SEC Weighs Bonuses to Hold On to Employees

The Securities and Exchange Commission, which is losing experienced lawyers and accountants to high-paying private-sector jobs, has proposed offering some of its most essential employees “retention allowances” of as much as $25,000 to entice them to stay a while longer. The SEC would like to start awarding these bonuses based on a modest scale of about 10% to 20% of total salary. An experienced trial lawyer, for example, can make a salary of $99,000 a year. But the agency has also asked the Office of Management and Budget for a $7-million increase in its budget to expand the program, which would make it possible to offer the allowances to as many as 270 employees. In seeking the budget increase, an SEC official noted that the agency’s staff turnover rose to 11.9% in fiscal 1997, from 9.5% in 1996, as the turnover rate for lawyers rose to 16% from 11.3% in 1996. The high turnover rate hurts productivity and institutional memory, making it harder for the SEC to fulfill its role as securities market watchdog, the official said. The economic boom and the bull market have led investment companies, law firms and accounting firms to hire more people, especially in the areas of regulatory compliance. Barry Barbash, director of the SEC’s division of investment management, said some of his best employees have received calls from headhunters after only two years on the job.