CORRECTED - CORRECTED-UPDATE 1-Waddell & Reed to cut compensation by 15 pct

(Corrects headline and paragraph 4 to clarify company plans to reduce compensation by 15 percent, not 50 percent. Also corrects company's name in paragraph 1 and 3)

By Aftab Ahmed

BANGALORE, Dec 1 (Reuters) - U.S. asset manager Waddell & Reed Financial Inc (WDR.N) plans to cut compensation expenses by the end of the year through a voluntary separation program as it tries to fight the downturn in the market, a company official told Reuters.

The company may look at an involuntary separation program if its voluntary separation program fails to achieve the desired results, Roger Hoadley, the director of communications, said in an interview.

Waddell & Reed's shares were trading down almost 12 percent at $11.88 Monday midday on the New York Stock Exchange.

The company is targeting a 15 percent reduction in overall compensation and expects to save about $20 million, Hoadley said.

"The program is based on compensation reduction and not headcount," he added.

The company, however, did not disclose the amount it is willing to spend for the voluntary compensation programme.

"It (the cost) is undetermined at this point of time and depends upon how many opt for the voluntary compensation program," Hoadley said.

The program would only affect its headquarters and not impact its network of financial advisers who have offices across the country, the Kansas-based company's spokesperson said. (Editing by Amitha Rajan) ((Reuters Messaging: aftab.ahmed@thomsonreuters.com; within U.S +1 646 223 8780; outside U.S +91 80 4135 5800))