CU Top Exec Salaries Starting To Show Modest Increases
SAN FRANCISCO-Another sign that credit unions are getting healthy again: the median base salaries of top CU executives for 2011 are up 1% to 4% from 2010 across all asset sizes.
Jack Clark, principal of Clark and Chase Research, Charlotte, N.C., said two old rules have not changed: the larger the asset size of the credit union the larger the base salary for the CEO, and the smaller the CU the less likely it is to have a bonus plan in place for its top executive.
CEO base salaries varied widely in an survey of credit unions conducted during April and May, Clark reported at NAFCU's Annual Conference here. In the smallest asset class, less than $10 million, base pay ranged from $29,000 in the 10th percentile to $65,000 in the 90th percentile. For CUs with $75 million to $150 million in assets, the 10th percentile mark was $70,000 while the 90th percentile was at $201,000.
The top tier of CUs, $750 million-plus, paid the most: $277,000 for the 10th percentile, up to $573,000 for the 90th percentile.
Of 353 federal credit unions that participated in the online survey, 47% had bonus plans for their CEOs. Of the smallest CUs, less than $10 million in assets, 48% had bonuses available. The lowest participation was by the next two tiers: $10 million to less than $20 million (30%) and $20 million to less than $40 million (35%). Eighty-three percent of CUs with $750 million or more in assets offered bonus plans.
"Although bonus percentages tend to increase as total assets increase, the relationship is not as strong as base salary is to asset size," Clark explained. "The percent of total compensation that comes from bonuses can vary greatly even among credit unions of similar size."
Given the many variations for location and market, total compensation for the 90th percentile of a smaller asset tier usually exceeded the 10th percentile of the next-larger tier. Because of this overlap, Clark said many people focus in the "Inter-quartile Range" (IQR), or the middle 50%.
Deep Gap Between Large And Small
Even the IQR for total potential compensation in 2011 shows a deep gap between CEOs of the smallest (less than $10 million) and largest ($750 million-plus) CUs. The 25th percentile for the former is $37,000 while the 75th percentile is $56,000. At the top, the range is $350,000 (25th percentile) to $541,000 (75th percentile).
Clark cautioned those making comparisons between compensation in different parts of the country.
"I am suspicious of it because of variations in asset size by region."
Further, he said the goal of the survey is to give a "good sense" of what federal credit unions do as a group with executive compensation and benefits. He said it is "not his job" nor would he want to tell CUs what to do in their situation.
"Each market is different. Information specific to a credit union is valuable, such as a 15-15 Report from Burns-Fazzi, Brock, which looks at 15 credit unions just above and 15 credit unions just below by asset size."