One of the areas that many companies have not paid as much attention to in their compliance programs is compensation. However, the DOJ and SEC have long made clear that they view monetary structure for compensation, rewarding those employees who do business in compliance with their employer’s compliance program, as one of the ways to reinforce the compliance program and the message of compliance. As far back as 2004, then SEC Director of Enforcement Stephen M. Cutler noted that integrity, ethics and compliance needed to be part of promotion, compensation and evaluation processes: “At the end of the day, the most effective way to communicate that “doing the right thing” is a priority, is to reward it.”

The 2020 FCPA Resources Guide stated the “DOJ and SEC recognize that positive incentives can also drive compliant behavior. These incentives can take many forms such as personnel evaluations and promotions, rewards for improving and developing a company’s compliance program, and rewards for ethics and compliance leadership.”

Obviously, the power of a compensation plan is to motivate employees to not only to sell more but to act in ways that support your company’s business model and overall culture and values. For the compliance practitioner, one of the biggest reasons is to first change a company’s culture to make compliance more important, and then integrate it into the DNA of your organization. But you must be able to evolve in your thinking and professionalism to recognize the opportunities to change and then adapt your incentive program to make the doing of compliance part of your company’s everyday business process.

Three key takeaways:

  1. The DOJ and SEC have long advocated compensation as a way to motivate employees into ethical and compliant behaviors
  2. Keep the compliance aspects of your compensation structure simple and easy for your employees to understand
  3. Have full transparency in the framework of your compensation structure

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