The story about executive pay has become entwined with the credit union industry's efforts to preserve its exemption from Oahu's property tax.
The article notes:
The secretive nature of management pay is raising questions at a time when the industry is lobbying to preserve one of its key public subsidies: an exemption from Oahu property taxes.
The 10 largest credit unions in Hawaii declined or did not respond to a Star-Advertiser request to voluntarily disclose compensation data for their five highest-paid executives.
All of Hawaii's credit unions are federally chartered. Federally chartered credit unions are not required to file Form 990s, like other tax exempt organizations. As a result, the pay package of top credit union management is not disclosed.
In addition, credit unions on Oahu are just not exempt from federal and state income taxes; but also exempt from property taxes. Regardless of the value of the property, credit unions only pay a minimum of $300 for each parcel they own. This amounts to real savings for credit unions.
Credit union advocates will contend that executive compensation and their exemption from property taxation are unrelated. I disagree. As tax exempt organizations, federal credit unions receive a valuable public subsidy and there is a need to ensure that this subsidy is going for its intended purpose and not excessive compensation.
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