I was on a panel recently when someone in the audience asked about compensation. How do you think about it? What is the right structure? What do candidates actually want?
I gave them the same answer I always give because after thirty years in this business I have not found a more honest way to say it.
Every candidate wants as much upside with as little risk as possible. Every hiring firm wants as much commitment and guarantee from their people with as little upside as they can get away with offering. Both sides want to be compensated fairly. Both sides would prefer the other side absorb more of the risk. And the negotiation that happens between those two positions is where most compensation conversations live.
It sounds simple. And it is. But understanding that dynamic clearly, really understanding it, changes how you think about structuring compensation and why certain offers land well and others do not.
Over thirty years of recruiting in financial services I have sat across from a lot of candidates who were trying to make sense of a compensation offer. Base salary, bonus, deferred comp, carried interest, co-investment rights, phantom equity, profit sharing. The structures vary enormously depending on the firm type and the role. But the conversations candidates have with me about those offers are remarkably consistent.
And almost none of those conversations are about the number itself!
They are about what the number says about how the firm values them. What the structure says about how much risk the firm is asking them to absorb. And what the overall package says about whether the firm is being straight with them or trying to dress something up.
Here is what I hear most often.
On deferred compensation, the reaction is almost universally skeptical unless the firm has a track record of actually paying it. Candidates in financial services are sophisticated enough to understand that deferred comp is a retention tool first and a reward second. They do not object to that inherently. What they object to is when it is structured in a way that feels punitive, when the vesting schedule is unreasonably long, when the conditions attached to it are opaque, or when the firm has a history of finding reasons not to pay it. The candidates who have been burned by this before, and there are many of them, are almost impossible to close on a deferred heavy package regardless of how attractive the headline number looks.
On carried interest and equity upside the reaction depends almost entirely on credibility. A candidate who believes in the firm, the strategy, and the leadership will take a lower base for meaningful carry. A candidate who is skeptical about any of those things will want their compensation front loaded in cash because they do not trust the upside to materialize. When candidates push back hard on carry or equity it is rarely about the economics. It is about confidence in the people running the firm.
On bonus the most common complaint I hear is not about the size. It is about the discretion. Candidates who have been in situations where bonus was heavily discretionary and felt arbitrarily applied are deeply reluctant to put themselves in that position again. They want to understand the framework. They want to know what drives the number and who makes the decision. A firm that can articulate its bonus philosophy clearly and credibly has a significant advantage in closing candidates over a firm that says something vague about performance and market conditions.
What all of these conversations have in common is that candidates are not just evaluating the compensation. They are evaluating the firm through the compensation. The structure tells them something about the culture. The clarity tells them something about the management. The balance between cash and deferred tells them something about how much risk they are being asked to carry on behalf of the firm versus how much the firm is willing to carry on their behalf.
The firms that consistently attract and retain exceptional talent in financial services are not always the ones that pay the most. They are the ones that pay clearly, fairly, and in a way that reflects an honest understanding of what their people need to feel valued and secure. They front load enough cash that people do not feel financially anxious. They structure upside in a way that feels genuinely achievable rather than aspirational to the point of fantasy. And they communicate the whole package in a way that leaves candidates feeling informed rather than managed.
The firms that struggle with talent retention despite paying competitively are almost always making one of a few consistent mistakes. They are back loading too much compensation into future earnings that candidates do not fully trust. They are structuring bonuses in ways that feel opaque or arbitrary. Or they are offering carry or equity in a vehicle that candidates do not believe in enough to take a base haircut for.
None of these are unfixable. But they require honest conversations about what your compensation structure is actually communicating to the market, not just what you intend it to communicate.
That is a conversation we have with our clients regularly at Ramax Search & Staffing. Not just about what to pay, but about what your compensation structure says about your firm and how candidates are actually receiving it. After thirty years of being in the room when those offers get discussed, we have a pretty clear picture of what works, what does not, and why.
If you are losing candidates at the offer stage more often than you should be, it is worth having that conversation.
