2013 NAFCU BFB Survey of Executive Compensation and Benefits (Presentation Slides)

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2013 NAFCU-BFB Survey of Executive Compensation and Benefits

Jack E. Clark

Clark & Chase Research Inc.

July 11, 2013

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NAFCU

NAFCU Services

Burns-Fazzi, Brock

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Using Salary Surveys • What a survey is ... and what it is not

• What makes a good survey

• Relationship between Asset Size and Compensation

• Using more than one survey source

2013 NAFCU-BFB Survey • How we did the survey

• Some Findings

– Top Executive Compensation

– Components Used in Bonus Plans

– Nonqualified Benefit Plans

– Cars and Car Allowances

Q & A

2013 NAFCU-BFB Survey Report

Using Salary Surveys

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Surveys are estimates of the larger population

(Federal Credit Unions)

• Otherwise – guessing or anecdotal

information

How good these estimates are is based on a

few things . . .

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Is the sample representative?

• Did population of interest have an equal

chance of being included?

• Random vs. subjective selection?

• Self-selection – Are those who participate

markedly different from those who don’t

participate?

True for most salary surveys

How sample selected – Methodology section

Sampling error is not based on the size of

the population of interest

Overall sample size is not the only concern

• When looking at results for a certain

group of FCUs (ex. asset group)

what matters is the number of survey

participants in that group.

Very small samples = very unreliable results

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Sample Size

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When Looking at Survey Data

0 50 100 150 200 250 300 350 400 450 500

Sample Size

Lo

w S

am

plin

g E

rro

r H

ig

h

All FCUs (4,271)

FCUs w/Assets <$10M (1,597)

FCUs w/Assets $40-75M (455)

FCUs w/Assets $750M+ (133)

Sampling error for very small samples is very high.

9

When Looking at Survey Data

Again . . . .

Surveys are estimates of

the larger population

<$10M $46,247 $47,162 $48,077

$10M – <20M $68,357 $69,669 $70,981

$20M – <40M $78,912 $80,491 $82,070

$40M – <75M $110,425 $113,220 $116,016

$75M – <150M $136,771 $140,173 $143,574

$150M – <335M $192,030 $197,740 $203,449

$335M – <750M $270,115 $281,668 $293,220

$750M+ $472,805 $502,690 $532,574

*Weighted by total assets, # of employees, region and NAFCU membership

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Lower Limit Average Upper Limit

All FCUs* $100,711 $103,722 $106,733

2013 NAFCU-BFB Survey 95% Confidence Intervals

Top Executive Total Compensation

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Total Assets

# of Employees

# of Members

Total Loans/Leases

Years as Exec

Education

U.S. Region

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How valuable is it to compare compensation

by region?

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Federal Credit Unions Asset Size Varies by Region

Region: NE SE Mid W

Total Assets 100% 100% 100% 100%

<$10M 42% 37% 39% 25%

$10M – <20M 15% 14% 16% 14%

$20M – <40M 14% 14% 15% 15%

$40M – <75M 10% 10% 10% 13%

$75M – <150M 8% 8% 9% 13%

$150M – <335M 6% 8% 5% 8%

$335M – <750M 3% 4% 4% 6%

$750M+ 3% 4% 2% 5%

FCU Median $16M $18M $18M $35M

* April 12, 2013 Query of December, 2012 NCUA 5300 Call Reports

12% 16% 11% 19%

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• Most of the time - Results broken down by asset size is more useful

• However, when looking at overall results –adjustment needed for asset groups over-or-under represented

• Weighting procedure

• Otherwise – Overstated figures

– One group unfairly influencing the results

Overall Survey Results

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• Average and median are different

• At times, their value may be similar . . . but sometimes very different.

Average vs Median

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Number Average Median

of FCUs (Million) (Million)

All FCUs* 4,271 $130 $18

<$10M 1,597 4 3

$10M – <20M 642 14 14

$20M – <40M 621 29 28

$40M – <75M 455 55 55

$75M – <150M 385 106 102

$150M – <335M 271 221 214

$335M – <750M 167 481 446

$750M+ 133 2,384 1,280

*Query of December, 2012 NCUA 5300 Call Reports

Average vs. Median

Total Assets

If both surveys are good sources can add strength to your position.

But comparison can be difficult . . . .

• Each likely uses different asset ranges – Example: CU with $225M in Assets

• 1st survey includes in $200M-$350M range

• 2nd survey includes in $100M-$250M range

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

• Beware of changing Bases (example – Bonus Info: based on all CUs or only those w/ bonus?)

