Editor's note: To read a complete version of this article, with charts and a small sidebar, please see the print version in the August 2012 issue of Credit Union Management. CUES members and magazine subscribers can access a digital version of the print magazine--including this article with all the charts--in the top, right corner of this page.
Nobody’s crowing about a big economic comeback yet, but trends in credit union executive compensation point to continued guarded optimism about the state of our industry, with salary and incentive/bonus increases posting gains for the second consecutive year, according to data from the 2012 CUES Executive Compensation Survey.
Even more intriguing is a comparison with comparably sized banks that shows CEOs at larger credit unions outearning their banking peers—for the third straight year. The compensation survey is administered by enetrix™, Middleton, Wis., which also conducts the credit union/banking industry comparison for CUES.
Chief executive officers received an average 5.93 percent increase in base salary plus bonus/incentive pay over the past year, based on a matched sample of CUs reporting data in both 2011 and 2012. That average raise is the highest since 2008, up from a 5 percent increase in 2011 and 2.54 percent in 2010, which was the low-water mark for at least a decade. The high point, in 2006, was 9.58 percent.
Average base plus bonus compensation for CEOs ranged from $86,582 at credit unions with less than $30 million in assets to $523,694 at credit unions with $1 billion in assets or more. Average base plus bonus compensation for all CEOs whose credit unions reported survey data was $260,807.
“My sense is that these things move relatively slowly, both coming up and going down, with the exception of 2008-2009 when everyone crashed together,” says Scott Dettmann of Carlson Dettmann Consulting, Middleton, Wis. “The positive news is that we’re starting to edge up again in terms of increases in pay for the executive staff.”
One consistent pattern in the survey data is that credit unions always report when they fill out their surveys that they’re planning on giving executive raises in a certain range for the next year, but when that year rolls around, total compensation increases are typically about double that amount, Dettmann notes. So if they’re feeling cautious, boards predict raises in the 2 percent range and actually boost salaries around 4 percent. And if they say 4 percent, executives end up with an average 8 percent increase. That trend was borne out again in this year’s survey, with credit unions anticipating raises in the 3 percent range, which actually worked out to about a 6 percent average.
The overall data is based on compensation information submitted by 578 CUs from May 1, 2011, to April 30, 2012, with 96 percent of participants supplying salary and bonus data for their CEOs. Survey participation is up substantially from 2011, when 467 credit unions submitted data, which may be an indication that interest in and attention to providing competitive compensation is on the upswing.