2012 nafcu-bfb survey of federal credit union executive benefits and compensation (credit union...

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2012 NAFCU-BFB Surveyof Federal Credit Union

Executive Benefits and Compensation

Presented byPresented by

Jack E. ClarkJack E. Clark

Clark & Chase Research, Inc.Clark & Chase Research, Inc.

July 27, 2012 July 27, 2012

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NAFCU

NAFCU Services

Burns-Fazzi, Brock

Sponsored by:Sponsored by:

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Things to consider when Things to consider when

looking at survey resultslooking at survey results•• What a survey is ... and what it is not What a survey is ... and what it is not

•• What makes a good survey What makes a good survey

–– Sample SizeSample Size

–– RepresentativeRepresentative

•• Relationship between Asset Size and Relationship between Asset Size and

CompensationCompensation

•• Using more than one survey sourceUsing more than one survey source

4

2012 NAFCU2012 NAFCU--BFB SurveyBFB Survey•• How we did the surveyHow we did the survey

•• Some FindingsSome Findings–– Top ExecutiveTop Executive

•• CompensationCompensation

•• BonusBonus

•• Percent Change in Base SalaryPercent Change in Base Salary

•• Percent of 2010 Bonus AchievedPercent of 2010 Bonus Achieved

–– Reviewing Executive Compensation Reviewing Executive Compensation

–– Nonqualified Benefit Plans Nonqualified Benefit Plans

–– Cars and Car AllowancesCars and Car Allowances

•• Q & AQ & A

•• 2012 Survey Summary Report2012 Survey Summary Report

Looking atLooking at

Survey Results Survey Results

5

6When Looking at Survey DataWhen Looking at Survey Data

Surveys are Surveys are estimatesestimates of the larger of the larger

population (Federal Credit Unions)population (Federal Credit Unions)

•• Otherwise Otherwise –– guessing or guessing or

anecdotal information anecdotal information

How good these estimates are is How good these estimates are is

based on a few things . . .based on a few things . . .


Is the sample representative?Is the sample representative?

•• All Federal CUs have an All Federal CUs have an equalequal

chance of being included?chance of being included?

•• Random vs. subjective selection? Random vs. subjective selection?

•• SelfSelf--selectionselection –– Are those who Are those who

participate markedly different from participate markedly different from

those who donthose who don’’t participate? t participate?

�� True for most salary surveysTrue for most salary surveys

If how the sample was selected is If how the sample was selected is

not in surveynot in survey’’s methodology, ask. s methodology, ask.

8Sample SizeSample Size

The sample size of the overall study is The sample size of the overall study is

not the only sample size of concern not the only sample size of concern

•• When looking at results for When looking at results for FCUsFCUs

within a certain group (those with within a certain group (those with

$40M$40M--$75M in assets, for example) $75M in assets, for example)

the size of that sample is what the size of that sample is what

matters. matters.

Very small samples provide very Very small samples provide very

unreliable resultsunreliable results


50 100 150 200 250 300 350 400 450 500

Sample Size

Low Margin of Error High

All FCUs (4,446)

FCUs w/Assets <$10M (1,736)

FCUs w/Assets $75-150M (392)

FCUs w/Assets $750M+ (121)

Regardless the size of the population we are interested in, whether it is all 4,446 Federal CUs or only the 121 FCUs with $750M+ in assets, the margin of error for very small samples is similarly very high.

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Total AssetsTotal Assets

# of Employees# of Employees

# of Members# of Members

Total Loans/LeasesTotal Loans/Leases

Years as Exec Years as Exec

EducationEducation

U.S. RegionU.S. Region

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

1 11 21 42 85 171 405 3,041

Total Assets in Millions

Compensation

13Top ExecutiveTop ExecutiveTotal Compensation (Total Compensation (Base+BonusBase+Bonus))

Asset sizeAsset size and and total compensationtotal compensation are are

highly correlated. Therefore, as asset highly correlated. Therefore, as asset

size increases, total compensation size increases, total compensation also tends to increase. also tends to increase.

