Recruiting and retaining high-performing loan originators, branch managers, and sales leaders remains a key focus for many mortgage lenders. While sign-on bonuses, retention programs, forgivable loans, and other recruiting incentives can be effective tools, they often carry tax, payroll, and compliance implications that organizations may overlook.
In Episode 2 of Richey May’s Tax Compensation Strategies Video Series, mortgage tax specialists Kenny Burch and Gina Jackson discuss the opportunities and risks associated with these increasingly common compensation arrangements.
Why Compensation Structure Matters
Many lenders use sign-on bonuses and retention incentives to compete for experienced originators and production leaders. While these programs can help accelerate growth and protect revenue, organizations must evaluate more than just the upfront cost.
Employers should also consider:
- Payroll tax obligations
- Deduction timing considerations
- Internal equity concerns
- Clawback administration
- Profitability and ROI tracking
- Compliance and documentation requirements
As discussed in the video, compensation plans should be developed collaboratively among finance, accounting, HR, legal, tax, and compliance stakeholders to ensure alignment across the organization.
Watch Episode 2
Missed Episode 1?
Episode 2 builds on our first video covering equity-based compensation and deferred compensation strategies for mortgage lenders. If you missed the first episode, catch up here.
Compensation strategies can be powerful recruiting and retention tools. However, understanding the tax, accounting, and compliance implications is essential before implementing or expanding these programs.
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Questions about mortgage lender compensation strategies, sign-on bonuses, retention pay, forgivable loans, or tax planning?
Contact the Richey May mortgage banking tax team to discuss your organization’s unique circumstances at info@richeymay.com.
