Tie Compensation to Reputation

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Rey Ocanas is BBVA Compass' director of corporate responsibility and reputation, but he's far from the only BBVA executive paid to keep both on the up and up. The bank and its Spanish-owned parent recently tied a portion of its executives' variable compensation directly to public perceptions of the brand.

In a sense, everyone who works at any bank is financially motivated to preserve a good reputation—or to strengthen a weak one. If reputational troubles trigger a decline in business or, at the extreme end, a run on the bank, that's not good for anyone's performance-based pay. But even with their heightened awareness about the importance of reputation, how many industry executives have considered making a portion of their annual pay conditional on the way their bank is regarded by the public?

It's hard to compute compensation based on reputation without solid metrics. BBVA, for example, works with a consulting firm that produces a monthly reputational score based on consumer surveys. The data reflects attitudes not just on corporate citizenship, but governance, financial performance, workplace environment, and products and services, among other factors. If you accept that reputation involves all of those things, then it follows that human resources managers would have a direct impact on a measurable component of reputation (perceptions about the workplace environment), as would business line executives (products and services) and financial executives (financial performance).

Perhaps it's time to actually hold them accountable for it.

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