Driving Accountability in Incentive Compensation Governance


compensation-7-17-19.pngI once flunked a math test because I didn’t show my work. Turns out, showing your work is important to both math teachers and bank regulators.

To drive accountability, it is important to document and “show your work” when it comes to governance of incentive compensation plans and processes. The largest banks, due to increased regulatory oversight, have made significant strides in complying with regulators’ guidance and creating robust accountability. Here are some resulting “better practices” that provide food for thought for banks of all sizes.

While the 2010 interagency guidance on sound incentive compensation policies is almost a decade old, it remains the foundation for regulatory oversight on the matter. The guidance outlined three lasting principles for the banking industry:

  • Provide employees incentives that appropriately balance risk and reward.
  • Create policies that are compatible with effective controls and risk management.
  • Support policies through strong corporate governance, including active and effective oversight by the organization’s board of directors.

Most organizations used the release of the 2010 guidance to take a fresh look at their incentive plans. It proposed a non-exhaustive list of risk-balancing methods, such as risk adjustment of awards and deferral of payment. Many banks changed their plan structures and provisions to increase sensitivity to, and better account for, risk. The changes made sense pragmatically but largely addressed only the first principle.

After the financial crisis, boards were expected to engage in the oversight and review of all incentive arrangements to ensure that they were not rewarding imprudent risk taking. However, most institutions quickly realized it was not practical for directors to be in the weeds of all their broad-based incentive plans and thus delegated that task to management.

Compensation committees outlined expectations for senior management regarding incentive plan creation, administration and monitoring in a formal document. Their expectations would include, for example, the process for reviewing incentive plan risk.

Comp, Risk Committees Cooperate
Banks also developed stronger communication or information sharing between the compensation and risk committees of the board. This was sometimes accomplished through cross-pollinating members between the committees or conducting joint meetings on the topic. It also became standard for the chief risk officer to participate in compensation committee meetings and present on incentive compensation risk, as well as the overall risk profile of the organization.

Incentive compensation review committees, made up of the most-senior control function heads such as the chief financial officer, chief human resource officer, general counsel and chief risk officer, are often delegated primary oversight responsibilities. To create accountability, this management committee operates under a formal charter, oversees the entire governance process, provides for credible challenges throughout and annually approves all non-executive plans. A summary of their activities and findings is presented to the compensation committee annually, at minimum.

Working groups representing various business lines and broad control functions support the management committee in actively monitoring incentive compensation plans. Every activity in the governance process—from plan creation or modification to risk reviews and back-testing—has a documented process map with roles and responsibilities.

These large bank practices might be overkill for smaller organizations. However, some level of documentation and process formalization is a healthy process for any size. My advice: Don’t get fixated on the red tape, as proper governance and controls can be scaled to the size and complexity of each individual bank.

Formalize the Process
The second and third principles of the 2010 guidance are aimed at driving greater accountability and efficient oversight, including enhanced information sharing. Formalizing the process simply helps to crystalize expectations for those involved and safeguards against the dodging of responsibilities.

Plus, regulators—just like that math teacher—want to see the work. It’s not enough to simply have the right answer. You must be able to document the process you went through to get there.

Compensation Strategies to Attract, Retain and Motivate Millennials


compensation-9-18-17.pngDistinguishing between retirement plans for a bank’s older executives and other key high performers and shorter-term incentives for its younger millennials, who are the bank leaders of the future, continues to be an important strategy for boards of directors. Compensation committees are willing to provide some type of mid-term incentive plan as a retention strategy focused on their younger workers. Boards also want to have both short- and long-term, performance-driven plans in place that are aligned with shareholder interests and retaining their key officers.

As with most employees, effective compensation plans and performance management programs can help attract, retain and motivate millennials. Providing a competitive base salary may not be at the top of their priority list, but certainly being rewarded for performance is important.

The next generation of leaders have been impacted by the recession, both from watching their relatives endure job loss and financial stress and from experiencing the post-recession economy directly. They are also the largest group carrying student loan debt. As a result, money is very important to them and while they may not be worrying about retirement, they are focusing on shorter term financial needs.

While millennials have essentially the same financial needs as the generations preceding them, their time horizon to retirement can be 30-plus years or more, which is too far into the future for them to focus on when faced with immediate financial planning decisions, like retiring student debt, purchasing a home and providing for their children’s education.

