NCUA To Ban Golden Parachutes For Troubled CUs
ALEXANDRIA, Va. – The NCUA Board is expected to approve a rule next week that would restrict executive compensation packages for managers who have contributed to the condition of troubled credit unions.
The Golden Parachute proposal, similar to one adopted for corporate credit unions, would bar credit unions from entering into lucrative retirement agreements with executives who may have contributed to the condition of a credit union that has failed, been conserved, is undercapitalized, or has been rated either CAMEL 4 or 5.
The rule would exempt existing agreements on "nondiscriminatory" severance packages. That means executives who may have helped cause big losses would still be able to keep longtime retirement packages they have already earned, such as the $7-million severance package awarded WesCorp FCU CEO Robert Siravo after NCUA took over the failed corporate in 2009.
Credit unions also would be prohibited from paying or reimbursing an executive’s legal or other professional expenses incurred in administrative or civil proceedings instituted by NCUA or the appropriate state regulatory authority where the executive is assessed a civil money penalty, removed from office or made subject to a cease and desist order.