Ethics & Compliance Officers Still Valued in American Corporations

The results of the 2006 Ethics & Compliance Officer Association (ECOA) Compensation Survey are in and findings indicate pay for the top ethics position continues to grow. The survey, conducted by Salary.com and the ECOA, found compensation increased more than 12 percent over the previous year, clearly signaling continuing organizational support for the efforts to keep companies “clean” and scandal-free.


Advertisement


Thousands of executives with financial reporting responsibilities use the Comperio on-line library to access the type of information and interpretive guidance PricewaterhouseCoopers' own professional audit staff use around the world. Key content areas include guidance from the FASB, EITF, PCAOB, SEC, and others as well as PwC's interpretive guidance. Get more information and sign up for a complimentary 30-day trial.


“Organizations are increasingly recognizing the importance of their ethics and compliance office, not just in a time of crisis, but as an integral part of day to day business,” said Keith T. Darcy, executive director of the ECOA, expressing no surprise in the findings when announcing them. “As a result, in addition to increasing compensation, organizations are encouraging their ethics and compliance employees to continually develop their skills through training and education programs. Never before have organizations seen the value in the work of the ethics and compliance officer as they do now.”

Salary.com analysis of the survey data reveals that top ethics executives are receiving compensation comparable to other executive-level jobs and are receiving significant amounts of long-term incentives, including stock options, non-qualified stock options and restricted stock. For instance, top global ethics and compliance executives earn a median annual salary of $206,800, median total cash compensation of $285,000 and median long-term incentives of $132,100. Top domestic ethics and compliance executives, meanwhile, earn a median annual salary of $180,600, with a median total cash compensation of $202,300 and median long-term incentives of $81,600. Finally, corporate ethics and compliance managers earn a median annual salary of $120,000, with median total cash compensation of $133,00 and median long-term incentives of $45,000.

The 2006 survey does indicate that the average amount of long-term incentives has actually declined, perhaps because last year’s high grants reflected hiring awards which are typically higher than annual awards. Stock options remain the most popular long-term incentive vehicle, however, the survey indicates that Full Value Shares (stock bonuses, restricted stock, performance shares and performance units) are increasing in prominence.

“With every corporate scandal, it seems we receive more calls about Ethics and Compliance Officer compensation,” Joseph Kilmartin, director of surveys at Salary.com explained. “Bad news seems to prod companies to act. This alone increases the demand for Ethics and Compliance professionals. Everyone wants to avoid a scandal, so they want to hire the very best candidates.”

Compensation levels for ethics and compliance positions continue to remain relatively consistent – not varying greatly by organization size, industry or geographic location, although compensation levels do tend higher in the Northeast region and specifically in New England. Ethics and compliance executives in the New York Metropolitan area earn total cash compensation that is well above the national medians. Total compensation in the government and not-for-profit sectors remain significantly below the national medians.

Survey results are based on data from 139 participating organizations, including some of the largest and most well known organizations in the world. Ninety-six respondents were from public corporations, 26 worked in private corporations, 10 were in not-for-profit organizations and seven worked in governmental entities. Among participants, 24 reported revenues exceeding $20 billion and 32 reported having more than 35,000 employees.

“From Enron and WorldCom, to the latest scandal regarding stock options, the risks to corporate reputation and shareholder value are enormous,” Darcy noted. “The ethics and compliance profession has become an essential and integral function in managing risk. Ethics and Compliance Officers are the guardians of corporate integrity, and their continuing value is clearly reflected in their increased compensation.”

A copy of the full survey and results can be ordered online through the ECOA web site at www.theecoa.org.

You may like these other stories...

Event Date: September 11, 2014, 2pm ETThis webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities. DOWNLOAD THE SLIDE DECKDOWNLOAD THE...
Event Date: August 26, 2014, 1pm ETThis webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates  for non-public, non-governmental entities. DOWNLOAD THE SLIDE...
Event Date: August 19, 2014, 2 pm ETThe process for taking the Uniform CPA Exam continues to improve and evolve.   Amber Setter will share her expertise to prepare candidates and their employers for licensure...

Already a member? log in here.

Upcoming CPE Webinars

Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.
Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.