Managing executive compensation is a growing challenge for financial services firms, with nearly nine in 10 (89%) saying their in-house technology can’t keep pace with demand, according to new research by CSC, a provider of business administration and compliance solutions.
The research shows that rising complexity, regulatory pressure, and expanding global participation place increasing strain on internal systems and teams.
CSC surveyed 300 senior HR, rewards, and compensation leaders across Europe, Asia Pacific, and North America working in private markets, asset management, insurance, and investment banking for its report, The Future of Reward in Financial Services: Executive Compensation in 2026. It explores their responses and examines how firms adapt to increasing complexity in long-term incentive (LTI) schemes.
The research revealed that more than four in five (86%) respondents find the administration of compensation schemes is now complex, reflecting the rapid evolution and expansion of LTI structures across global organizations.
Rising participation and regulatory scrutiny are key drivers of this complexity. Four in five (80%) firms report increased participation in compensation schemes over the past three years, as organizations extend incentives beyond senior executives to support retention and reward performance. At the same time, half (50%) are preparing for 2026 transparency reviews and regulatory consultations, signaling a significant increase in compliance and reporting expectations.
“Participation in LTI schemes is widening, and expectations around fairness and transparency are increasing,” Shane Hugill, head of executive compensation services at CSC, said in a statement. “While that’s positive from a talent and performance perspective, it also means firms are dealing with more moving parts. Many are managing programs across multiple providers and jurisdictions, which can make it harder to keep data consistent and processes under control.”
In addition, data fragmentation now poses a significant challenge for organizations. Two-thirds (66%) of respondents cite reliance on multiple service providers as a key barrier to maintaining accurate and consistent data, while 64% point to operating across multiple regulatory environments.
These challenges increase the risk of reporting errors and compliance failures. They also make it harder for firms to maintain a single, accurate view of their incentive plan data.
As a result, companies are rethinking how they manage incentive plans, with many turning to outsourcing and technology partners to improve efficiency and control. More than three-quarters (77%) of respondents say they use multiple outsourcing partners to administer compensation schemes across jurisdictions.
“As the labor market becomes increasingly competitive, firms have to think more creatively about how they reward and retain top talent,” Jennifer Kenton, chief commercial officer at CSC, said in a statement. “That can make executive compensation harder to manage, and that’s why firms need a trusted partner with proven expertise in administration and execution for all incentive plans.”
Photo credit: mooselai2020/Freepik
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