When you spend years acquiring compensation data on corporate tax executives you learn a lot! TaxConnections conducts a compensation study every two years given the enormity of the project. This requires an extraordinary amount of effort to compile information, match up technical responsibilities for specialized tax roles, organize the information by geographical regions, and make sense of a wide range of equity programs. We conduct compensation studies in order to help corporate management teams attract the tax talent they need. These studies are not money-makers given the great deal of time it takes to prepare them. It is difficult to obtain salary information as people must trust you in order to get the real story! We must also organize it in a fashion that makes sense when you step out of the realm of base plus bonus and into the realm of equity and perks which are as vast as the sea. What you need to know is the real story behind corporate tax compensation if you want to successfully retain and keep the very best tax talent on the market..
The key to the success of large multinational tax organizations is retention of technically qualified management level tax executives. With the growth of new companies, the demand for corporate tax talent has risen dramatically while the talent pool is not growing quickly enough to meet the current demand. Lack of knowledge in compensating corporate tax executives comes at a great cost when you lose this talent or find yourself searching for it today! Corporate tax experts are saving companies millions annually and executive teams take notice of low effective tax rates. Management teams who see tax as their partner in the executive suite are saving companies money that would otherwise be lost forever.
Over the years, I have been fortunate enough to work with some of the greatest corporate tax executives in the world. They have been on the front lines protecting multinational corporations. They are smart, ethical and work within the laws of the governments with amazing technical finesse. They have also taught me that there are corporate management teams who do not make a business move without looking at the tax implications. On the flip side, there are corporate management teams who make deals and call me to help them find a tax executive to address the tax challenges they found themselves facing.
Smart in-house tax executives will save a company millions annually. Management teams need to listen to them and their tax planning strategies because the great talent loves the tax profession and look at it as a passionate puzzle to be mastered. You must get it right when it comes to compensating your corporate tax executives or run the risk of losing them to competitors who will be happy to pay them competitively.
Companies generally have a pay range or compensation culture they want the tax executives to fit into but the market is considerably more competitive now. Everybody is getting ready for Tax Reform and it will shake the landscape of many corporations who are not ready for these changes. It will also create a war for tax talent. Smart companies are reviewing tax compensation for improved retention strategy and increased tax management hiring due to Tax Reform. There are companies who will be at the tip of the spear and those who will be flying in the wind to meet corporate financial goals. However, the companies armed with the best tax strategists dealing with a windfall of changes due to tax reform will yield the best results.
As a person who was a very young tax recruiter during President Reagan’s Tax Reform Act of 1986, I can confirm that business exploded during this time because of the tax law changes. Companies needed to add tax professionals to address the changes and their impact on corporate tax organizations. This same aggressive environment is appearing again as competition for highly qualified tax executives increases in this very active market.
If you are unknowingly under-compensating your tax executives you often find out only when you lose them to more competitive companies. The loss of a senior tax executive is the loss of very valuable historical financial information for the company and the losses are often not realized or understood until years later. Your goal and focus should be to retain your in-house tax expertise. My advice to C-Suite management teams is to become familiar and knowledgeable on tax executive compensation.
If you would like a copy of our 2017 Tax Executive Compensation Report, please Click Here for more information on how to obtain one of our current reports. There is a cost depending on the type of report and the number requested.
Have a question? Contact Kat Jennings