Source: Source: 2012 NAFCU/BFB Survey of Federal Credit Union Executive Benefits2012 NAFCU/BFB Survey of Federal Credit Union Executive Benefits & Compensation& Compensation

14Relationship Between Total Relationship Between Total

Compensation and Other VariablesCompensation and Other VariablesCorrelation to Correlation to

Top ExecutiveTop Executive’’ss

Total Total

Compensation*Compensation*

Total Assets Total Assets .83.83

# of Employees# of Employees .82.82

# of Members# of Members .82.82

Total LoansTotal Loans .79.79

# of Branches# of Branches .75.75

EducationEducation .39.39

Years as an ExecYears as an Exec .17.17

* Correlations based on analysis of 2012 NAFCU/BFB Survey * Correlations based on analysis of 2012 NAFCU/BFB Survey

of Federal Credit Union Executive Benefits & Compensationof Federal Credit Union Executive Benefits & Compensation

Highly related to each other

– all measure of credit union’s

size

15

How valuable is it to How valuable is it to compare compensation compare compensation

by region?by region?

16Federal Credit UnionFederal Credit Union

Asset Size Varies by RegionAsset Size Varies by Region

Region:Region: NENE SESE MidMid WW

Total AssetsTotal Assets 100%100% 100%100% 100%100% 100%100%

<$10M<$10M 44%44% 38%38% 41%41% 26%26%

$10M $10M –– <20M<20M 15%15% 15%15% 16%16% 15%15%

$20M $20M –– <40M<40M 13%13% 13%13% 15%15% 15%15%

$40M $40M –– <75M<75M 10%10% 10%10% 10%10% 14%14%

$75M $75M –– <150M<150M 7%7% 9%9% 9%9% 12%12%

$150M $150M –– <335M<335M 6%6% 7%7% 5%5% 7%7%

$335M $335M –– <750M<750M 3%3% 4%4% 3%3% 6%6%

$750M+$750M+ 2%2% 4%4% 2%2% 4%4%

FCU MedianFCU Median $12M$12M $17M$17M $16M$16M $34M$34M

FCU AverageFCU Average $95M$95M $102M$102M $76M$76M $148M$148M

Source: NCUA Data Query conducted 4/8/12Source: NCUA Data Query conducted 4/8/12

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CostCost--ofof--living Indexliving Index

Considered when making Considered when making decisions regarding decisions regarding compensation?compensation?

http://http://www.kiplinger.com/tools/bestcities_sortwww.kiplinger.com/tools/bestcities_sort//

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•• Most of the timeMost of the time -- Results by size Results by size (asset size, for example) is more useful (asset size, for example) is more useful than the overall results.than the overall results.

•• HoweverHowever, when looking at overall , when looking at overall results results -- important there is an important there is an adjustment (weighting) for asset groups adjustment (weighting) for asset groups that are overthat are over--oror--underrepresentedunderrepresented

•• OtherwiseOtherwise �� Overstated figuresOverstated figures–– OverOver--represented group unfairly influences the represented group unfairly influences the resultsresults

Overall Survey ResultsOverall Survey Results

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Comparing the Results From Comparing the Results From Two or More SurveysTwo or More Surveys

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•• More than one resource can strengthen More than one resource can strengthen your position and the decisionyour position and the decision–– If both are valid, reliable & similar in focusIf both are valid, reliable & similar in focus

•• What are differences? How might that What are differences? How might that affect the results? affect the results?

•• Even then Even then -- difficult to do an applesdifficult to do an apples--toto--apples comparison apples comparison

Comparing Two+ SourcesComparing Two+ Sources

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Even if both surveys are good sources, Even if both surveys are good sources, comparison can be difficult . . . .comparison can be difficult . . . .

•• Each likely uses different asset ranges Each likely uses different asset ranges –– Example:Example: CU with $225M in Assets CU with $225M in Assets –– One survey One survey shows compensation figures for credit unions in shows compensation figures for credit unions in the $200Mthe $200M--$350M range and other shows them for $350M range and other shows them for those in the $100Mthose in the $100M--$250M range$250M range

–– Considering relationship between asset size and Considering relationship between asset size and compensation, you have to adjust compensation, you have to adjust

•• Similar term but different meaningSimilar term but different meaning

•• As estimates, figures are often similar As estimates, figures are often similar but but notnot the samethe same

Comparing Two+ SourcesComparing Two+ Sources

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* Correlations based on analysis of 2011 NAFCU/BFB Survey * Correlations based on analysis of 2011 NAFCU/BFB Survey

of Federal Credit Union Executive Benefits & Compensationof Federal Credit Union Executive Benefits & Compensation

