clear and consistent culture. Many institutions have difficulty balancing the different financial and non-financial goals they are pursuing and implementing an incentive structure that is in line with these.
SunGard can help. SunGard’s Ambit Risk Consulting provides a practical solution to the (re-)development of a bank’s incentive compensation.
Features
- Facilitates identification of the bank’s risk appetite and, within that context, work through the tradeoffs that it will need to make between risk-adjusted NIM, ROA, ROE and growth targets
- The decision on what trade-off to make is informed by studies on what the markets value. Once an achievable set of these targets are chosen, these are integrated into employee incentive schemes.
Benefits
- Formalizes the bank’s risk, return and growth objectives
- Makes risk, return and growth objectives consistent throughout the various functions of the bank and aligns them with the long-term interests of its stakeholders
