Running a bank these days may be more demanding than ever before, but it appears that chief executives are at least being well compensated for their trouble.
A survey released last week by America's Community Bankers found that the average annual salary for community bank CEOs has climbed above $200,000 for the first time. Debra Cope, ACB's senior vice president of publishing, said it is because their jobs have become increasingly complex.
Not only are they under more competitive pressures from large banks, credit unions and other financial services providers, they are responsible for making sure their banks comply with a slew of new laws and regulations passed in recent years aimed at combating fraud and improving corporate governance.
"Banks are looking at the workload and saying it is time" to pay executives more, Ms. Cope said.
The average salary of a community bank CEO rose 13.2% in 2004, to $212,569, according to ACB's 32 annual compensation survey. The survey was conducted in the second quarter and completed by 375 banks and thrifts with assets ranging from $14 million to nearly $18 billion.
It was not just CEOs who got double-digit increases. While the average salary for bank employees increased by 4.1% nationwide, those most responsible for keeping banks out of trouble - chief financial officers, compliance officers, staff attorneys and even outside directors - are getting raises well above average, the survey found.
The national average salary for chief financial officers rose 10.8%, to $120,870, while average total compensation for outside directors increased 12.2%, to $17,786. The average salary for senior internal auditors rose 10.3%, to $67,883. General counsel salaries rose by 19.3%, to $129,259.
"Compliance never ceases to be a vital function, but we are in an environment where the workload is increasing," Ms. Cope said.
Michael Kelly, the president of Michael Kelly Associates LLC, an executive search firm in New York, said salaries are also rising because the supply of talent is not meeting the demand.
"Compensation for senior executives and compensation for directors is market-driven, and that means there's a war for talent, and that's what's driving prices up," Mr. Kelly said.
He added that it has been especially difficult to find competent, outside directors in the wake of some high-profile corporate scandals. To compensate, community banking companies increased directors' pay.
Among the survey's other findings:
- The national average base salary for chief lending officers was up 16.1%, to $114,748. Chief operating officers' salaries rose 8.8%, to $141,315.
- The Northeast is still the most lucrative region in which to be a banker. CEOs' average salary was $257,053 in the Northeast, 13% higher than in the Middle Atlantic states.
- As would be expected, CEO salaries were bigger at bigger banks. At banks with over $1 billion of assets, the average salary was $427,841. At banks with less than $50 million of assets, the average CEO salary was $92,774.
- Among rank-and-file employees, those in the Northeast got the biggest raises - 4.6%, on average, compared with 3.7% in the West.
- The smallest raises were at banks with $500 million to $1 billion of assets; there the average raise was 3.8%.
