CUNA report: CU CEO pay declined 3.5 percent in '09
09/09/2010 10:08 am
Nationally, credit union CEO total compensation declined 3.5 percent in 2009, and that decline can be traced to a reduction in variable pay, says a new Credit Union National Association (CUNA) report.
Overall, 59 percent of CEOs of credit unions with $100 million or more in assets received a bonus and/or incentive reward in 2009, down from 73 percent in 2008, according to the 2010-2011 CEO Total Compensation Survey Report. The median amount awarded in 2009 is $16,345, down 37 percent from $26,000 in 2008.
"Because credit unions cannot offer the equity vehicles which make up the bulk of compensation packages for CEOs of publicly traded companies, base salary comprises the largest portion of the total compensation package for credit union CEOs," said Beth Soltis, CUNA senior research analyst. "Therefore, credit unions have historically used variable pay plans to reward performance and boost credit union CEO compensation levels."
"In fact, if CEOs are eligible for variable pay but don't receive payouts and perceive the cause to be external market factors they cannot control, the result can be diminished motivation and a greater likelihood for them to seek opportunities elsewhere," she added. "As business performance improves, credit unions will need to evaluate their variable pay plans--and their ability to provide payouts--in order to reward and retain their CEOs."