Predictably, Allen & Overy’s (A&O’s) new pay and bonus package has been met with some cynicism ( see Talkback). The firm would have done itself a favour by decoupling its 15% pay hike from the rest of the measures. The tone of its announcement and human resources director Genevieve Tennant’s thoughtful opinion piece is that A&O is attempting to usher in a sea change in the way it treats associates. Yet it is, once again, lavishing an out-of-season pay hike on its lawyers that exposes the firm to familiar accusations of short-termism.
This time around, however, there is a sense that A&O is making a genuine attempt to tackle some deep-rooted problems. Devised by derivatives and structured finance head Simon Haddock, its new bonus scheme emulates the deferred share option schemes favoured by the same banks which see his department as a solution to their recruitment problems. The bonuses are linked to the value of an equity point, thereby tying the associates’ financial rewards to the fortunes of the firm and its partners.