• As estimates, figures may be reasonably similar but not the same

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Comparing Two+ Surveys

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Keeping Your Perspective

Our goal is to give you a good sense of what

other Federal credit unions do, as a group,

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

Every situation is unique and other factors

affect your executive compensation plan

21

How

NAFCU-

BFB

Survey

was done

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• All Federal Credit Unions are invited

• 425 Credit Unions

– 215 NAFCU Members/ 210 Non-members

• Completed Survey 2/25 to 3/26

• 1,223 Executives

• 425 Top Executives

• 311 #2 Executives




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2013 NAFCU-BFB Survey

Population vs. Sample by U.S. Region

FCUs* Survey

N= 4,271 425

Northeast 33% 26%

Southeast 19% 21%

Midwest 32% 31%

West 16% 22%


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Federal CUs*

*NCUA Sample

4,271 425

<$10M 37% 13%

$10M – <20M 15% 15%

$20M – <40M 15% 16%

$40M – <75M 11% 14%

$75M – <150M 9% 14%

$150M – <335M 6% 10%

$335M – <750M 4% 9%

$750M+ 3% 9%

2013 NAFCU-BFB Survey

Population vs. Sample by Asset Size


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In addition,

Data is weighted based on

– Total Assets*

– Number of Employees*

– Region*

– NAFCU Membership

Result: Sample represents

Federal Credit Unions

*Source: 4/12/13 Query of December, 2012 NCUA 5300 Call Reports

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Definitions What is a Percentile?

Lowest Highest

Value Value 25th

Percentile

50th

Percentile

(Median)

75th

Percentile

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Selected

Findings

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2013

Potential Total

Compensation

(Base & Bonus)

for

Top Executive

Potential Bonus Comparison Credit Unions . . .

Percentile

2013 Total

Compensation

(Base & Bonus)

2013

Base Salary

% of

Base

$ Dollar

Amount

Total

Assets

(M)

Loans/

Leases

(M)

Number of:

Members Employees Branches

10th $98,322 $98,322 0% $0 $76 $35 7,876 19 1

25th $118,450 $110,000 0% $0 $82 $43 9,638 26 2

40th $130,000 $123,048 0% $0 $90 $50 10,272 33 3

50th $135,000 $130,000 0% $0 $104 $56 11,248 38 3

60th $140,888 $135,400 4% $5,500 $112 $61 11,842 41 4

75th $154,000 $141,933 10% $14,000 $121 $79 13,608 46 4

90th $186,840 $173,000 20% $26,885 $123 $97 15,718 55 5

Results based on surveying 58 top executives at credit unions in this asset group

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Top Executive Example Report Table

Federal Credit Unions with Total Assets of $75 Million to Less Than $150 Million


Percentile

2013 Total

Compensation

(Base & Bonus)

2013

Base Salary

% of

Base

$ Dollar

Amount

Total

Assets

(M)

Loans/

Leases

(M)

Number of:


10th $22,500 $22,500 0% $0 $2 $1 438 2 0

25th $33,500 $31,200 0% $0 $3 $1 676 2 1

40th $45,000 $45,000 0% $0 $5 $2 865 2 1

50th $49,000 $48,500 0% $0 $5 $2 1,002 3 1

60th $51,940 $51,023 0% $0 $6 $3 1,233 3 1

75th $56,700 $57,148 0% $0 $8 $4 1,433 4 1

90th $70,085 $70,085 4% $1,950 $9 $4 1,961 5 1


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Top Executive 2013 Compensation

Federal Credit Unions with Total Assets of Less Than $10 Million


Percentile

2013 Total

Compensation

(Base & Bonus)

2013

Base Salary

% of

Base

$ Dollar

Amount

Total

Assets

(M)

Loans/

Leases

(M)

Number of:


10th $51,327 $51,376 0% $0 $11 $4 1,433 3 0

25th $58,000 $58,000 0% $0 $13 $5 1,602 4 1

40th $63,305 $65,000 0% $0 $14 $6 1,848 4 1

50th $67,931 $67,500 0% $0 $16 $7 1,926 5 1

60th $70,000 $70,000 0% $0 $16 $8 2,025 6 1

75th $79,040 $80,400 0% $0 $18 $9 2,432 6 1

90th $95,282 $90,745 5% $4,537 $19 $11 3,242 10 2


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Percentile

2013 Total

Compensation

(Base & Bonus)

2013

Base Salary

% of

Base

$ Dollar

Amount

Total

Assets

(M)

Loans/

Leases

(M)

Number of:


10th $60,000 $61,000 0% $0 $22 $7 2,077 4 1

25th $70,000 $70,000 0% $0 $24 $10 2,899 7 1

40th $75,750 $75,764 0% $0 $27 $12 3,364 8 1

50th $79,920 $80,000 0% $0 $29 $14 3,808 9 1

60th $83,341 $83,341 0% $0 $31 $15 4,106 10 1

75th $91,670 $88,400 1% $750 $34 $16 4,991 12 2

90th $104,344 $102,000 10% $7,800 $37 $21 5,777 16 3


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Potential Bonus Comparison Credit Unions . . . .

