Calling All Bank Directors Episode 44: Misalignment of Incentive Compensation
In this episode, host and AABD President David Baris is joined by Jeff Marsico, president and founding shareholder of the Kafafian Group, to address how the common misalignment of executive incentive compensation with the compensation of other bank employees can be injurious to banks’ profit goals.
For example, if a loan officer is rewarded for volume and not for the profitability of the loan portfolio, that might lead the officer to sacrifice profitability for volume and act inconsistent with the bank’s efforts to reach ROE goals.
As president and a founding shareholder of the Kafafian Group, Jeff oversees and works on all lines of the banking business, with a focus on strategy, profitability, and financial advisory. He has analyzed and facilitated hundreds of strategy development engagements for community financial institutions.
Listen to episode 44 below or subscribe wherever you get your podcasts.