Keeping Your PerspectiveKeeping Your Perspective

Our goal is to give you a good sense Our goal is to give you a good sense

of what other Federal credit of what other Federal credit

unions do, unions do, as a groupas a group, re: , re:

compensation and benefitscompensation and benefits–– Not tell you what to do in your situation Not tell you what to do in your situation

Every specific situation is unique Every specific situation is unique

and many factors will also affect and many factors will also affect

your executive compensation planyour executive compensation plan

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How We Did It How We Did It

24• All Federal Credit Unions were invited to participate

• Completed Feb.29 to Mar.23, 2012

• 428 Credit Unions participated

• Information for 1,159 Executives• 428 Top Executives

• 283 #2 Executives




252012 NAFCU2012 NAFCU--BFB SurveyBFB Survey

Population vs. Sample by U.S. RegionPopulation vs. Sample by U.S. Region

FCUsFCUs** SurveySurvey

NortheastNortheast 33%33% 29%29%

SoutheastSoutheast 19%19% 22%22%

MidwestMidwest 31%31% 29%29%

WestWest 16%16% 20%20%

*Source: NCUA Data Query conducted 4/8/12*Source: NCUA Data Query conducted 4/8/12

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Federal CUs*Federal CUs**NCUA*NCUA SampleSample4,4464,446 428428

<$10M<$10M 39%39% 13%13%

$10M $10M –– <20M<20M 15%15% 15%15%

$20M $20M –– <40M<40M 14%14% 14%14%

$40M $40M –– <75M<75M 11%11% 13%13%

$75M $75M –– <150M<150M 9%9% 13%13%

$150M $150M –– <335M<335M 6%6% 14%14%

$335M $335M –– <750M<750M 4%4% 11%11%

$750M+$750M+ 3%3% 8%8%

2012 NAFCU2012 NAFCU--BFB SurveyBFB SurveyPopulation vs. Sample by Asset SizePopulation vs. Sample by Asset Size

*Source: NCUA Data Query conducted 4/8/12*Source: NCUA Data Query conducted 4/8/12

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In addition,In addition,

Data is Data is weightedweighted based onbased on

–– Total AssetsTotal Assets**

–– Number of EmployeesNumber of Employees**

–– RegionRegion**

–– NAFCU MembershipNAFCU Membership

Result: Sample representing Result: Sample representing

Federal Credit UnionsFederal Credit Unions

*Source: NCUA Data Query, May 23, 2011*Source: NCUA Data Query, May 23, 2011

28Asset GroupsAsset Groups

SampleSample Fed CUsFed CUsAsset GroupAsset Group SizeSize RepresentedRepresented

<$10M<$10M 5454 1,7361,736

$10M $10M –– <20M<20M 6262 680680

$20M $20M –– <40M<40M 6060 622622

$40M $40M –– <75M<75M 5555 465465

$75M $75M –– <150M<150M 5757 392392

$150M $150M –– <335M<335M 5959 264264

$335M $335M –– <750M<750M 4545 166166

$750M+$750M+ 3636 121121

We will present results by asset sizeWe will present results by asset size

29DefinitionsDefinitions What is a Percentile?What is a Percentile?

LowestLowest HighestHighestValueValue ValueValue25th25th

PercentilePercentile

50th50thPercentilePercentile

(Median)(Median)

75th75thPercentilePercentile

30

SelectedSelected

FindingsFindings

31

2012 2012

Potential Total Potential Total


(Base & Bonus)(Base & Bonus)

for for

Top ExecutiveTop Executive

32Top ExecutiveTop Executive

2012 Potential 2012 Potential

Total CompensationTotal Compensation

Base Salary & BonusBase Salary & Bonus

Compensation Compensation Expressed in Thousands($)Expressed in Thousands($)$10M$10M $20M$20M $40M$40M $75M$75M $150M$150M $335M$335M $750M$750M

CU Assets:CU Assets: <$10M<$10M <20M<20M <40M<40M <75M<75M <150M<150M <335M<335M <750M<750M PlusPlus


