Wachovia Securities is raising the bar on production-related bonuses. Translation for brokers: you've got to produce more to retain your current rate of pay.
Previously, brokers generating between $17,000 and $18,999 per month received “grid” — a standard percentage of production, plus a sliding-scale bonus. Various products at Wachovia have different grid levels, ranging generally from 36 percent to 42 percent payout. Now, the bar for grid has been raised to $19,000, with bonuses kicking in at $21,000. Those who produce between $17,000 and $18,999 monthly ($204,000 to $228,000 annually) will be penalized 3 percent. Brokers who do worse will lose a lot more — with production between $14,000 and $17,000 a month, the payout is grid minus 12 percent.
Meanwhile, for high-end producers, the threshold for qualifying for a 7 percent bonus has risen from $65,000 to $75,000 per month. The Richmond, Va.-based firm also tinkered with payout for packaged products. Previously packaged product sales of $2,750 or more qualified for a 36 percent payout. The new threshold is $3,000. On the positive side, the firm recently increased signing bonuses, but specifics were not immediately available.
A Wachovia spokesperson confirmed that the company had made changes to the compensation plan for brokers. He would not comment on details, saying only that the changes are in keeping with trends in the industry.