COVINA, Calif.-Credit union CEOs who were eligible for a raise saw base pay levels increase by a national average of 6.62%, up slightly from 6.54% last year, according to Executive Compensation Solutions' 9th annual compensation and benefits survey for the credit union movement.
However, the increase once again did not keep pace with bank CEO raises, ECS reports. "The average base pay for credit union CEOs was about $197,000. The bank CEO national average was $267,000," said Erin Tuckerman, director of marketing.
Despite all the banks' troubles the gap between base pay of bank and credit union CEOs continues to widen. This year the gap was $70,229, up from $51,046 last year and $24,612 in 2010. "Considering all that is going on with the banks, bank pay is still growing," said Tuckerman.
The average base CEO salary at CUs with assets of $50 million or less is $84,110 compared to $441,473 for credit unions with more than $2 billion in assets.
The study showed credit unions are doing the right things to keep top talent. Tuckerman said CUs are seeing the importance of paying for good talent to lead them through challenging times. The study pointed out that the key to maintaining an edge in a highly competitive market is having a talented executive team.
"A major component in finding and retaining that team is a competitive compensation and benefits package," said Tuckerman. "Credit unions are starting to provide more long-term incentive programs for their senior management teams, not just the CEO."
Rewards, today, are more closely tied to CEO and CU performance, with more credit unions emphasizing objective measurements for determining short-term incentives over board discretion. Loan growth was the leading performance factor for the third year in a row. "Credit unions are trying to provide more incentive programs to keep the CEO around and to help them reach the goals for the credit union and the membership," said Tuckerman.
Gender Gap In Pay
The study showed a gender gap exists within credit union CEOs, with 71% of CEOs male and 29% female. Female CEO base salary lags behind males by 20%, and by 22% less in total comp.
"But it is interesting what is happening in the ranks of the large credit unions," noted Tuckerman. "In credit unions above $2 billion, 23% of CEOs are women, this is a good representation in this asset size and is believed to be higher in the credit union marketplace than in several other financial service sectors. Not surprising is that the highest percentage of female CEOs lies within credit unions under $50 million in assets."
While some CU board and HR teams may be gauging their pay against banks, where they should really pay attention is other credit unions, advised Tuckerman. "People who join the credit union movement, for the most part, like to remain with credit unions."
Among the data:
* The average tenure for CEOs in their present positions is 12 years.
* 49% of respondents reported the CEO's highest level of education was a bachelor's degree (down from 56% last year), while the percentage reporting the CEO's highest level of education was a master's degree increased to 33% from 27%.
* In 2006, only 49% of all CUs had a written succession planning strategy. In 2012 that figure rose to 69%.
ECS mailed questionnaires to more than 2,000 credit unions in June and received 282 responses by September.