An article in the Long Island Business News (LIBN)(paid subscription) looked at the pay increases at credit unions.
Citing results from Credit Union Executive Society survey, the LIBN stated "total credit union CEO compensation rose 8.18 percent in 2013, up from a 5.83 percent increase in 2012 and a 5.07 percent increase in 2011."
According to the article, the average total CEO compensation for all credit unions was $256,339; but the average CEO compensation package at credit unions with more than $1 billion in assets was $552,318.
However, the article noted that "[w]hile most other nonprofits are compelled to disclose their executive compensation levels, multiple credit unions declined to disclose their numbers to LIBN."
The time is now for the National Credit Union Administration to adopt regulations requiring federal credit unions to disclose the salary of their highest paid employees as recommended by the agency's Outreach Task Force report on February 26, 2008. This would treat federal credit unions just like other nonprofit and not-for-profit organizations, including state chartered credit unions.
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The NCUA should require disclosure of not just the salary of these CEO fat cats but disclosure of their SERP (Senior Executive Retirement Plan). It sure did come as a surprise to see the WesCorp CEO Siravo SERP come in at $6M. There was no way to read that in the limited call report data published by the NCUA. And how much of Telesis CEO Grace Mayo's $2.1 Million payout in 2010 was SERP related? Not too shabby for credit unions' placed into NCUA conservatorship. Is there an inverse relationship between the size of the NCUA conservatorship losses and the SERP payout? Keith, I see a trend here. Appears the not for profit NCUA charter is profitable - profitable for the CEO's.
ReplyDeleteOf course, ALL bank CEOs should be required to follow the same standard if imposed by reguatory fiat to credit unions.
ReplyDeleteDear Anonymous:
ReplyDeleteFederal credit unions should adhere to the same disclosure requirements as other tax-exempt entities.
FCUs are following the legal and regulatory disclosure requirements for them in the same way that privately-held and Sub S banks disclose what they are legally required to do. If the law changes for one, then it should change for the other.
DeleteLove the cuna mantras over the years.
ReplyDeleteThis pay info has been out before like dirty laundry.
"Fat cat bankers" in cu clothing.
I believe that the CEO of a financial institution with assets in the hundreds of millions of dollars and above should be well paid because you need to attract high level talent. Unfortunately, I think a lot of these executives are in their positions because they have worked for their CU for 30 years and the board is comfortable with them. They are educated at schools like the University of Phoenix (no disrespect intended).
ReplyDeleteThat being said, this shouldn't be a problem because these billion dollar CU's shouldn't be CU's. They operate like banks and should be treated as such. That solves the executive pay issue...
Oops. The CU CEO cannot get stock options nor can the directors. The directors cannot get deals on loans from their bank. One key difference between banks and credit unions.
DeleteIsn't that on the 990?
ReplyDeleteThe Form 990 does contain this information. However, the Form 990 is just now being published for 2012.
ReplyDeleteThe information reported in the the news article came from a survey conducted by the Credit Union Executive Society.
Should be paid appropriately, should have same regulations as banks and should pay taxes.
ReplyDeleteAs "instrumentalities of the federal government" FCUs do not file IRS 990's, or even pay sales tax on purchases in states where they do business. State chartered CUs do both - utterly absurd!
ReplyDelete