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In order to achieve that objective, we believe that personalizing pay to an employee’s role and sharing that information transparently is the best way we can deliver on our promise to employees to create an environment that empowers our employees to thrive.
As a pay-for-performance company, compensation within the pay range will vary based on relevant factors such as qualifications, skill set, and performance, and will evolve based on those same attributes. Employees are encouraged to actively engage in career development conversations with their managers to unlock their potential, develop their strengths and foster continuous improvement. Managers and leaders then have the flexibility to consider a number of factors to determine pay, including:
LPL Financial has two geographically-based compensation structures. In areas where external data surveys note the cost of labor is high, such as Boston and San Diego, market salaries for jobs are about 10% higher than the salaries for the same jobs in other locations, such as Fort Mill. We regularly evaluate the compensation structures for internal and external movement and update them periodically to reflect salary market movement.
LPL recognizes being proactive in the analysis of equitable pay treatment across our pay programs prevents situations where similarly situation employees aren’t being compensated in alignment with our compensation philosophy.
In order to deliver on that commitment, after our own internal review, we engage outside experts, to conduct three distinct analyses––of base pay, merit increases, and discretionary bonus awards––of employees below the EVP level who are not on sales incentive compensation plans. Using computer models created for LPL, these analyses take into account the factors that underlie LPL’s specific compensation decisions and identify individuals whose base pay, merit, or bonus, as applicable, is lower/higher than expected to a statistically significant degree.
In particular, we ask the outside experts to focus on whether there are statistically significant variations tied to race, ethnicity or gender. Once the data has been analyzed, any outliers tied to race/ethnicity or gender are reviewed again internally by LPL’s HR consulting, compensation and legal teams. This group will meet with managers to better understand if there is a specific rationale for the compensation decision and, if appropriate, implement adjustments. These compensation analyses are an important component of LPL’s compensation strategy and overall efforts to ensure each employee’s compensation fairly aligns with their role, level, contributions, performance and other relevant factors.
