Eurocap Bank – Organizational Behavior and Processes
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Eurocap
Organizational Behavior and Processes
Eurocap Bank Part I
Table of Contents
Key Facts:
EEJ formed in 1997 as a subsidiary of Eurocap Bank, is managed by McCauley and Hammersma.
EEJ was recognized as a second tier investment bank that emphasized customer relationship management with a strong international focus.,
EEJ Challenge was to hire and retain top employees. There were different compensation expectations from Japanese and American companies. Americans are more bonuses orientated where Japanese base more on Salary .EEJ paid 10%-30% less in salaries and bonus than the industry standard
Company is facing labor shortage and strong competition. Employee resource pool was competitive and narrow due to the need for bilingual employees with experience in both Japanese and international markets
Potential employees perceived higher risks because company was relatively new and inexperienced, and thus expected higher compensation.
Japanese investment banks emphasize long term relationship bonuses; this was considered the single largest motivating factor within the industry
Company is currently being held together by “cult, personality and friends”.
In 1998, Eurocap Japan made a strategic shift to focus on multinational, non-Japanese clients by poaching experts in the Japan market and hiring key sales and research people offering them guaranteed bonuses.
EEJs head office imposes stringent control over operations of EEJ, opposite of industry standards, McCauley and Hammersma felt they had inadequate control and support from head office to manage effectively
in Jan 2000 EEJ fell under the corporate reward plan that tied bonus to total compensation including salary and long term incentives and was discretionary
Bonus are paid to divisions that underperform, taken out of the bonus pool reducing the bonus paid to performing division.
Bonus determinations were based on subjective evaluation and submitted to head office. Head office gave no feedback on these submissions. Compensation review was quite straightforward, but very complicated in practice with discretionary bonuses awarded.
1999 bonuses paid were deemed to be unfair by the employees, McCauley and Hammersma agreed they were inadequate when the amount they received for their “bonus pool” for their subsidiary was so small they felt they would lose their employees
Lack of retention program and employee ownership program promoted employees departure.
In March 2000 management introduced a deferred stock options program, EUROBANK was already 4-5 years later than the competitors for this initiative.
In March of 2000 the market showed no signs