Wednesday, December 21, 2016

Corporate CUs Are Required to Disclose Executive Pay, Then Why Not All FCUs

It is time for the National Credit Union Administration (NCUA) to require natural person federal credit unions to disclose senior management compensation.

Let's look at the facts, state-chartered credit unions are required to disclose senior management compensation via Form 990s. Also, NCUA requires a corporate credit union to annually prepare and maintain a disclosure of the dollar amount of compensation paid to its most highly compensated employees, including compensation paid to the corporate credit union's chief executive officer (read the regulation).

NCUA's corporate credit union regulation states that a corporate credit union "must distribute the most current disclosure to all its members at least once a year, either in the annual report or in some other manner of the corporate's choosing."

The regulation also states that "[a]ny member may obtain a copy of the most current disclosure, and all disclosures for the previous three years, on request made in person or in writing. The corporate credit union must provide the disclosure(s), at no cost to the member, within five business days of receiving the request."

The rule allows a corporate credit union to provide supplemental information to add context, such as salary surveys.

If NCUA believes that it is appropriate for corporate credit unions to disclose compensation information to its members, then why hasn't NCUA required natural person federal credit unions to do the same thing.

Clearly, requiring such a disclosure would improve accountability and transparency and would promote good corporate governance.

1 comment:

  1. Keith - Don't hold your breath. What sum of these credit union CEO's take down in salary borders on extortion. It is a shake down. Add to the salary the SERP (Senior Executive Retirement Plan) and it now becomes criminal. Former WesCorpFCU CEO Bob Siravo cashed in his SERP @ $6M large. The NCUA settled with Bob and got a 10% kick back. Big Deal. He gets $6M and refunds to the NCUA $600,000 not a bad trade. Bob was issued an NCUA work prohibition order. So what, he still has $5.4M. Not too shabby. Where do I sign up to do such a trade?



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