Are Multi-Million-Dollar Salaries Sign Of Lost Way?
After reading the April 2, 2012 article in Credit Union Journal,"CEO's $9M Pay Draws Attention," and the related article in the Denver Post on April 15th titled "Credit union pay jumps for top execs," I felt it was necessary to respond.
I have been the CEO of Selfreliance Ukrainian American FCU since 1980. During my tenure, we have witnessed substantial upheavals in the economy, interest rates fluctuating from 20% to near zero, multiple recessions and growth spurts. With prudent management and the cooperative partnerships of the board, staff and our members, our institution has consistently maintained its viability and profitability. Selfreliance has grown from $30 million to more than $425 million and our reserves from $1 million to more than $80 million. We have always been prudent in all our operating expenditures so that we can continue to fulfill our mission of serving our members and supporting our community.
We have been active as volunteers in the national/international credit union movement. Personally I have served on committees at CUNA, NAFCU and on the board of the Illinois league. In 1996 I was surprised, humbled and honored when I became the recipient of the Herb Wegner Memorial Award.
Sadly, over the years, it has become evident that our beliefs in the credit union ideals are not shared or practiced by some of the leaders of our credit union movement with their frivolous expenditures and self-serving initiatives. They may say "people helping people" while, in reality, they are focused on themselves as is evident in the April articles.
Do large distributions highlighted in the articles reflect our cooperative movement and spirit? Does the rewarding of one individual for the success of a credit union reflect the contributions to that success by the board, the committees, the staff, the members, supporting organizations and the economic and regulatory environment?
The board of directors of every credit union is charged with a fiduciary responsibility for the overall success of the credit union in serving its members. Any decision with regards to the selection, compensation, and the authority granted a CEO has to reflect this primary overriding concern.
The articles imply that credit unions appear to be no different than banks. The question then arises as to whether these types of retirement packages are commonplace or an anomaly. How many other CEOs receive such benefits? If our credit union movement has embarked in this direction, then our uniqueness is at risk. We risk our tax-exempt status, our independent regulator and our independent insurer.
We, in fact, may be risking it all! Have we lost our way?
Bohdan W. Watral, President/CEO
Selfreliance Ukrainian American FCU, Chicago