What does your corporate governance salary look like in 2017?

Salaries are on the rise in the UK, with the latest Office for National Statistics data showing 2.2 per cent growth in the year up to April 2016. This was the joint-largest increase since the global financial crisis in 2008, bringing Brits’ average gross weekly earnings up to £539 per week, or roughly £28,000 a year.

 

But how are corporate governance salaries performing in the current economic climate? The latest Barclay Simpson Market Reports provide new insights regarding corporate governance incomes across the internal audit, compliance, security and resilience, risk management and legal industries.

 

Here are some of the current trends highlighted in our recent reports.

Internal audit

The majority of respondents in our surveys revealed that their salary increased between 2015 and 2016, but the biggest rises were seen in those who decided to change jobs. New recruits saw their earnings jump 16.1 per cent, compared with the 5.5 per cent for people who remained with their existing firm.

 

Salaries are typically highest at head of audit positions within the insurance, asset management and investment and retail banking sectors. For example, managing directors of general audit at investment banks in London command salaries nearing £180,000.

 

As we head deeper into 2017, inflation could have an unsettling impact on internal audit recruitment. In 2016, 15 per cent of internal auditors claimed their salary didn’t increase, and many could be in the market for a new job if the situation continues.

Compliance

Salary increases across compliance positions averaged 19 per cent for those who changed jobs in 2016, while people who stayed in their existing role saw take-home pay climb 7.5 per cent. However, salary pressures remained very sector-specific last year, with banking wages plateauing as recruitment slowed.

 

Organisations recognise the importance of offering substantial remuneration packages for senior hires in order to attract the right candidates and appease investors. Global heads of compliance and financial crime can earn circa £300,000 annually at wholesale banking and asset management firms.

 

Again, inflation will have an impact on salary satisfaction, with many compliance professionals expecting nominal increases to maintain real earnings. Candidates who want the highest variable compensation and long-term incentives may be tempted into the private equity sector this year.

Security and resilience

Security professionals who chanced the recruitment market last year could expect an average 16 per cent increase on their previous salary – considerably more than the 4.9 per cent for those who remained where they were. In fact, 25 per cent of respondents said their salary didn’t rise at all last year.

 

This may be because 80 per cent of security departments believe salary demands for required roles were either excessive or higher than expected. Wage pressures were particularly noticeable across information security positions.

 

Nevertheless, businesses may not have much wriggle room when it comes to undercutting market rates for salaries. We predict expectations to rise even further in 2017, and even good career development opportunities and work-from-home flexibility may not be enough to entice candidates if salaries aren’t competitive.

Risk management

The gap between salary increases for those who moved jobs and people who stayed with current employers was smaller for risk management professionals than most other corporate governance roles – 17 and 8 per cent, respectively. Meanwhile, only 14 per cent of risk management departments believe current salary expectations are excessive.

 

We believe the reason is that risk managers are managing their expectations better in the post-Brexit economy. While the impact of the EU Referendum was lower than expected, the industry has remained vacancy-led rather than candidate-led.

 

Currently, the highest-paid positions are for heads of market risk in corporate investment banking at approximately £400,000. Chief risk officers and heads of investment risk within asset management firms are averaging salaries of £300,000.

Legal

Like risk managers, in-house lawyers didn’t receive as much of a salary increase from switching organisations as other corporate governance professionals. Staying with the same employer netted people a 5.9 per cent wage increase on average last year, but moving elsewhere saw salaries jump 13 per cent.

 

Wage pressures were already subsiding for the in-house legal sector prior to the EU Referendum, and they have continued to ease further. Our research revealed few businesses were willing to go beyond their advertised salary maximums and surpass employment budgets, except in smaller legal departments where general counsel had significant control and a preferred candidate.

 

Salary expectations among lawyers often vary depending on their point of origin. Those moving between in-house departments often want better remuneration, while lawyers previously practising privately may be more interested in negotiating working hours and control over their workloads.

 

Our Market Reports combine our review of the prevailing conditions in the corporate governance recruitment market together with the results of our latest employer survey.

 

Image: domoskanonos via iStock