NORTH HIGHLANDS, Calif.-According to one CEO, what deserves more attention than David Maus' retirement package is the 2010 $2.1-million payment to Grace Mayo, former CEO of the now-conserved Telesis Community CU in Chatsworth, Calif. (
However, both matters, said Henry Wirz, CEO of the $1.9-billion SAFE CU here, call into question the skill of board members on setting CEO compensation. "The Telesis payment is what I consider the more extreme case of irrational compensation. I think if you look at this credit union you would not call it emblematic of outstanding performance. Telesis is a credit union that has completely failed and their board has the outrageous habit of paying its CEO this huge payout in the face of losses that will probably cost the rest of us through insurance fund money."
Wirz said the Public Service (which is healthy and operating normally) and Telesis payouts raise the issue of board competency in salary setting for credit union leaders. "What kinds of a jobs are boards doing and are they using the right lens to measure performance? I think boards need to be accountable."
Alec Berkman, principal and CEO of Executive Compensation Solutions, Covina, Calif., differed, at least in the case of PSCU. "These credit union boards are not stupid. At Public Service it was not like the credit union was raped by some career manager on behalf of some shareholder investors. What happened there is an entirely different scenario than what we were looking at a few years ago with banks and their unsatisfactory performance driving big bonuses."
Berkman added that if Maus' retirement payout was based on a threshold of performance achievement during his 31 years, "then God bless him. On the other hand, if it was all guaranteed and Mr. Maus did not have to produce, then why did the board keep him for 30-plus years?"
Maus explained to Credit Union Journal that the annual contribution made to his retirement plan is performance-based, calculated as a percentage of his annual salary.