9090THTH 7474 9191 103 103 161161 182182 257257 418418 588588

7575THTH 5959 7676 9494 121121 161161 230230 296296 556556

6060THTH 5050 7070 8787 113113 140140 204204 290290 494494

5050THTH 4545 6767 8585 112112 137137 191191 283283 413413

4040THTH 4343 6363 8080 108108 131131 180180 240240 373373

2525THTH 3939 5555 7575 101101 116116 151151 226226 338338

1010THTH 2222 4545 6464 9595 108108 135135 174174 300300








9090THTH 7474 9191 103 103 161161 182182 257257 418418 588588

7575THTH 5959 7676 9494 121121 161161 230230 296296 556556

6060THTH 5050 7070 8787 113113 140140 204204 290290 494494

5050THTH 4545 6767 8585 112112 137137 191191 283283 413413

4040THTH 4343 6363 8080 108108 131131 180180 240240 373373

2525THTH 3939 5555 7575 101101 116116 151151 226226 338338

1010THTH 2222 4545 6464 9595 108108 135135 174174 300300

OutliersOutliers








9090THTH 7474 9191 103 103 161161 182182 257257 418418 588588

7575THTH 5959 7676 9494 121121 161161 230230 296296 556556

6060THTH 5050 7070 8787 113113 140140 204204 290290 494494

5050THTH 4545 6767 8585 112112 137137 191191 283283 413413

4040THTH 4343 6363 8080 108108 131131 180180 240240 373373

2525THTH 3939 5555 7575 101101 116116 151151 226226 338338

1010THTH 2222 4545 6464 9595 108108 135135 174174 300300

Inter-quartile Range (IQR)

2012 Comparison Credit Unions. . . .Potential Total Potential BonusCompensation *Base % of $ Total Loans/ Number of . . . . (Base & Bonus) Salary Base Amount Assets Leases Members Employees Branches

%tile

10th $135,000 $130,000 0% $0 $157M $79M 11,300 36 225th $151,000 $146,000 0% $0 $192M $109M 18,300 52 440th $180,000 $170,000 3% $5,000 $226M $117M 20,800 62 550th $191,000 $180,000 7% $12,000 $242M $128M 21,800 68 560th $204,000 $186,000 10% $17,000 $250M $136M 24,900 72 675th $230,000 $212,000 15% $24,200 $276M $166M 28,600 92 990th $257,000 $229,000 20% $37,500 $296M $195M 34,700 111 11

Results based on surveying 59 top executives at credit unions in this asset group

* Rounded to nearest thousand** Rounded to nearest hundred

35Top ExecutiveTop ExecutiveExample Report TableExample Report Table

Federal Credit Unions with Total Assets of $150 Million to Less Than $335 Million

36

2012 2012

Potential BonusPotential Bonus

for Top Executivefor Top Executive

37

All All FCUsFCUs 56%56%

<$10M<$10M 53%53%

$10M $10M –– <20M<20M 43%43%

$20M $20M –– <40M<40M 55%55%

$40M $40M –– <75M<75M 65%65%

$75M $75M –– <150M<150M 56%56%

$150M $150M –– <335M<335M 67%67%

$335M $335M –– <750M<750M 84%84%

$750M+$750M+ 84%84%

2012 Bonus Plans2012 Bonus PlansTop ExecutiveTop Executive

Percent of Top Execs Who Have a Bonus PlanPercent of Top Execs Who Have a Bonus Plan

0

10

20

30

40

50

1 11 21 42 85 171 405 3,041

Total Assets in Millions

Bonus Percentage

382012 Bonus Percent2012 Bonus PercentTop ExecutiveTop Executive

Although Although bonus percentages bonus percentages tend tend

to increase as total assets increase, to increase as total assets increase,

the relationship is not that strong the relationship is not that strong ––

the portion of compensation at risk the portion of compensation at risk

varies quite a lot even among credit varies quite a lot even among credit unions of similar size. unions of similar size.

