Executive base pay grew 4.35% in 2010

COVINA, Calif. (1/27/11)--U.S. credit unions' executive base pay increased by 4.35% in 2010--only slightly higher than what was reported in 2009, and significantly lower than the increases seen in the earlier part of the decade.
However, there are signs of the recession lifting, with executives accepting bonuses they voluntarily gave up last year, said Executive Compensation Solutions (ECS) seventh annual Employees and Executive Compensation Benefits Survey for the Credit Union Movement.

ECS is a credit union compensation and benefits provider.

Two notable executive compensation trends since the inception of the survey in 2004 are the increase in the prevalence of pay plans and performance-linked long-term incentive plans, the survey said. The use of severance pay plans has grown to nearly 60% from roughly 20%. In a time of uncertainty, this requires more sophistication in plan design and greater protection for credit union executives, ECS said.

The use of performance-linked long-term incentive plans addresses a concern raised by credit union board members and senior management--how to ensure that all elements of executive compensation adhere to a stated compensation philosophy that results in the overall betterment of the credit union. ECS said it anticipates a continuation of many of the 2010 trends.

"Credit unions were not exempt from the uncertainties the economy presented in 2010," said Don Curristan, ESC principal. "The past 12 months have seen an increase in mergers, consolidations and National Credit Union Administration involvement that only heighten the importance of attracting and retaining the best executive talent needed to take credit unions to the next level.

"A comprehensive executive compensation and benefit philosophy is necessary to achieve this objective," he concluded.

The Credit Union National Association's (CUNA) most recent "CEO Total Compensation Survey" showed that in 2009 total compensation for credit union CEOs nationwide declined, with CEOs experiencing a median net income change of -5%.