Large State Chartered CU CEOs 2015 Compensation Tops $1 Million

Chief executive officers at state chartered credit unions with at least $1 billion in assets reported an average total compensation of $1.021 million for 2015.

Median CEO compensation was $808,942 for 2015.

Compensation data are pulled from Form 990s filed by state chartered credit unions.

Federal credit unions are currently exempt from filing Form 990s and the National Credit Union Administration has not acted upon recommendations to require federal credit unions to disclose senior management compensation.

Total compensation includes base salary, bonus and incentives, other reportable income, retirement and deferred compensation, and nontaxable benefits.

DFCU Financial Credit Union (Dearborn, MI) did not disclose compensation information for its CEO and did not respond to request for this information. Advia Credit Union (Parchment, MI) did not disclose detail information on CEOs compensation in its Form 990 and only provided information regarding CEO's total compensation upon request. Lake Michigan Credit Union (Grand Rapids, MI) combined base and bonus & incentive compensation.

The mean base salary was $489,614. The average bonus and incentive pay was $148,449. The mean other compensation was $197,815. Retirement and deferred compensation was an average of $166,645.

Forty-nine credit union CEOs earned more than $1 million in 2015.

The highest paid CEO was James Jordan of Schools Financial Credit Union (Sacramento, CA) at $5.7 million. The next highest paid CEO was Teresa Halleck of San Diego County Credit Union (San Diego, CA) at almost $5.6 million.

Below is compensation data for each CEO (click on images to enlarge).

NCUA Should Require Greater Transparency Regarding CEO Pay

The National Credit Union Administration's Voluntary Merger proposal would require a merging FCU to disclose to its members all merger-related financial arrangements in whatever form they may take that are paid to its CEO, the next four highest paid employees after the CEO, the board of directors, and the supervisory committee.

In justifying the proposal, the agency cites the need for transparency and disclosure so that members can make an informed decision about a merger.

Both Chairman McWatters and Board member Metsger invoked transparency numerous times during the May 25th Board meeting, when discussing the proposal.

If transparency and disclosure is so important, then why should the National Credit Union Administration (NCUA) stop at requiring only the disclosure of merger-related financial arrangements?

NCUA should require all federal credit unions to reveal the pay of their CEOs and other highly paid employees.

Credit union members have the right to know.

This would ensure that federal credit unions are treated the same as other tax exempt organizations regarding the disclosure of executive compensation, including state chartered credit unions.

NCUA Employees Earned an Average Pay of $121,180.88 in 2016

Employees at the National Credit Union Administration (NCUA) earned an average pay (base and bonus) of $121,180.88 in 2016, according to federalpay.org.

Seventy-nine employees earned $200,000 or more in 2016.

The following table discloses the salaries of the 10 highest paid employees.

Click here to access pay information.

New York City Taxi Medallions Valued at $358,000

Signature Bank in its earnings press release provided a new data point on the value of New York City taxi medallions.

According to its second quarter earnings release and conference call transcript, Signature Bank either reserved for or wrote down each New York City taxi medallion loan by approximately $168,000 to a value of $358,000.

This would suggest New York City taxi medallion loans held by credit unions are likely to be written down further.

Read the press release.

Taxation is Not an Existential Threat to Credit Unions

As Congress looks at reforming the U.S. tax code, credit union groups are arguing that the elimination of the credit union tax exemption would cause a dramatic decline in the number of credit unions.

For example, in a July 17 letter to Senators Hatch (R - UT) and Wyden (D - OR), Carrie Hunt, EVP for the National Association for Federally-Insured Credit Unions (NAFCU), wrote: "Simply put, the tax exemption is an issue of survival for credit unions."

Hunt further wrote that "[i]f the tax exemption was removed, many would convert to banks or just go away."

Heaven forbid that a credit union converts to a bank.

It is a sad commentary that credit unions cannot survive without a federal subsidy.

I believe NAFCU is over-stating the impact of taxation on the credit union industry.

Unison Credit Union Buys Naming Rights to Youth Baseball Complex

Unison Credit Union (Kaukauna, WI) paid $375,000 to Kaukauna Youth Baseball for the naming rights to the organization's new baseball complex in Harrison.

The funds will be used to build four baseball diamonds. The facility will also include a concessions stand, restrooms, batting cages, a pavilion, a playground and 220 parking stalls.

Read the story.

NCUA Proposes to Close TCCUSF and Raise NCUSIF Equity Ratio to 1.39 Percent

The National Credit Union Administration (NCUA) Board is seeking comment on a proposed plan to close the Temporary Corporate Credit Union Stabilization Fund (TCCUSF)and to raise the equity ratio of the National Credit Union Share Insurance Fund (NCUSIF) from 1.30 percent of insured shares to 1.39 percent of insured shares.

The TCCUSF was created in May 2009 to handle the resolution of failing corporate credit unions. Without the creation of the TCCUSF, the NCUSIF would have exhausted its retained earnings and would have impaired a significant portion of insured credit unions' one percent NCUSIF capitalization deposit.

The TCCUSF is currently scheduled to be closed in 2021; however, the Federal Credit Union Act gives the NCUA Board the authority to close it before the scheduled closure. The NCUA Board is proposing to close the TCCUSF in 2017.

At closing, the assets and liabilities of the TCCUSF would be distributed to the NCUSIF, as required by law. This distribution will increase the net position and equity ratio of the NCUSIF. NCUA is estimating that the year-end NCUSIF equity ratio will be between 1.45 percent and 1.47 percent of insured shares.

The Board noted that given the nature of the assets and liabilities of the TCCUSF, this could increase the potential volatility of the NCUSIF equity ratio.

The Federal Credit Union Act defines the normal operating level of the NCUSIF equity ratio as between 1.20 percent and 1.50 percent of insured shares.

NCUA proposes to raise the normal operating level to 1.39 percent to help ensure the Share Insurance Fund has sufficient equity to withstand a moderate recession without the equity ratio falling below 1.20 percent, at which point a premium or fund restoration plan would be required by statute.

The NCUA expects that credit unions will receive a NCUSIF distribution (dividend payment) between $600 million and $800 million for 2018.

Comments are due by September 5.

Read the press release.