COVINA, Calif. — Performance objectives for the executive team can't be too general that they prevent a leader from directly influencing the objective, advises Executive Compensation Solutions.
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"The objective has to be specific and tie directly to the area the executive oversees," said Bridget McNamara-Fenesy, senior client consultant to ECS here.
McNamara-Fenesy shares that advice and other steps CUs need to take to ensure they build and retain top talent as all types of financial institutions increase efforts to lure away staff.
- Pay more attention to development of the executive team, and not just the CEO, so the CU has a strong "bench." Succession planning should also include the executive team.
- Emphasize "pay for performance," tying variable pay to the specific objectives of the credit union.
- Develop a compensation philosophy, write it down, and have it articulated so the credit union has a benchmark and guidepost for making comp decisions.
- Create a succession plan that includes a component that addresses what to do in the event of an unforeseen vacancy in the CEO position.
- During strategic planning, think about the annual objectives for the membership and then translate those into individual objectives for executives.