39

2011 to 2012 2011 to 2012

Percent Change inPercent Change in

Base SalaryBase Salary



2011 to 2012 Change 2011 to 2012 Change

in Base Salaryin Base Salary

$10M$10M $20M$20M $40M$40M $75M$75M $150M $150M $335M $335M $750M$750MCU Assets:CU Assets: <$10M<$10M <20M<20M <40M<40M <75M<75M <150M<150M <335M<335M <750M<750M PlusPlus


9090THTH 7% 7% 5% 5% 9% 9% 8%8% 7%7% 12%12% 6%6% 9%9%

7575THTH 3% 3% 4% 4% 4% 4% 5%5% 5%5% 5%5% 4%4% 8%8%

6060THTH 2% 2% 3% 3% 3% 3% 4%4% 5%5% 5%5% 3%3% 6%6%

5050THTH 0% 0% 2% 2% 2% 2% 4%4% 4%4% 4%4% 3%3% 6%6%

4040THTH 0% 0% 1% 1% 1% 1% 3%3% 3%3% 3%3% 2%2% 5%5%

2525THTH 0% 0% 0% 0% 0% 0% 2%2% 1%1% 1%1% 0%0% 0%0%

1010THTH 0% 0% 0% 0% 0% 0% 0%0% 0%0% 0%0% 0%0% 0%0%

Percent Change from 2011 to 2012Percent Change from 2011 to 2012

41

Last YearLast Year’’s (s (‘‘11) Bonus 11) Bonus


Actual as a PercentActual as a Percent

of Potentialof Potential BonusBonus

42

PercentilePercentile 20112011

9090thth 106%106%

7575thth 100%100%

6060thth 100%100%

5050thth 100%100%

4040thth 100%100%

2525thth 81%81%

1010thth 54%54%

AverageAverage 89%89%

Top ExecutiveTop Executive% of Bonus Plan Received% of Bonus Plan Received20112011

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PercentilePercentile 20112011 20102010 20092009

9090thth 106%106% 151%151% 109%109%

7575thth 100%100% 114%114% 100%100%

6060thth 100%100% 100%100% 97%97%

5050thth 100%100% 100%100% 91%91%

4040thth 100%100% 96%96% 87%87%

2525thth 81%81% 80%80% 63%63%

1010thth 54%54% 27%27% 0%0%

AverageAverage 89%89% 107%107% 79%79%

Top ExecutiveTop Executive% of Bonus Plan Received% of Bonus Plan Received2010 vs. 20092010 vs. 2009

44

Reviewing Reviewing

Executive Executive


PlansPlans

45Executive Executive

CompensationCompensationReview of Compensation PlanReview of Compensation Plan

6%

18%

Yes, currently reviewing

Yes, planning to review

““Is your credit union planning to review your Is your credit union planning to review your

overall executive compensation plan?overall executive compensation plan?””

46

““Is your credit union planning to review your Is your credit union planning to review your

overall executive compensation plan?overall executive compensation plan?””

$10M $10M $20M$20M $40M$40M $75M $75M $150M $150M $335M $335M $750M $750M CU Assets:CU Assets: <$10M<$10M <20M<20M <40M<40M <75M<75M <150M<150M <335M<335M <750M<750M PlusPlus

Yes, currently reviewingYes, currently reviewing

<.5%<.5% 2% 2% 9% 9% 4%4% 16% 16% 20%20% 24%24% 31%31%

Yes, planning to reviewYes, planning to review

16% 16% 14% 14% 24% 24% 21% 21% 19% 19% 18%18% 31%31% 16%16%

Executive Executive

CompensationCompensationReview of Compensation PlanReview of Compensation Plan

47

How many Federal credit How many Federal credit

unions have executives with unions have executives with

Nonqualified benefits plans?Nonqualified benefits plans?

48DefinitionsDefinitions Nonqualified Plan?Nonqualified Plan?

457(b) SERP457(b) SERP•• Section of the IRS CodeSection of the IRS Code

•• Government & taxGovernment & tax--exempt executives exempt executives

•• Defer income up to a maximum amountDefer income up to a maximum amount

•• Employee contributes in addition to qualified Employee contributes in addition to qualified

plans such as a 401(k)plans such as a 401(k)

457(f) SERP457(f) SERP•• For select execs of taxFor select execs of tax--exempt organizationsexempt organizations

•• No limits on contributionsNo limits on contributions

•• Both corporation and employee can contribute Both corporation and employee can contribute

49DefinitionsDefinitions Nonqualified Plan?Nonqualified Plan?

