Wednesday, August 2, 2017

Large CU CEOs in 2015 Earned 13.15 Times More Than Their Employees

CEOs of federally insured state chartered credit unions with at least $1 billion in assets earned on average almost 13.15 times more than their average employee compensation in 2015.

The median executive compensation to average employee compensation ratio was 10.19.

Total CEO compensation is pulled from Schedule J of a credit union's Form 990.

To calculate average credit union employee compensation, the analysis divided the Call Report line item Employee Compensation & Benefits by Full Time Equivalent Employees. Full Time Equivalent Employees = The Number of Full Time Employees + (0.5 times the Number of Part Time Employees).

The following graph shows that there is a positive relationship between CEO compensation and the ratio of CEO compensation to average employee compensation.


The credit union with the highest multiple of CEO compensation to average employee pay in 2015 was San Diego County Credit Union. Teresa Halleck, CEO of the credit union, earned 71.93 times the average compensation of San Diego County Credit Union's employee.

The following table lists the ten credit unions with the highest multiple of CEO compensation to average employee compensation in 2015 (click on the image to enlarge).



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5 comments:

  1. AnonymousAugust 2, 2017 at 1:55 PM

    As with your previous post, these numbers may include significant payouts for retirement/deferred comp that was built up for many years of service to the credit union. It would be interesting to compare with for-profit banks of comparable size to see who is over paid.

    ReplyDelete
  2. AnonymousAugust 2, 2017 at 5:18 PM

    I don't understand what the graph proves. I would assume that the average pay at the majority of similar businesses (i.e. credit union industry) would be fairly close, so of course the ratio would be higher for those credit unions that have higher CEO pay. I guess, like the other individual wrote, a better comparison would be the credit union average to that of other industries to determine if credit unions are "overpaying" their CEOs.

    To be fair, the pay of any individual at any business should be based on supply and demand for the position. If a market is highly competitive for competent talent to serve in leadership positions, then should they not be allowed to pay higher salaries to capture that talent? Or is the point you're trying to make that since credit unions aren't taxed, there's no logical reason that these CEOs should be making the pay they make? Salaries and compensation packages are determined by the board of directors, who ultimately are responsible to the members of the credit union. If people aren't happy with what Mr./Mrs. CEO makes, then the members should be demanding changes either in leadership and/or on the board. If employees aren't happy that their CEO is paid so much, then they can find another job.

    Who cares what the individual credit union determines is appropriate pay for a position? Don't spin it to be some issue related to tax exemption or anything else it isn't. And yes, I work at a smaller credit union, and no, I don't think it taints the credit union industry that a larger credit union has determined that the compensation for their CEO is whatever you have listed in your chart. If the credit union is serving its mission, then they should determine a fair wage for their staff.

    ReplyDelete
    Replies
    1. Keith LeggettAugust 3, 2017 at 8:43 AM

      Publicly traded companies will be required to disclose the ratio of CEO pay to median employee pay in their proxy statements in 2018.

      It is possible that this pay ratio disclosure will become the norm for not-for-profit organizations.

      Delete
  3. StuartPAugust 4, 2017 at 3:05 AM

    Pigs at the trough. Legends in their own mind. They actually believe they are worth it.

    ReplyDelete
  4. StuartPAugust 4, 2017 at 1:36 PM

    The CEO mission and business plan at these credit unions is simple. Self-inrichment at the members expense. Just look at their fee schedule and horrible below market dividends. Shakedown the customers to benefit the corporate whore CEO.

    ReplyDelete

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