"The key is for the family to be sure they are incenting the behaviors that lead to the desired results they want to achieve."
Chicago, IL (PRWEB) May 29, 2012
Linda Mack, founder and president of Mack International, a premier retained executive search and strategic family office/human capital management consulting firm specializing in the family office/wealth management industry, was a featured speaker/panelist at the recent SkyBridge Alternatives (SALT) Conference, held May 7 -11, 2012 in Las Vegas, Nevada.
The SkyBridge Alternatives (SALT) Conference is committed to facilitating balanced discussions and debates on macro-economic trends, geo-political events, economics and alternative investment opportunities within the context of a dynamic global economy. The event welcomed more than 1,800 thought leaders, public policy officials, business professionals, and investors from over 26 countries and 6 continents. SALT Conference 2012 keynote speakers included such luminaries as Al Gore, 45th Vice President of the United States and Nobel Laureate, Dr. Robert Gates, former secretary of defense (2006-2011) and Sarah Palin, Former Governor of Alaska.
Over the course of four days, attendees participated in more than three dozen panels, speeches and breakout sessions that addressed a variety of salient issues and topics from multiple perspectives.
On Wednesday, May 9, 2012 Linda Mack spoke on a panel entitled "The Compensation Conundrum: A Discussion on Attracting and Retaining Family Office Personnel." Moderated by Tami Kautzman, Director at Rothstein Kass, fellow panelists included Hannah Grove, Author, "The Family Office: Advising the Financial Elite” and Scott Svenson, Chairman and Chief Executive Officer of Freestone Capital Management.
Linda Mack highlighted a variety of market trends in compensation; specifically focusing on long-term incentive plans evolving in the market. “To best achieve success, it is critical that the compensation plan structure and incentives are aligned with the family’s values, investment risk philosophy and overall objectives in terms of what they are trying to accomplish,” said Mack. “This includes ensuring that performance expectations and metrics to measure success are clearly defined and customized to the specific family objectives,” she added.
Mack added, “Incentives are very effective at driving behavior. The key is for the family to be sure they are incenting the behaviors that lead to the desired results they want to achieve. We strongly recommend families test their expectations, structures and metrics against the full spectrum of scenarios to understand how their plans may perform. This process can help uncover where they will work in real practice as anticipated, and where they may not – helping to avoid a bad surprise.”
Mack discussed examples of structures and plans that worked well and those that did not, reinforcing the necessity of careful planning and scenario-testing in order to better anticipate how a plan may behave in a windfall up market and in a down market.
“Overall we are seeing more results-driven, performance-based and clearly documented plans being used by family offices,” said Mack. “We know how important it is that plans are documented and explicitly understood by all parties to minimize opportunity for ‘misunderstandings,’ especially if a transition occurs as the result of a death or other circumstances.”
The panel also explored the results of a recent survey by Rothstein Kass and Russ Alan Prince on how single-family offices should compensate their executive directors. Hannah Grove provided a preview summary of the findings including some specific compensation numbers. The survey results reflect how the employee versus the participant compensation models, or “segments,” tend to result in significant differences in the compensation outcome for the executive directors.
Following the panel's formal remarks there was an interactive dialogue with the audience about a number of questions, challenges and the trends discussed.
Mack International LLC, headquartered in Chicago, is a global, strategic consulting and retained executive search firm specializing in the family office/wealth management industry on a national and international basis. For more information, visit http://www.mackinternational.com or call 800.976.0015.