SplitSplit--dollar Insurancedollar Insurance•• Way of paying for Life InsuranceWay of paying for Life Insurance

•• Arranged between Employer and ExecutiveArranged between Employer and Executive

•• Split premium, cash values, policy Split premium, cash values, policy

ownership and death benefitsownership and death benefits

•• Cash value can be used as supplemental Cash value can be used as supplemental

retirement income and death benefit paid to retirement income and death benefit paid to

beneficiarybeneficiary

•• Upon death, employer receives total premiums Upon death, employer receives total premiums

paid and beneficiary receives the balancepaid and beneficiary receives the balance

Severance PlanSeverance Plan

50

24% 24%

41%

69%

82%

94%

8%

59%

<$10M $10M -

<$20M

$20M -

<$40M

$40M -

<$75M

$75M -

<$150M

$150M -

<$335M

$335M -

<$750M

$750M+

% of Federal CUs

By Asset SizeBy Asset Size

Federal Credit UnionsFederal Credit Unions Percent with Nonqualified Percent with Nonqualified

Plans (Plans (IncludingIncluding Severance) Severance)

51

17% 13%

27%

53%

78%

92%

48%

4%

<$10M $10M -

<$20M

$20M -

<$40M

$40M -

<$75M

$75M -

<$150M

$150M -

<$335M

$335M -

<$750M

$750M+

% of Federal CUs


Federal Credit UnionsFederal Credit Unions Percent with Nonqualified Percent with Nonqualified

Plans (Plans (ExcludingExcluding Severance) Severance)

52

17% 23% 24%16% 11%

18% 29%

62%82%

6%

30%

4% 6%

1%

4%

<$10M $10M -

<$20M

$20M -

<$40M

$40M -

<$75M

$75M -

<$150M

$150M -

<$335M

$335M -

<$750M

$750M+

% of Federal CUs

2+

One


Federal Credit UnionsFederal Credit Unions How Many Executives Have How Many Executives Have

NQ Plans? (NQ Plans? (Excl.Excl. Severance) Severance)

53Types of Nonqualified PlansTypes of Nonqualified PlansTop ExecutiveTop Executive

$10M$10M $20M$20M $40M$40M $75M$75M $150M $150M $335M $335M $750M $750M CU Assets:CU Assets: <$10M<$10M <20M<20M <40M<40M <75M<75M <150M<150M <335M<335M <750M<750M PlusPlus

SERP 457(b)SERP 457(b) 4% 4% 4%4% 8%8% 14% 14% 22%22% 27%27% 60%60% 54%54%

SERP 457(f)SERP 457(f) <.5%<.5% 7%7% <.5%<.5% 12% 12% 15%15% 27%27% 46%46% 32%32%

SplitSplit--DollarDollar <.5% <.5% <.5% <.5% 6%6% <.5% <.5% 12%12% 13%13% 22%22% 19%19%

SeveranceSeverance 8%8% 13% 13% 15% 15% 26% 26% 27%27% 44%44% 25%25% 32%32%

Have, but noneHave, but none

of the aboveof the above <.5% <.5% 6%6% 2%2% 1% 1% 5%5% <.5%<.5% 1% 1% 2%2%

Do not haveDo not have

NQ plansNQ plans 92% 92% 76%76% 76%76% 59%59% 41%41% 31%31% 18%18% 6%6%

Base: All Federal Credit UnionsBase: All Federal Credit Unions

54Nonqualified PlansNonqualified Plans Reviewing/Considering Them?Reviewing/Considering Them?

““Is your credit union reviewing your current Nonqualified benefitIs your credit union reviewing your current Nonqualified benefit

plans for executives or considering offering them in the future?plans for executives or considering offering them in the future?””

$10M $10M $20M$20M $40M$40M $75M $75M $150M $150M $335M $335M $750M $750M CU Assets:CU Assets: <$10M<$10M <20M<20M <40M<40M <75M<75M <150M<150M <335M<335M <750M<750M PlusPlus

