A wave of sustained economic growth that spurred an increase in the equipment finance industry in 2011 continued through 2012. Sizeable increases from year to year in new business volume, coupled with the lowest levels of delinquency in more than five years have served to create a positive momentum, with considerable increases in total compensation across the industry. This has been most significant at the senior levels.
More than 60 finance companies were surveyed, measuring compensation rates across a cross section of the equipment finance sector, including banks, independent, and captive leasing and finance companies. Firms provided a breakdown of salary, incentives, and long term awards by company type.
Between 2008 and 2009, new business volume across the equipment finance industry fell by more than 30 percent, and overall compensation declined. Beginning in 2010, however, new business volume grew by more than 9 percent, which cause a moderate growth in compensation across the industry. In 2011, the improvement grew to 16.5 percent increase.
Direct equipment financing originators saw the most growth in compensation with increases of up to 15 percent, with the most significant increases at the group lead and managerial levels. Most of these positions received increases of greater than 20 percent.
Performance was mixed in the vendor origination arena, however the overall compensation rose about 5 percent, showing the smallest year by year increase. Support departments saw compensation remain flat up to 15 percent for the majority of the population, with the underwriting faction receiving the largest increases.
The standard salary budget range for the industry remained within 2 to 5 percent, with salaries for independent and captive organizations rising more significantly when compared to bank owned organizations.
The various compensation vehicles such as salary, bonus, and long term awards varied by the different equipment leasing and financing options and entities. Banking firms tended to offer a greater number of long term rewards as a percentage of their compensation, while captive entities relied more on salaries as the most heavily weighted portion of the overall compensation package relative to more independent groups.
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