MADISON, Wis.-New executive compensation data released by the Credit Union Executives Society (CUES) has found an overall increase of 6.43% in CEO base salaries and 8.18% in total compensation this year.
Moreover, CUES said its Executive Compensation Survey found CU executives continue to close the gap of pay between their bank counterparts, with CEOs at credit unions $250 million or higher in assets exceeding those at banks in base pay.
Not surprisingly, the overall compensation averages are being pulled up by large increases at the largest credit unions. CUES reported that CUs with assets between $600 million and $999 million had the largest average increase in salary plus bonus/incentive paid at 13.07%.
The average base plus bonus compensation for CEOs ranged from $85,366 for credit unions with assets less than $30 million to $552,318 for credit unions with assets greater than $1 billion. The average CEO total compensation for all credit unions reported was $256,339.
The CUES survey found non-CEO executive compensation increases in total compensation ranged from 4.75% to 9.26% for repeat participants. The greatest percentage change was reported for the branch/member services executive at 9.26%
The top factors for determining CEO bonus/incentive awards remain the same as the last few years with earnings, board evaluation and loan growth rounding out the top three factors.
Other Findings:
The percentage change in total compensation for all executive positions in the survey remained similar to the 2012-2013 year-to-year changes for most positions. The exception is the Branch/Member Services Executive, which is about seven percentage points higher than last year.
* 86.1% of responding CEOs have been involved in the credit union movement for more than 15 years. Less than 1% have been involved in the credit union movement for less than five years. Some 16.9% of credit unions participating in the survey have a CEO who has been in his or her current position for fewer than five years. Approximately 46.5% of CEOs have been in their current positions between five and 15 years and approximately 36.5% of CEOs have been in their current position for 15 years or more, CUES said.
"What this shows is that there are a lot of experienced, dedicated and tenured executives working in the credit union movement today," said CUES in its analysis. "What this graph also indicates is that there will be a strong core base of experienced CEOs in the credit union industry for many years to come with approximately 59.2% of them serving with greater than five years of experience and less than 20 years of experience as a CEO."
* The percentage of CU execs reporting a master's degree or higher was 31.1%, which is only slightly (0.8%) higher than 2012. Adding in those who have bachelor's degrees, the percentage of executives with four-year college degrees or higher soars to 86.1%, CUES said.
'At Risk Pay' Modest
CUES said it found CEO bonus as a percentage of salary tends to rise as the breadth and scope of the CEO's job becomes bigger and the credit unions asset size increases. "As we have seen over the last few years, there continues to be an increasing emphasis on variable pay (bonus/incentive pay) for the CEO and other executive positions," CUES said. "This type of variable pay is common in most other industry sectors and they tend to place a higher emphasis on at-risk pay. As for credit union CEOs, variable at-risk pay remains relatively modest in 2013 as compared to other industries whose variable pay tends to run significantly higher. "
A total of 443 credit unions participated in the survey between May 1, 2012, and April 30, 2013.
-Frank J. Diekmann
