Linda Mack of Mack International participated in a breakout session on 'Single Family Office Compensation' at the Align Family Office Conference held in Chicago, June 12-13, 2024.
WEST PALM BEACH, Fla., July 13, 2024 /PRNewswire-PRWeb/ -- Linda Mack of Mack International participated in a breakout session at the Align Family Office Conference held in Chicago, June 12-13, 2024. This was the inaugural event for Align, Family Business Magazine's Family Office Conference. The agenda was designed to help family offices navigate issues to ensure alignment on wealth management strategy, governance and succession plans, and the family legacy. The conference was a two day, in-person event connecting sponsors to a Family Office audience through thought leadership and face-to-face engagement.
Linda joined Kevin Michalzuk, Private Wealth Advisor and Executive Director of Morgan Stanley Private Wealth Management for the presentation. Their topic was 'Single Family Office Compensation.' An outline of the discussion questions included key findings from the 2023 Botoff-Morgan Stanley compensation survey, challenges Family Offices face in attracting and retaining top talent, and best practices regarding compensation and talent strategies.
Several highlights of the survey included:
- Executive compensation is highly correlated to the size, scope and complexity of the Family Office
- 80% of family offices utilize annual incentives and/or bonus plans and 60% incorporate formalized metrics and objectives into annual plans.
- The use of LTI plans continues to grow and increases with AUM. 59% report utilizing LTI plans: 47% of firms less than 1 billion AUM and 72% of firms more than 1 billion AUM
Families adopting a variety of Long Term Incentive plans focus on aligning goals and performance while promoting employee retention. The most frequently used LTI vehicles in the market are deferred compensation, co-investment, and carried interest—with many families using more than one.
Linda shared several examples of how families are addressing LTIs and stressed the importance of ensuring that plans are aligned with family objectives. "Incentives drive behavior and families need to be sure the plans they design will drive the behavior that will enable them to achieve their objectives. There is continued acceleration of LTIs due to competition in the marketplace and the increasing influx of compensation practices from institutional markets into the private and family office markets," noted Linda. The survey underscored increased competition for talent and compensation premiums. More than half family offices reported recruiting challenges across the board. In fact, family offices have increased salaries and bonuses at a rate higher than the broader U.S. market due to the competitive market.
Aside from direct compensation, remote and hybrid work arrangements are no longer a temporary response to the pandemic. According to the survey over 75% of offices are offering some type of flexibility, with most staff in the office 3 days per week. "Most family offices we know continue to prefer people being in the office. Families believe in teams working together in person to promote and maintain a strong culture, and stress the importance of leaders being in the office to foster this," said Linda.
Linda emphasized that best practices in recruiting and retention strategies have fundamentally remained consistent. "We continue to stress the importance of having a clear business mandate, providing resources needed to accomplish objectives, authority commensurate with accountability, competitive compensation aligned with family values and objectives, and sound governance and succession planning. There are no short cuts, and it can be challenging, but the return is definitely worth it". Linda urges families to seek expert compensation advice from a consultant like Trish Botoff in designing their compensation plans to optimize effectiveness.
" We are seeing a consistent increase in the use of long term incentive programs and expect this trend to continue in the future. The type of LTI vehicles used will depend upon each family's philosophy and approach and careful design to ensure that incentives are aligned with family objectives."
A copy of the full survey was made available on the conference app.
About Mack International LLC
Mack International is the premier boutique firm that specializes in providing retained C-suite executive search and strategic human capital consulting solutions to family office, investment firm and enterprise clients on a national and international basis. Clients range from first generation business enterprise owning wealth creators through multi-generational families of six or more generations. Headquartered in West Palm Beach, Florida, clients also include multi-client family offices and select investment and wealth management firms that serve family offices and ultra-high net worth clients. In addition to its executive search services, Mack International provides customized strategic human capital/talent management consulting solutions. The scope of consulting services includes succession planning, governance, next generation engagement, compensation practices, and performance metrics.
Media Contact
Isabel Bolt, Mack International, 8173015461, [email protected], www.mackinternational.com
SOURCE Mack International
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