The Value of Ethics & Compliance Officers

Salary.com and the Ethics Officer Association (EOA) have announced the results of the 2005 EOA Survey of Ethics & Compliance Officer Jobs. The results of the survey indicate an increase in the value of ethics and compliance officers as gauged by their compensation. For top global ethics and compliance executives, total compensation approaches $750,000.


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“Today, our compensation team answers more questions about ethics and compliance jobs than any other profession, which validates the significance of the job title within corporate America today,” Joseph Kilmartin, Director of Surveys at Salary.com said in a statement announcing the results. “It is likely that the ethics and compliance profession will become more important in the years to come with stricter corporate governance in place.”

The increased focus on transparency and responsibility in the post-Sarbanes-Oxley world requires companies to establish written policies and procedures designed to prevent violations of federal securities laws. Companies must also name a compliance officer to monitor, update and report on these policies and procedures annually. The exact role of the Chief Compliance Officer (COO) has not been fully defined by either Sarbanes-Oxley or subsequent regulations or guidance from regulatory authorities.

“This comprehensive survey is another sign of the EOA’s leadership bin better defining our profession,” said Patrick Gnazzo, Senior Vice President, Business Practices & Chief Compliance Officer. “With the current demand for experienced ethics officers, corporate Human Resource organizations will benefit greatly from the data collected in this survey.”

The Executive Summary of the survey describes ethics officer pay practices to be fairly consistent and not dependent on the size, location or industry. Salary.com’s analysis also reveals that the salaries of top ethics and compliance officers are comparable to that of of a Chief Information Officer and include significant amounts of long-term incentives including non-qualified stock options, incentive stock options and restricted stock.

The survey notes that almost 79 percent of Top Global Ethics and Compliance Executives possess a Juris Doctor or Master’s degree and nearly 70 percent have more than ten years of experience. Among Top Domestic Ethics and Compliance Executives, 63 percent possess a Juris Doctor or Master’s degree and more than 51 percent have more than ten years of experience.

According to the panel of speakers who addressed the Compliance & Regulatory Affairs Conference of the National Association for Variable Annuities, there are areas where the jurisdiction of the CCO, corporate legal counsel and internal auditor seem similar. John Walsh, Associate Director and Chief Counsel for the Securities and Exchange Commission’s (SEC) Office of Compliance, Inspections and Examinations points out, however, that these “neighbors to compliance” do not cover the full scope of the CCO’s role.

“If the Federal Sentencing Guidelines issued in November 1991 created the ethics profession, Sarbanes-Oxley created an entire industry,” Keith Darcy, the Executive Director of the EOA said in the statement announcing the results. “The new standards of doing business, introduced by legislators, regulators and prosecutors over the past several years have made the skills and experiences necessary to manage these risks by ethics and compliance officers much more important. The survey by Salary.com comprehensively addresses the compensation migration in the ethics and compliance community.”

The survey can be ordered through the EOA web site at www.eoa.org.

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