Credit unions bucked the economic trend that lead most other executives to see smaller raises this year, with CU CEO salaries growing at a faster rate than their counterparts in other industries-including banks, according to CUES' 2003 Executive Compensation Survey.
But even the higher percentage of increase didn't make much of a dent in the disparity of pay, with bank CEOs' compensation continuing to outstrip that of their credit union counterparts.
"I think the No. 1 surprise was the percent increase in salaries at credit unions," said CUES VP-Professional Development George Hofheimer. "Credit unions are really bucking the trend in terms of what is going on with the economy and how it has affected salaries."
With 86% of the CUs reporting having participated in last year's survey, as well, CUES was able to calculate a true change in salaries of those repeat participants. It found an 8% increase in CEO base salary, a 9.38% increase in CEO base salary plus bonus/incentive pay, and a 9.67% increase in CEO total compensation.
To offer a comparison between credit union executive earnings and the earnings of comparable positions at banks, CUES turned to annual compensation surveys conducted by America's Community Bankers, BAI and Independent Community Bankers of America.
"I think we all intuitively knew about the disparity in bank pay versus credit unions, but we didn't necessarily know where that disparity came from or how great it was," Hofheimer told The Credit Union Journal. "I think that was the greatest surprise."
Among credit unions with fewer than $100 million in assets, the median base salary for CEOs was $83,696, compared to a bank median base salary of $92,100. The difference was more dramatic once bonus pay was included, with the CU median base plus bonus pay coming in at $88,301 and the bank median base plus bonus pay at $98,800.
How Data Compares
Indeed, with one exception, the larger the institutions being compared, the greater the disparity. CEOs at banks with fewer than $100 million in assets had a total salary (including bonus pay) that outstripped CEOs at comparably-sized credit unions by 11.89%. In the $100 million to $249 million category, the difference favored the bankers by 12.91%. CEOs reigning over banks in the $250 million to $499 million asset range topped their credit union counterparts' salaries by 7.32%, while the CEOs of banks at $500 million to $999 million in assets made 22.91% more than CEOs of credit unions with similar assets.
The greatest disparity was found among the billion-dollar institutions, with bank CEO pay outpacing credit union CEO pay by 49.59%, and the primary source of the disparity continues to be the amount of "at risk" pay in the form of incentives and bonuses, despite the fact that credit unions are increasingly moving toward putting more executive pay at risk based on the financial performance of the institution, Hofheimer observed.
Among The Findings:
* The average total compensation for credit union CEOs ranged from $66,457 for CUs with assets fewer than $10 million to $298,458 for CUs with assets greater than $600 million. The overall average for CEO total compensation was $155,043.
* More than 78% of CEOs and other executives reported being eligible to receive bonus awards, with CEOs reporting receiving bonuses averaging 13.5% of their base salary.
* Non-CEO executive compensation increases in total compensation ranged from 7.15% to 13%, with the greatest percentage change being reported by Second Executive Officers and E-Commerce Executives.
CUSOs continue to be some sort of factor in a CEO's salary. Average total compensation in CUs with asets exceeding $400 million is reported at $289,417 if there is a CUSO, compated to $218,965 without a CUSO.
Credit unions report that they plan to increase executive pay an average of 4.9% this year and 4.6% next year, compared to approximately 4% to 4.2% for non-executive employees.
Basis For Findings
The findings of this year's survey are based on the responses of 841 CUES-member credit unions and included information on: executive compensation, executive benefits and perquisites, CEO profile information by education level and experience, and credit union profile information by asset size, loan portfolio, membership size, number of full-time equivalent employees and location.
The online database is updated throughout the year, with the printed report containing data submitted between May 1, 2002 and May 23, 2003.
The online report, available at www.survey.cues.org, enables the user to create customer reports based on asset size, number of employees, number of members, loan portfolio size, geographic region or state and size of metropolitan area.