MoneyGram 2013 Annual Report Download - page 38

Table of Contents
Compensation and Benefits
Compensation and benefits include salaries and benefits, management incentive programs, related payroll taxes and other employee related
costs. The following table is a summary of the change in compensation and benefits from the respective prior year for the years ended
December
31 :
In 2013
, compensation and benefits expense increased primarily due to increased headcount, ordinary salary increases and changing employee
base mix as we invest in our sales, market development and compliance functions. Employee stock-
based compensation increased due to the
annual grant of options and restricted stock units. Other employee benefits decreased due to lower insurance costs. Reorganization and
restructuring costs decreased as we concluded our Global Transformation Initiative.
In 2012
, salaries, related payroll taxes and incentive compensation increased from an increase in headcount, customary salary increases, our
changing employee base mix as we invest in our sales, market development and compliance functions and higher sales incentives, partially offset
by decreased incentive compensation and a reduction in temporary help. Other employee benefits increased due to executive severance, higher
insurance costs and increased benefit plan expense, partially offset by movement in foreign currency exchange rates. Employee stock-
based
compensation decreased from grants fully vesting in prior periods and forfeitures, partially offset by new grants with longer vesting periods.
Transaction and Operations Support
Transaction and operations support primarily includes marketing, professional fees and other outside services, telecommunications, agent
support costs, including forms related to our products, non-
compensation employee costs, including training and travel costs, bank charges and
the impact of foreign exchange rate movements on our monetary transactions, assets and liabilities denominated in a currency other than the U.S.
dollar. The following table is a summary of the change in transaction and operations support from the respective prior year for the years ended
December 31 :
In 2013
, transaction and operations support expense decreased as a result of decreased legal expenses related to the settlement in the
MDPA/U.S. DOJ investigation and the shareholder litigation. The reduction in transaction and operations support expenses were partially offset
by the ongoing IRS tax litigation. We incurred increased expenses for agent support costs and increased expenditures related to
telecommunication costs as a result of continued network, product and infrastructure growth. As a result of the DPA, we incurred increased
expenses for contractors and consultants, along with fees associated for the compliance enhancement program. Other expenses consist of
decreased reorganization and restructuring costs as we concluded our Global Transformation Initiative offset by increases in travel expenses.
In 2012
, transaction and operations support expense increased as a result of the following items: legal expenses, consultant fees and outsourcing
costs and telecommunication costs. Legal expenses increased primarily due to regulatory matters and securities
36
(Amounts in millions) 2013
2012
Compensation and benefits expense for the prior year
$
241.6
$
235.7
Change resulting from:
Salaries, related payroll taxes and incentive compensation
26.9
9.3
Employee stock-based compensation
2.4
(7.1
)
Reorganization and restructuring
(5.8
)
0.5
Compliance enhancement program
0.1
—
Other employee benefits
(0.3
)
3.2
Compensation and benefits expense
$
264.9
$
241.6
(Amounts in millions) 2013
2012
Transaction and operations support expense for the prior year
$
355.7
$
227.8
Change resulting from:
Legal expenses
(115.3
)
111.6
Contractor, consultant and outsourcing
7.7
22.1
Foreign exchange gains/losses
(1.0
)
(5.7
)
Compliance enhancement program
2.7
—
Agent support costs
3.9
0.2
Telecommunications
2.8
1.3
Other
(2.8
)
(1.6
)
Transaction and operations support expense
$
253.7
$
355.7