ELFA Releases Two New Studies of Compensation Trends in Equipment Finance Industry

October 16, 2023, 07:20 AM

Filed Under: Equipment Leasing & Finance Association

Related: Compensation, ELFA, Equipment Finance Industry, Equipment Leasing and Finance Association

Compensation in the equipment finance industry returned to steady increases in 2022, according to the 2023 Equipment Leasing and Finance Compensation Survey, one of two new studies released by the Equipment Leasing and Finance Association (ELFA). Along with the 2023 Small and Medium Enterprise Compensation Survey, the surveys are part of the Knowledge Hub, ELFA’s source for business intelligence on the equipment finance industry.

2023 Equipment Leasing and Finance Compensation Survey

The 2023 Equipment Leasing and Finance Compensation Survey measures compensation rates for the 2022 fiscal year as reported by more than 80 equipment finance companies representing a cross section of the equipment finance sector, including independent, bank and captive equipment finance companies. Firms provided data for more than 90 executive, front-office and support positions and 10 levels of seniority, including a breakdown of salary (for 2022 and 2023), incentives (including cash bonuses and commissions), long-term awards and total compensation by company type. The survey is a collaborative initiative between ELFA and McLagan, a performance/reward consulting and benchmarking firm for the financial services industry. Highlights include:

Total Compensation: Total compensation increased on a year-over-year basis for most functions and levels. On a “same store” basis (constant incumbents in multiple survey years), total compensation was up approximately 3-5% at median for key revenue-generating functions from 2021 to 2022.
Salary: On a “same store” basis, salaries for origination roles increased (~3%) at the median from Entry through Advanced levels. Base salaries remained flat at more senior levels.
Differences by Level: Total compensation increased ~2-3% across all levels from the Entry through Managing Expert levels at the median. At the high end of the market (75th percentile), total compensation increased ~5%.
Leadership: At the Executive level, cash bonuses for the 2022 performance year accounted for 36% of Executive compensation while long-term awards accounted for 29%. Total incentives (both cash bonus and long-term awards) were 155% of salary at median.

2023 Small and Medium Enterprise Compensation Survey

The 2023 Small and Medium Enterprise Compensation Survey reveals trends in pay—including salaries, bonuses, benefits and commission—at bank, captive and independent equipment finance companies. The report is based on a survey of ELFA member companies conducted by Vault Consulting, LLC. A total of 39 companies participated in the survey. The respondents reported 790 employees for 20 specialized revenue and support positions, ranging from CEO to collections staff to sales staff. The data are displayed by company type, new business volume, region and market segment. Highlights from the survey include:

The five highest paid positions, based on average total compensation, were CEO/President, Head of Sales, CFO, Senior Sales Representative and Head of Credit. Total compensation is based on average base salary and average bonus/commission.
Compared to the last SME Compensation Survey in 2022, the average total compensation of the top five positions changed by the following percentages: CEO/President +1%; Head of Sales -8%; CFO -15%; Senior Sales Representative +43%; and Head of Credit +14%.
A bonus/commission was reported for 82% of the submitted employees. A total of 88% of sales staff received a bonus/commission, and 5% of companies reported commission only sales staff.
The top quantitative factor used to determine executive leadership incentives was profitability (83%) and the top qualitative factor was managerial effectiveness (64%).

For a complete copy of the 2023 Equipment Leasing and Finance Compensation Survey report, please visit https://bit.ly/2023ELFACompSurvey or contact Bill Choi at bchoi@elfaonline.org. Note: Survey results are only available for purchase by firms who commit to participation in the 2024 survey. All participating firms are required to sign a non-disclosure agreement with McLagan for data privacy purposes.

Participation in the 2023 Small and Medium Enterprise Compensation Survey is a benefit of ELFA membership, and ELFA member respondents receive a complimentary copy of the report. Non-respondents may purchase a copy from the ELFA website at https://bit.ly/2023ELFASMESurvey.

Learn more about the Knowledge Hub, ELFA’s source for business intelligence on the equipment finance industry, at www.elfaonline.org/KnowledgeHub.