Nonqualified benefit plans including deferred compensation plans can be an effective tool for attracting and retaining most key bank performers—both those focused on retirement as well as more interim financial needs—because of their design flexibility. According to the American Bankers Association (ABA) 2016 Compensation and Benefits Survey, 64.5 percent of respondents offered some type of nonqualified deferred compensation plan for top management (chief executive officer, C-Level, executive vice president).

For this next generation of leaders, boards should consider a type of plan that allows for in-service distributions timed to coincide with events such as a child entering college. Plan payments made to the participant while still employed can be made at some future point such as three, five or 10 years.

These plans could be used in lieu of stock plans with a similar time duration and are important to younger leaders looking to shorter, more mid-term financial needs in a long-term incentive plan. Plans with provisions linking plan benefits to the long-term success of the bank can help increase bank performance and shareholder value as well as to reward key employees for longer-term performance. Defined as either a specific dollar amount or percentage of salary, bank contributions are discretionary or dependent on meeting budget or other performance goals. Interest can be credited to the account balance with a rate tied to either an external index or an internal index such as bank return on equity.

The plan can also include a provision that the account balance, or a portion thereof, is forfeited if the key employee goes to a competitor. In addition, it is typical to see events such as a change in control or disability accelerate vesting to 100 percent.

Let’s look at two examples, one for a retirement-based plan and the other for an in-service distribution to help pay for college expenses.

Assume that the bank contributes 8 percent of a $125,000 salary for a 37-year-old employee each year until age 65. At age 65, the participant will have $1,370,000 in total benefits, assuming a crediting rate equal to the bank’s return on assets, with an annual payment of $130,000 per year for 15 years. This same participant could also have had part of the benefit paid for out via in-service distributions to accommodate college expenses for two children. Assume there are two children ages three and seven and a desire to have $25,000 per year distributed for four years, for each child. Thus, these annual $25,000 distributions would be paid out when the employee was between the ages of 49 and 56. The remaining portion available for retirement would be an annual benefit of $78,000 for 15 years beginning at age 65.

Regardless of the participant’s distribution timing goals, both types of defined contribution plans can be tied to performance goals. The bank contribution percentage to each participant’s account could be based on some defined performance goal. Again, the ABA’s 2016 Compensation and Benefits Survey results showed that bonus amounts were based on several factors including: 85.6 percent bank; 74.9 percent individual; and 26 percent department/group. Aligning the bank’s strategic plan goals with the participant’s incentive plan provides a better outcome for both shareholder and participant.

In addition, many banks have implemented defined benefit type supplemental retirement plans as a way to retain and reward key executives. These plans can also be structured as performance based plans.

Regardless of a participant’s time horizon, it is important to reward both your older and younger leaders with compensation that is meaningful to them and will help them accomplish their personal financial objectives, while balancing the long-term interests of shareholders.

Managing Today’s Compensation Risk



Regulatory attention on incentive compensation is heightened following the Wells Fargo scandal, posing a greater burden to boards and management teams. Todd Leone and Gayle Appelbaum of McLagan, part of Aon plc, explain what tools banks should use to mitigate compensation risk and the questions boards should be asking about incentive compensation arrangements.

  • Increased Scrutiny on Compensation Plans
  • Tools to Mitigate Compensation Risk
  • Questions to Ask About Incentive Compensation
  • Balancing Compensation Risk with Attracting Talent

Surging Stock Prices and Your Long-Term Incentive Strategy


incentive-3-6-17.pngWith the Trump administration, investors are anticipating an easing in banking regulations and modest increases in interest rates. Accordingly, the market response to Trump’s election sent bank stock prices surging. From election to year-end, the Keefe, Bruyette & Woods NASDAQ Banking Index, which is made up of money center banks, as well as regional banks and thrifts, was up 22 percent, alongside a very strong 7 percent increase in the S&P 500. Full year returns were even better, and they were better for many smaller banks as well. For example, banks with total assets between $1 billion and $10 billion saw returns of 20 percent to 65 percent.

In our experience, large swings in stock prices trigger important design considerations for long-term incentive grant strategies and grant policies.

Long-term Incentive Strategies—Target Value Versus Fixed Share
Long-term incentive strategies among banks typically incorporate the use of full-value awards, such as restricted stock or performance shares, or stock options.

There are two common approaches used to determine the number of shares granted under equity awards—a target value approach and a fixed share approach.