Yes, reviewing existing NQ PlansYes, reviewing existing NQ Plans

<.5%<.5% 4%4% 6%6% 7%7% 8%8% 12%12% 19%19% 20%20%

Yes, considering offering NQ PlansYes, considering offering NQ Plans

5%5% 1%1% 13%13% 14%14% 16%16% 11%11% 11%11% 5%5%

55

Cars and Car Cars and Car

AllowanceAllowance

for for

Federal Credit Federal Credit

Union Top Union Top

ExecutivesExecutives

56Top ExecutiveTop Executive Car/ Car AllowanceCar/ Car Allowance

$10M $10M $20M$20M $40M$40M $75M $75M $150M $150M $335M $335M $750M $750M


CarCar * * 2%2% 2%2% 14% 14% 18% 18% 22%22% 25%25% 35%35%

AllowanceAllowance * * 2%2% 9% 9% 19% 19% 15% 15% 35%35% 36%36% 36%36%

BothBoth * * 2%2% ** 5%5% 8%8% 8%8% 10%10% 8%8%

NeitherNeither 99%+ 99%+ 94% 94% 89% 89% 62% 62% 59%59% 35%35% 29%29% 21%21%

* Less than .5%

57Car/Car AllowanceCar/Car Allowance

PercentilePercentile MonthlyMonthly YearlyYearly

9090thth $1,000$1,000 $12,000$12,000

7575thth $750$750 $9,000$9,000

6060thth $500$500 $6,000$6,000

5050thth $500$500 $6,000$6,000

4040thth $400$400 $4,800$4,800

2525thth $300$300 $3,600$3,600

1010thth $125$125 $1,500$1,500

Base: Those with a car or car allowance (n=91)Base: Those with a car or car allowance (n=91)

Top ExecutivesTop Executives

59

When looking at survey results . . .When looking at survey results . . .

•• Is the survey representative?Is the survey representative?

•• Is there an adequate sample size for subgroup Is there an adequate sample size for subgroup of interest?of interest?

•• Strong relationship between asset size and Strong relationship between asset size and compensationcompensation

•• When using two+ survey sources . . . When using two+ survey sources . . .

–– Make adjustment for differences in asset rangesMake adjustment for differences in asset ranges

–– Estimates should be similar, not the sameEstimates should be similar, not the same

•• SurveySurvey’’s intent is to give a sense of what other s intent is to give a sense of what other credit unions do credit unions do –– cannot make the decision re: cannot make the decision re: your specific situationyour specific situation

–– Other factors have to be accounted forOther factors have to be accounted for

In ConclusionIn Conclusion

60

•• Surveyed theSurveyed the top five top five executives executives

•• Additional information in written reportAdditional information in written report–– Executives #2 thru #5 Executives #2 thru #5

–– Estimate release inEstimate release in late Julylate July

•• Information specific to your credit Information specific to your credit union union –– similar asset size, etc. similar asset size, etc. –– is is valuablevaluable–– BurnsBurns--Fazzi, Brock (BFB) for 15Fazzi, Brock (BFB) for 15--15 Report15 Report–– Puts your credit union in the middle by Puts your credit union in the middle by looking at 15 CUs just above and 15 CUs looking at 15 CUs just above and 15 CUs just below your credit union based on asset just below your credit union based on asset size. size.

In ConclusionIn Conclusion

61BFB 15BFB 15--15 Report . . .15 Report . . .

Summary of Comparison Credit Unions

• Size - Assets, Loans/ Leases, Members, # of Employees

• Regions represented

• Qualified Plans for Employees

• Field of Membership

• Board Member Benefits

• Review of Exec Compen-sation & Nonqualified Benefits

62

Top Executive

• Base, Bonus Percent and Total Compensation

• Direct Responsibilities

• Fringe Benefits

• Nonqualified Plans

Example BFB Report . . .Example BFB Report . . .

63

Executives #2-5

• Same Information as Top Executive

• Provided For Each Executive

Example BFB Report . . .Example BFB Report . . .

64

PilarPilar PerottiPerottiAssoc. Director of MarketingAssoc. Director of Marketing

BurnsBurns--Fazzi, BrockFazzi, Brock

704 332704 332--2265 Ext. 2062265 Ext. 206

[email protected]@bfbbenefit.com

For More Information . . .For More Information . . .

David David FrankilFrankilPresidentPresident

NAFCU Services CorporationNAFCU Services Corporation

800 336800 336--4644 4644 •• 703 842703 842--22262226

[email protected]@nafcu.org

67

Thank YouThank You

Jack E. Clark, PhDJack E. Clark, PhD

4600 Lebanon Road 4600 Lebanon Road –– Suite ASuite A

Charlotte, NC 28227Charlotte, NC 28227

704704--998998--96619661

[email protected]@clarkandchase.com

2012 nafcu-bfb survey of federal credit union executive benefits and compensation (credit union...

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