Top executives at huge banking companies on the East and West coasts grab headlines for their multimillion-dollar pay packages, but Midwest community bankers also rack up the perks.
In a survey of banks and bank holding companies in the region, half the respondents with assets of $200 million to $500 million said their chief executive officers received stock options and country club memberships this year. Sixty-eight percent of the CEOs were provided with provided cars as part of their annual compensation, and 17% got spouse travel benefits.
At community banks and holding companies with more than $1 billion of assets, 60% of the CEOs got stock options, 57% country club memberships, and 53% a car. None received spouse travel benefits.
The survey was done by Crowe Chizek & Co., an Indianapolis accounting and consulting firm. It sent questionnaires to 1,900 banks and holding companies in Indiana, Ohio, Michigan, and Illinois. About three-fourths of the 493 responses came from holding companies based in those states, the rest from banks.
Total CEO compensation - salary plus bonus - averaged $108,353 at the banks with $50 million to $100 million of assets, $192,148 at those with $200 million to $500 million, and $449,780 at those with more than $1 billion. (These figures exclude the holding companies.)
Generally, bankers in the Midwest have fewer benefits and lower salaries than those on the East or West coast, but their perks mirror their needs, said Alan Johnson, a managing director at Johnson Associates, a New York compensation consulting firm.
Golf memberships, for example, may be more important to bankers in the Midwest than to those in other regions, Mr. Johnson said, because midwestern executives may make more direct sales.
In contrast, executives on the East or West coast tend to demand first-class air travel and extra vacation to compensate for more international trips and longer periods away from home, he said.
Mr. Johnson said perks are excessive. "I think that bankers still have too many of these things," he said. Instead he advocates higher salaries and additional incentives, which are less costly to administer.
"Banks are slower than most groups to change their benefits," Mr. Johnson said. Nonetheless, they are following the rest of the business community in shifting to performance-based compensation packages.
Andrea Redmond, a managing director at the executive recruiting firm Russell Reynolds Associates Inc. in New York, said the focus is "less on the perquisites and more on the options side."
"People want equity," she said. "That's where the money can be made."
Ms. Redmond listed base salary, bonus, options, and restricted stock as the compensation components that bankers push for most in their contracts. They are also demanding a "change in control" clause, which has grown more important because of mergers.