  • Target value approach: The bank targets a specific award “fair value.” Thus, as stock prices surge, the number of shares granted is reduced to deliver the same grant value. Conversely, when stock prices decline, more shares are granted. This is the most common method for determining the number of shares awarded.
  • Fixed share approach: The bank targets a specified number of shares. Thus, as stock prices surge, the fair value of the award also increases. The volatility in grant value is one of the reasons this approach is less common.

No matter the approach used, sudden surges in stock prices will result in significant changes in either the number of shares granted or the fair value of the award, assuming no adjustments are made to the grant strategies. For example, the increase in stock prices over the past year for banks with assets between $1 billion and $10 billion will likely result in a 16 to 40 percent decline in shares delivered through a target value approach or a 20 to 65 percent increase in fair values at banks utilizing a fixed share approach.

The advantages in delivering equity through a target value approach include providing tighter controls over the accounting expense of long-term incentive programs, a clearer understanding of the award value to the participant, greater consistency in disclosed compensation values for proxy-reported officers, and maintaining alignment with competitive market compensation levels. However, when stock prices surge, no matter the cause, the resulting reduction in shares under a target value approach may be perceived as a so-called performance penalty by participants. Your participants in the plan might wonder, “The stock price went up and you cut my shares?”

Alternatively, under the fixed share approach the increase in the fair value of the award may result in higher compensation expense, greater variability of disclosed compensation, and compensation levels that are positioned higher relative to the market than the bank’s stated compensation philosophy.

Considerations
In light of the potential variability in grant values or the number of shares issued, banks should thoroughly review the impact of recent stock price changes on their long-term incentive grant strategies to avoid unintended consequences.

Target value programs can be adjusted through an increase in the value delivered or revisions to the approach used to determine shares, or a combination of these two approaches. Generally, an increase in the value delivered would not correspond directly with the increase in stock price, for example award values would increase 20 to 30 percent of the gain in stock price. In adjusting the approach used to determine the number of shares issued, banks can use an average stock price (for example, 90 to 150 days) rather than the price on the date of grant.

Conversely, fixed share programs would be adjusted to reduce the grant value through a reduction in the number of shares issued. For example, shares granted would be reduced by 10 percent to 15 percent of the gain in share price.

In all cases, the impact of adjustments to long-term incentive strategies on total compensation should be evaluated against market compensation and share utilization levels as well as the bank’s stated compensation philosophy. Further, the rationale for adjusting long-term incentive strategies should be communicated clearly to program participants.

Banks Make Changes Following Wells Fargo Crisis


incentive-12-16-16.pngIt seems almost everyone with a bank account knows the story: a relatively small group of people within a large organization committed fraud by opening unapproved customer accounts in order to earn performance bonuses under a production-based incentive plan. The scandal badly bruised the bank’s stellar reputation, forced the CEO to step down, and resulted in a significant loss of shareholder value, before the election turned the tide for many bank stocks.

It has also prompted a widespread industry examination of retail incentive practices. Whether it is through the OCC’s horizontal review of sales and marketing practices or board requests at smaller community banks, the industry is taking a look at both the cultural aspects of sales expectations and the design and controls of the programs themselves.

In November 2016, Pearl Meyer conducted a survey of actions banks are taking to address the potential issues uncovered by the scandal. This study included 57 respondents representing both small and large institutions across the country. The key outcomes indicate that four out of five banks have had an internal or external inquiry regarding their retail incentive plan practices. Most banks are unlikely to make significant changes to their retail incentive plan design and instead are focusing on communication and training as well as enhanced documentation, controls and monitoring.

The aftermath of the Wells Fargo scandal will be that banks are expected to examine their retail incentive programs and the controls supporting them. To that end, we believe there are five questions that banks should ask and answer with respect to their retail incentive programs.

What does our plan reward? About half of respondents to our bank survey indicated using volume metrics and cross-selling metrics (55 percent and 47 percent respectively), which have been criticized as a part of the scandal. However, few are planning to discontinue these metrics (6 percent to discontinue volume and 4 percent to discontinue cross-selling). Use of either metric may put additional pressure on banks to demonstrate how their controls and administrative procedures curtail fraud or misconduct.

