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News Now

CU System
Exec compensation related to assets performance
MADISON, Wis., and COVINA, Calif. (12/14/11)--Recent compensation and staff studies indicate that credit union CEOs' compensation and salaries are related to both asset size of their credit union and their performance.

Historically, base salary represents the bulk of a credit union CEO's total compensation package, said the Credit Union National Association's (CUNA) 2011-2012 CEO Total Compensation Survey  report, which covers compensation data from 2010. On average, base salary accounts for 86% of CEO total compensation among credit unions with $100 million or more in assets, the report said.

"There's a strong correlation between CEO compensation, especially the base salary, and the size of the credit union," said the report. "As the size of the credit union increases, so does the complexity of the operations, and CEOs are compensated accordingly."

For example, the median salary for CEOs of credit unions with $1 billion or more in assets--$411,859--is nearly three times that of their counterparts in credit unions with assets totaling $100 million to $200 million, who average $139,808, according to CUNA's 2011-2012 Complete Credit Union Staff Salary Survey. See the chart for salaries in different asset size groups.

Another survey, from Executive Compensation Solutions (ECS) of Covina, Calif., noted that tying the overall compensation package to sustainable and relevant performance measures that are aligned with the interest of the credit union and its members is becoming an increasingly important practice to attract, reward and retain key value creators.

"Financial performance and performance ratios, as well as pay practices, indicate a slow and gradual easing of the tight economic environment of the past few years," said Adam Zelinsky, ECS director of operations. "While compensation increases are not dramatic, reported responses indicated a significant decrease in the number of salary and bonus freezes, as well as a significant drop in the number of credit unions that have suspended their employer match into their 401(k) plans."

ECS's Survey 2011: Employee and Executive Compensation and Benefits for the Credit Union Movement also found a higher percentage of women among credit unions than in other financial institutions and a disparity in pay levels between male and female credit union CEOs.  ECS tied participation in its survey to raising funds for Credit Unions for Kids and raised nearly $3,000 for Children's Miracle Network Hospitals.


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