FPL Advisors, led by Bill Ferguson and Michael Herzberg, have just released their latest global business update which highlights how industry compensation levels lose some of their recent froth in the ongoing market adjustment.

No surprise, FPL compensation studies indicate private companies will have an "increasingly difficult" time generating "the outsized returns associated with long-term incentive programs vis a vis project/equity participation" compared to the past several years. Since public company shares turned negative last year, equity grants, largely predicated on shareholder performance, will "slow" and "decrease." But the good news is "cash bonuses remain sound," given continuing strong operational performance.

Budget strictures should limit overall base salary increases to about 3.5% to 4% for all employees, according to FPL analysis.

Although the job market on the debt side of the business has stalled, FPL reports recruiting activity has remained generally positive across all international regions, especially in Asia which experiences a continuing "shortage of Western-trained talent." The U.S. "remains surprisingly active", despite a "slowdown" in finance and development sectors. Europe has been hit harder, especially London. But the UK capital has also been buoyed somewhat by its pivotal role in global growth markets.

Interestingly, the Middle East emerges as the most active user of executive search, according to FPL -- Israeli developers expand into new markets and Arab Gulf states look to invest more capital worldwide.

View a pdf of the full FPL report below.

Download 2008GlobalBusinessUpdate.pdf (276.4K)

(Miller Ryan has an affiliate relationship with FPL)

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Less frothy industry compensation outlook

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