Approximately 70 percent of respondents use growth metrics and 34 percent use profitability or revenue, which are much more difficult to manipulate. Nearly one-third have a discretionary component for branch or individual performance that can help reinforce positive behaviors and “right size” awards.

How is our plan monitored? Participants received inquiries from executive management (72 percent) and their boards (51 percent) who may be unfamiliar with the specific details of the retail incentive programs. Banks are addressing the additional oversight through increased monitoring and controls (46 percent) and greater reporting to senior management or the board (42 percent). Reporting elements need to remedy the fact that boards have a responsibility to ensure the bank’s incentive compensation arrangements do not encourage inappropriate risk. Directors often have no visibility into retail incentive plans, have no easy way to quickly understand the impact, do not know what their rights or authority are in understanding, determining, and remedying the risk, and have no plan for how to react. These issues need to be addressed to appropriately monitor the risk.

Are our expectations reasonable? The last element of reporting—how many employees are meeting performance goals—can identify unreasonable expectations or flag the need for better training or management. Collecting performance data over time to see trends in performance, expectations and payouts may also prove useful.

What are our customers experiencing? More than a quarter of respondents indicated that they will develop or enhance their customer complaint process. The process should not only handle specific complaints but also aggregate the complaint types to identify systematic breakdowns in the customer experience.

Are we staying true to our values? Critics have indicated that perhaps the largest failing at Wells Fargo was an environment where branch staff feared that nonperformance would result in job loss. Monitoring of employee satisfaction by business line and mechanisms to provide feedback without repercussions can help identify problems before they escalate.

Given the large-scale publicity of the Wells Fargo scandal, someone—customers, employees, regulators, or shareholders—will likely ask how your retail incentive program is different and what you have done to protect against fraud or misconduct. Accordingly, banks should conduct an assessment of retail incentive plan designs, risks and controls, as well as gain a better understanding of the branch sales culture and leadership.

A CEO’s Hottest Topics



Before incentive programs can be determined, staffing needs are addressed and a succession plan is developed, a CEO needs to articulate a vision and communicate key priorities to his or her team. Gerry Cuddy, CEO of Beneficial Bank, Kent Ellert, CEO of Florida Community Bank and Chris Murphy, CEO of 1st Source Bank, explore what is capturing the attention and imaginations of bank CEOs today in this panel discussion from Bank Director’s 2016 Bank Executive & Board Compensation Conference, lead by Scott Petty, managing director, financial services at Chartwell Partners.

Highlights from this video:

  • Managing Talent in the Current Environment
  • Incentive Compensation After the Wells Fargo Scandal
  • Rising Cost of Risk & Compliance Talent
  • Competing with Bigger Banks for Talent
  • External Threats to the Industry

Video length: 38 minutes

 

What Does the Wells Fargo Debacle Mean for Incentive-Based Compensation?


incentive-pay-10-31-16.pngWith all of the recent press coverage from the Wells Fargo & Co. phony account scandal, you’d have to be living in a cave not to have heard about it. As the details come to light, I’m certain it will be a test case for how not to design an incentive-based compensation program. But, does it mean that incentive-based compensation is a bad thing? In my opinion, a properly designed program can be well within the measure of safety and soundness, can create proper inducements for the appropriate segment of your workforce, and, can avoid creating the negative results that were realized by Wells Fargo.

In our firm, Bank Compensation Consulting, one of the most common short-term, incentive-based compensation designs has at its heart a deferral component. When a participant obtains a bonus based on achieving the goals set forth in the design, all or a portion of that bonus is deferred until some point in the future, say, five years from earning it. The deferral component accomplishes a number of goals. For one, it creates a reason for the participating employee to continue to remain employed with the bank If the employee leaves the bank prior to receiving the deferral amount, it is forfeited. Also, it allows the bank to comply with clawback rules requested by the regulators. Since the unvested portion has not yet been remitted, it can more easily be “clawed back” should there be a violation of terms outlined in the plan document.

Would this deferral design have helped in the Wells Fargo situation? As of this writing, the answer to that question is unclear. I will say that, when I consider how many years I’ve been working with banks and non-financial institutions to implement incentive-based compensation programs, and I consider how many of those haven’t had the result that Wells Fargo has, I think the answer is clear. As a CPA who did his requisite time at one of the large accounting firms, I have to ask myself questions like: What types of internal controls exist at Wells Fargo? What management oversight is in place to ensure an employee can’t easily create a fake account? Weren’t there ‘red flags’? Certainly, when your inventory is cash, there is always an element of temptation that some people simply cannot overcome. But, the sheer volume of the fraudulent accounts created indicates, at least to me, that at some level Wells Fargo management was sending the wrong message to the staffers involved. The corporate culture in the division of Wells Fargo where this took place must have played an enormous role.

