Wall Street Pay Q&A: Ed Rataj

NEW YORK (TheStreet) -- Wall Street pay remains a hot-button issue on Main Street, and corporate boards are facing tough choices as a result: Approve compensation packages they believe executives deserve or apply haircuts to satisfy the masses?

Executives and high-paid traders have been in the spotlight at all the major U.S. financial firms: Goldman Sachs' (GS) Lloyd Blankfein , Bank of America's (BAC) Tom Montag , Citigroup's (C) Vikram Pandit and Andrew Hall , JPMorgan Chase's (JPM) Jamie Dimon, Wells Fargo's (WFC) John Stumpf , Morgan Stanley's (MS) John Mack and American International Group's (AIG) entire executive suite. All told, in 2009, the financial industry set a new record for employee pay -- despite the watchful eye of Main Street and a pay czar in Washington.

Ed Rataj, managing director of compensation consulting at CBIZ Human Capital Services, has been working with the boards of financial firms to sort out these issues. His expertise lies in designing pay packages based on job evaluation and market performance, though recently he's had to find ways to factor in public expectations as well.

Rataj recently discussed the Main Street-vs.-Wall Street divide with TheStreet, and why bank board members aren't necessarily on the same page.

TheStreet: What's the main issue that bank boards are facing today?

Ed Rataj: What I'm hearing a lot in financial services is that there is still tremendous lack of supply and tremendous demand for world-class performers. These firms see world-class talent as an opportunity to make a lot of money.

Even though there are layoffs in the broad economy, and even in financial services, world-class talent is in strong demand. ... Firms say we need to keep that world-class talent; we need to poach that world-class talent from our competitors.

How have things changed since pre-crisis days?

It's very interesting. Rather than meeting with boards as a group, there have been a lot more individual meetings with board members to try to understand without it being public, where they are coming from. And what I hear on an increasing basis is that they're caught in the middle as board members. They're willing to pay top dollar for that top talent, but they don't want to deal with the public backlash.

So how do you advise boards on how to structure plans as a result? Is it more important to have a competitive compensation plan, or one that's politically swallowable?

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