Data & ResearchOctober 30, 2009

Financial Services Firms Could See Benefits Cuts

<p>Nearly half (49%) of 63 surveyed CFOs at financial services firms said their companies are reducing employee bonuses in the next six months, according to Grant Thornton LLP.</p>

Reported by Rebecca Moore

Nearly four in 10 of the CFOs said their firms are reducing salary increases, and stock options and other forms of equity-based compensation (38% each), according to a release of the survey results. But salaries are not the only thing falling; almost a third (31%) of survey respondents said employees’ 401(k) match is being reduced and 27% reported health care benefits are being reduced.

CFOs also indicated disability benefits and life insurance benefits are being reduced (10% each).

Nearly eight in 10 CFOs (79%) indicated they were most concerned about the cost of employee benefits.

In spite of their actions, the survey found CFOs are more confident about the economy. Forty-six percent said they believe the economy will improve in the next six months, and 49% indicated they expect their companies’ financial prospects to improve over the same time period.

Around one-quarter (26%) of respondents said their company will increase hiring in the next six months, while 60% indicated they expect headcount to remain the same.

Grant Thornton LLP conducted the biannual national survey from September 21 through October 2 among 846 CFOs and senior comptrollers from public and private companies, of which 63 were from financial services companies.