The fact that an incentive-based compensation program existed shouldn’t mean that its utilization was the culprit that induced employees to create fraudulent accounts. For me and my colleagues, we feel that the malleability of such programs is extremely advantageous when trying to encourage certain actions by one or a group of employees. However, care and experience should be used when creating a safe and sound incentive-based compensation design.

You might just want to get inside a cave if you were an executive at Wells Fargo right now. Designing an effective and safe incentive-based compensation program and making sure it’s implemented correctly is one way to avoid the glare of bad publicity.

Do You Understand the New Incentive Compensation Proposed Rules?


compensation-9-7-16.pngFederal banking and securities regulators published a notice of proposed rulemaking revisiting incentive compensation standards that were originally proposed in 2011. The 2016 proposal provides a more prescriptive approach for larger financial institutions than the previous proposal, and it applies to institutions with $1 billion or more in assets. As with prior guidance applicable to incentive compensation, the overarching principles should be considered by financial institutions of all sizes when designing their compensation programs consistent with the Interagency Guidance on Sound Incentive Compensation Policies issued in June 2010, which applies to all banking organizations regardless of asset size.

The 2016 proposal is similar to the previous proposal in that it prohibits excessive compensation to “covered” persons. However, unlike the 2011 proposal, the 2016 proposal more clearly defines requirements of institutions by creating three levels based on average total consolidated assets, with the lowest scrutiny applying to Level 3 institutions, those that have assets of $1 billion or more but less than $50 billion.

The proposal has implications for any incentive compensation provided to officers, directors, employees and principal shareholders associated with an institution with assets of $1 billion or more. As required under the Dodd-Frank Act, the proposal tries to discourage excessive compensation and compensation that could lead to a material financial loss.

Excessive Compensation
There are two distinct elements for consideration. First is excessive compensation, which involves amounts paid that are unreasonable or disproportionate to the amount, nature, quality and scope of services performed by the covered person. Types of information the regulatory agencies will consider in making this assessment include, among others:

  • The combined value of all compensation, fees or benefits provided to the covered person;
  • The compensation history of the covered person and similarly-situated individuals;
  • The financial condition of the covered institution;
  • Peer group practices; and
  • Any connection between the individual and any fraudulent act or omission, breach of fiduciary duty or insider abuse.

Material Financial Loss
In determining whether incentive-based compensation could lead to a material financial loss, regulators have previously stated that they will balance potential risks with the financial reward and assess whether the institution has effective controls and strong corporate governance. The 2016 proposal specifically provides that an incentive-based compensation arrangement would not be considered to appropriately balance risk and reward unless it:

  • Includes financial and non-financial measures of performance;
  • Is designed to allow non-financial measures of performance to override financial measures of performance, when appropriate; and
  • Is subject to adjustment to reflect actual losses, inappropriate risks taken, compliance deficiencies, or other measures or aspects of financial and non-financial performance.

Additional Elements of the 2016 Proposal
The 2016 proposal re-emphasizes that internal controls and corporate governance are essential in monitoring risks related to incentive compensation. The 2016 proposal also contains a requirement that certain records must be disclosed upon request of the covered institution’s federal banking regulator.

The 2016 proposal will be effective 540 days after publication of the final rule and does not apply to any incentive plans with a performance period that begins before the effective date. Similarly, an institution that increases assets to become a Level 1, 2 or 3 institution must comply with rules applicable to that level within 540 days of the triggering size (determined based on asset size over the four most recent consecutive quarters).

Considerations
We recommend that boards begin taking steps in order to comply with the 2016 proposal and the Guidance.

  1. Consider whether any of the institution’s incentive-based compensation is excessive or encourages risks that could result in a material financial loss by: applying the excessive compensation factors as set forth above; making compensation sensitive to risk through deferrals, longer performance periods and claw-backs; and considering a peer group study.
  2. Document relevant considerations as evidence of compliance with the Guidance at the committee and board levels.
  3. Implement controls and governance to oversee and monitor compensation and determine whether to risk–adjust awards.
  4. Review compensation policies annually.

