In a letter to the Internal Revenue Service (IRS) regarding the redesign of the Form 990, the Credit Union National Association (CUNA) requested that $10,000 reporting threshold for former directors be increased to $100,000.
Part VII of the Form 990 requires the reporting organization to list any former director who had served in such capacity in the prior five years and received over $10,000 for services provided as a director.
CUNA justifies increasing the reporting threshold because of the recordkeeping burcden on small credit unions. Additionally, CUNA notes that this would create a uniform reporting threshold among all individuals for compensation reporting purposes.
However, raising the threshold to $100,000 would reduce transparency and accountability.
I can understand why CUNA took this position. It is difficult to maintain the fiction that credit union directors are volunteers, especially when some credit unions are providing generous director compensation.
Since the first state charters in the US more than one-hundred years ago, most but not all directors are uncompensated--yet none can hold an equity interest in their institution, which is the significant variant from banks. Still, both bank and CU directors carry fiduciary responsibilities which can be substantial. The premise of the posting shows a lack of in-depth industry knowledge. "Generous" compensation is relative.
ReplyDeleteDear Anonymous:
ReplyDeleteTrue, bank directors hold an equity interest and that is different from CUs. But bank directors' investments are also at risk.
This does not change the fact that some credit unions compensate their directors very well for carrying out their board duties. For example, the Form 990 for Navigant CU reports that directors and supervisory committee members in 2009 earned between $9,000 and $32,112. Trumark Financial provided almost $52,929 in compensation to one of its directors in 2009.
Again, these are the biggest examples you can find, and your characterization of "generous" seems intentionally inflammatory. The amounts could include travel and education fees rather than actual compensation; fact checking and academic completeness as well as accuracy looks to be lacking given that you cite your academic credentials. As for relativity, there are a number of good studies on bank director compensation, such as bankDirector.com's June 2011 report, at:
ReplyDeletehttp://www.bankdirector.com/index.php/magazine/archives/4th-quarter-2010/2010-director-compensation-review/
It is not the relative distance between CU and bank director compensation (if the CU director receives any real comp at all,) that should be an embarrassing offset to your deflection-narrative, it is the scope and amount of standard and customary bank directors' pay packages,