Linda Mack was a guest panelist at a seminar entitled ‘Family Office Compensation and Talent: 2023 Trends’ hosted by Katten Muchin Rosenman in Chicago, March 1 and New York City, March 29, 2023

Linda Mack of Mack International was a guest panelist at a Compensation Strategies Seminar hosted by Katten Muchin Rosenman and joined by Trish Botoff of Botoff Consulting and partners of the firm. It was held in Chicago, March 1 and New York City, March 29, 2023

WEST PALM BEACH, Fla.—

Linda Mack of Mack International was a guest panelist at a Compensation Strategies Seminar hosted by Katten Muchin Rosenman. The event was held in Chicago, March 1 and New York City, March 29, 2023, in person and virtually. Linda was joined by Trish Botoff of Botoff Consulting and partners of the firm. The topic was ‘Family Office Compensation and Talent: 2023 Trends. The purpose of the seminar was to explore different compensation strategies for professionals in family offices.

Panel topics included:

• Market changes and impact on compensation planning
• Recruitment and retention: market demands and challenges
• Current state and structure of long-term incentive plans in family offices
• Evolving role of the family office executive

Overall market trends and highlights from a recent national survey on compensation were cited. Linda Mack offered her observations on market changes, recruitment, retention, and the evolving role of the family office executive. “An increasingly competitive market and increased access to information is requiring Family Offices to keep pace in the recruiting, compensation and retention arena.”

According to Linda most Family Offices and Family Enterprises are recruiting with a long term focus–10-15 years. “However, finding someone with the requisite skills is just the first step. They must also be a culture fit. Competition for talent for the C-suite is strong and shows no signs of softening. Every family office must create and maintain a culture that is compelling in order to attract and retain exemplary candidates.”

The issue of hybrid work arrangements was raised. According to the Botoff Consulting Compensation and Talent Planning Survey Report, 75% of family offices report offering an option for hybrid work—most requiring 3-4 days per week in the office. “Most family offices we know continue to prefer people being in the office. The family wants teams working together in person to keep their culture intact, particularly in leadership roles,” said Linda.

Compensation is often the most significant expense consideration for family offices. Survey results from Botoff Consulting’s 2022-2023 Compensation Survey of Family Offices, Family Investment Firms, and Trust Companies were distributed and discussed. Over 400 family offices participated. Aside from hybrid work arrangements, family offices continue to face market conditions for and around talent that now incorporates a seemingly ever-tightening labor pool, as well as labor competition, mobility, and inflation, all of which contribute to increased compensation costs. Compensation structures are evolving including bonuses, annual incentive plans and long term investment (LTI) opportunities. “There is continued acceleration of LTIs mainly due to the competition in the marketplace and the increasing influx of compensation practices from institutional markets into the private and family office markets,” noted Linda. In fact, 59% of family offices report the use of one or more LTI vehicles. Both Trish Botoff and the Katten partners explained the various types of LTIs and agreed that LTIs were a good idea provided they are flexible and structured correctly in alignment with family objectives. Linda emphasized the philosophical component.

“Some families do not have a compensation philosophy that supports using co-invest or carried interest LTIs programs but may provide a deferred cash compensation vehicle to serve as an LTI for a candidate.”

In the family office of the future there are greater expectations for leaders. Linda describes the profile of the optimal C-suite leader of the future as being “strategic and proactive.” “Family offices should be looking for someone with a strong business, financial and investment acumen who is also an expert generalist. The ideal leader must be a trusted advisor who combines a high IQ with a high EQ to inspire a culture of excellence. They will also be an executive who is technologically savvy and well networked, bringing “best practice” knowledge to their role. Once you find the ideal candidate, compensation and retention strategies are paramount.”