New Incentive Compensation Rules Will Impact Banks and Their Boards


incentive-compensation-6-27-16.pngRecently, four of six regulators issued an inter-agency proposal for new rules on incentive compensation under §956 of the Dodd-Frank Act. The new rules replace the joint rules proposed in 2011, which never went into effect. Banks boards must approve incentive compensation plans for senior executives and “risk takers” under the framework of the law.

Four Key Differences
While some of the re-proposal is the same, there are important differences between the new rules and the 2011 rules. Here we touch on four key differences, and one important similarity.

1. The regulators have been “getting smart” on incentive compensation. While the 2011 rules seemed to have been proposed in a vacuum, the regulators have indicated that the new rules are based on their collective supervisory experiences gained over the last several years. The new rules incorporate practices that institutions and foreign regulators have adopted to address compensation practices that may have contributed to the financial crisis.

2. The new rules try to lessen the burden on smaller institutions by further dividing banks into categories based on assets and by scaling the requirements. The new rules recognize three categories each of which will be subject to varying levels of oversight:

  • Level 1 (greater than or equal to $250 billion);
  • Level 2 (greater than or equal to $50 billion and less than $250 billion); and
  • Level 3 (greater than or equal to $1 billion and less than $50 billion).

Institutions with average total consolidated assets of less than $1 billion will be subject only to the “safety and soundness” aspects described below. In most cases, the new rules apply the most stringent aspects only to Levels 1 and 2, while Level 3 just has primarily governance and recordkeeping obligations. However, regulators do have the discretion to subject Level 3 institutions to the rules applicable to Level 1 and 2 institutions.

3. The new rules get more specific about troublesome compensation designs. An incentive compensation arrangement will not be considered to appropriately balance risk and reward unless it:

  • Includes financial and non-financial measures of performance;
  • Is designed to allow non-financial measures of performance to override financial measures of performance, when appropriate; and
  • Is subject to adjustment to reflect actual losses, inappropriate risks taken, compliance deficiencies, or other measures or aspects of financial and non-financial performance.

4. The new rules extend mandatory deferral and clawback periods for Level 1 and 2 institutions. At their most restrictive, the new rules will require deferral for at least four years of at least 60 percent of senior executive officers’ incentive compensation and at least 50 percent of significant risk-takers’ incentive compensation. In addition, the new rules will require clawback provisions that, at a minimum, allow the institution to recover incentive compensation from the same individuals for seven years following the date on which the compensation vests, if the institution determines that the individual engaged in misconduct, fraud or intentional misrepresentation of information.

One Similarity
In addition to the foregoing key differences from the 2011 proposal, one important aspect remains the same. Similar to the 2011 rules, the new rules will prohibit all institutions from establishing or maintaining incentive compensation plans that encourage inappropriate risk by providing excessive compensation, fees, or benefits or that could lead to material financial loss to the covered institution. In this regard, the new rules continue to rely on the bank regulators’ “safety and soundness” guidelines respecting all compensation arrangements. In particular, in assessing the balance of risk and reward with respect to any compensation arrangement, institutions should consider all relevant factors including:

  • The combined value of all compensation, fees, or benefits provided to a covered person;
  • The compensation history of the covered person and other individuals with comparable expertise at the covered institution;
  • The financial condition of the covered institution;
  • Compensation practices at comparable institutions, based upon such factors as asset size, geographic location, and the complexity of the covered institution’s operations and assets;
  • For post-employment benefits, the projected total cost and benefit to the covered institution; and
  • Any connection between the covered person and any fraudulent act or omission, breach of trust or fiduciary duty, or insider abuse with regard to the covered institution.

Effective Date and Transition
It is expected that the last two regulators will publish their version of the new rules in the coming weeks. Variation between versions is not expected. A comment period will follow publication by each of the regulators. The new rules will become effective approximately 18 months after being published in final form. The new rules will not apply to any incentive compensation plan with a performance period that begins before the final rules are effective.

Zions Bank Grapples with Regulation



In the wake of the financial crisis, all the big banks had to change executive compensation plans to reduce risks. Regulators are keeping a close eye on these plans and sometimes requiring a mountain of paperwork to document them. Here, Scott Law, the executive vice president and director of compensation at $58 billion asset Zions Bancorporation, talks about how the changes have impacted his company.