SAN ANTONIO-Having a CEO succession plan is insufficient, according to one person.
What's really needed, said John Moreno, an executive benefits specialist with CUNA Mutual, is an executive development component along with financial incentives to retain top talent. In remarks to the CUNA Human Resources/Training and Development Council Conference said most CEO succession plans are just short-term disaster recovery plans.
According to Moreno, a true succession plan doesn't just choose internal successors to a CU's top executive positions; it prepares internal successors, which provides more stability and consistency with the organization's strategic plan. "It's about building bench strength, to use a sports analogy, and involves staff development rather than replacement. That requires nurturing and developing people, and it requires active involvement of the board of directors, chief executive and human resources functions."
But executive development must be linked with financial incentives, he said, noting "unless you also provide monetary incentives to keep your top talent at your credit union, you run the risk of having your staff poached by others."
Those incentives include so-called "golden handcuffs."
Moreno added that it's also critical to align non-qualified deferred compensation arrangements with a sound succession and development plan. "Part of creating a sustainable ethic of succession is building in a cost, beyond salary, for competitors to acquire your next-in-line executives. A properly structured SERP (supplemental executive retirement plan) adds to a competitor's cost while creating a deferred compensation incentive for your executives to stay.
