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CU Snapshot

 Feb '18Jan '18
# of CUs5,7575,758
Total Assets
($ billions)
Total Savings
($ billions)
Net Cap.
Loans to Savings82.6%84.1%
Loan Delinq.0.8%0.9%

         Credit Union Indicators

Compensation Strategies for CEOs

Continuously review and update CEO total compensation plans.

The executive compensation landscape has been undergoing a sea change.

The changes force credit unions—dealing with intense competition for high-performing executives and calls by regulators to expand compensation disclosures—to continuously review and update their chief executives' total compensation plans.

"Credit unions must examine their current executive compensation plans to ensure they're in line with industry standards and reflect the interests of members and current or potential CEOs," according to the 2013-2014 CUNA Total Compensation Report, CEO.

Pay increases

Like the economy, total compensation is on the rebound.

Annual increases are returning to their prerecession levels. Both base salary and variable pay (incentives and/or bonuses) are on the rise. On average, total compensation was up about 7% in 2012.

Boards should measure their compensation and retention strategies for top leadership with those of their peers.

The improving economy provides more opportunity for CEOs to find employment elsewhere as well as for aging CEOs to retire.

Typical packages

The typical total compensation package includes a mix of base salary, variable pay, benefits, and perks.

This is how these elements typically break down at credit unions with $100 million or more in assets, according to the report:

Base salary accounts for 84% of the total compensation package;

Variable pay makes up 7%;

Benefits add another 6%;

Vehicle perks equal 2%; and

Other perks make up 1%.

Overall, the median credit union CEO earned $246,551 in total compensation in 2012, or 6.9% higher than in 2011.

Retention strategies

Retaining top performers should be the goal of every total compensation plan.

Two strategies that many credit unions use include:

Employment contracts. About 40% of CEOs of these credit unions have a written employment contract or agreement with the board of directors. These agreements help to define roles and align organizational goals with executive performance.

CEO succession plans. About 63% of credit unions have formal plans in place, while another 13% expect to create one in 2013. With a lack of leadership skills in the current job market, these credit unions don't want to find themselves struggling to find quality leadership.

The 2013-2014 CUNA Total Compensation Report is available instantly to Complete Subscribers and available for purchase to Expanded and Basic subscribers here.

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