Percentile

2013 Potential Total Compensation

(Base + Bonus)

2013 Base

Salary % of Base

$ Dollar Amount

Total Assets

(M)

Loans/ Leases

(M) Number of Members Employees Branches

10th $80,000 $78,880 0% $0 $44 $17 3,405 8 1

25th $95,014 $92,000 0% $0 $46 $20 4,758 12 1

40th $110,000 $105,000 0% $0 $53 $24 5,239 14 2

50th $113,136 $110,000 0% $0 $57 $26 6,137 17 2

60th $115,504 $115,000 4% $4,500 $59 $30 6,599 18 3

75th $123,616 $115,515 5% $5,350 $61 $33 8,480 23 3

90th $145,000 $145,000 20% $19,600 $68 $42 10,162 28 4


Percentile

2013 Total

Compensation

(Base & Bonus)

2013

Base Salary

% of

Base

$ Dollar

Amount

Total

Assets

(M)

Loans/

Leases

(M)

Number of:


10th $98,322 $98,322 0% $0 $76 $35 7,876 19 1

25th $118,450 $110,000 0% $0 $82 $43 9,638 26 2

40th $130,000 $123,048 0% $0 $90 $50 10,272 33 3

50th $135,000 $130,000 0% $0 $104 $56 11,248 38 3

60th $140,888 $135,400 4% $5,500 $112 $61 11,842 41 4

75th $154,000 $141,933 10% $14,000 $121 $79 13,608 46 4

90th $186,840 $173,000 20% $26,885 $123 $97 15,718 55 5


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Top Executive Example Report Table



Percentile

2013 Total

Compensation

(Base & Bonus)

2013

Base Salary

% of

Base

$ Dollar

Amount

Total

Assets

(M)

Loans/

Leases

(M)

Number of:


10th $127,500 $115,000 0% $0 $162 $70 12,466 30 3

25th $177,708 $153,400 0% $0 $189 $97 15,939 45 4

40th $188,000 $169,502 2% $2,500 $199 $110 20,260 64 5

50th $192,000 $186,500 7% $11,500 $225 $119 21,990 65 6

60th $200,000 $188,000 10% $16,200 $232 $135 23,944 70 7

75th $234,240 $205,000 15% $25,425 $258 $163 29,791 92 8

90th $246,738 $236,000 20% $38,950 $322 $182 38,814 112 9


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Potential Bonus Comparison Credit Unions . . . .

Total Loans/

% of $ Dollar Assets Leases Number of

Percentile

2013 Potential Total Compensation

(Base + Bonus)

2013 Base

Salary Base Amount (M) (M) Members Employees Branches

10th $190,000 $190,000 0% $0 $366 $167 22,921 78 5

25th $225,000 $195,000 0% $0 $410 $230 39,798 115 6

40th $254,925 $240,000 4% $6,920 $430 $278 43,844 137 8

50th $275,000 $257,000 8% $16,500 $457 $291 46,613 156 10

60th $301,620 $264,000 10% $27,420 $478 $318 52,528 171 11

75th $324,000 $282,460 20% $52,000 $569 $357 57,385 187 15

90th $390,000 $312,000 30% $84,000 $640 $463 74,907 233 18


Percentile

2013 Total

Compensation

(Base & Bonus)

2013

Base Salary

% of

Base

$ Dollar

Amount

Total

Assets

(M)

Loans/

Leases

(M)

Number of:


10th $323,150 $273,457 0% $0 $841 $369 51,104 138 6

25th $381,770 $310,382 10% $33,000 $916 $498 69,254 186 10

40th $400,000 $368,000 20% $55,500 $1,010 $603 85,086 227 12

50th $442,806 $387,579 20% $67,176 $1,220 $634 98,050 270 15

60th $480,000 $421,720 30% $90,000 $1,363 $686 116,383 330 16

75th $613,288 $470,000 30% $136,675 $1,844 $1,214 161,965 393 19

90th $780,000 $600,000 45% $213,168 $3,368 $2,201 267,446 832 37


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Federal Credit Unions with Total Assets of $750 Million or More

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2013

Bonus Plans

for Top Executive

43

All FCUs 32%

<$10M 21%

$10M – <20M 20%

$20M – <40M 25%

$40M – <75M 47%

$75M – <150M 44%

$150M – <335M 60%

$335M – <750M 62%

$750M+ 84%

2013 Bonus Plans Top Executive

“For 2013, does the top executive have a

bonus, incentive or variable pay plan in place?”

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“Which components are used to determine this

bonus/ incentive/ variable pay plan for the top executive?”

Loan Growth . . . . . . . . . . . . 52% Net Worth . . . . . . . . . . . . . . . 22%

Return on Assets (ROA) . . . 45% Asset Growth . . . . . . . . . . . . 20%

Membership Growth . . . . . . 42% Savings/Checking Growth . . 20%

Net Income Growth . . . . . . . 34% Expense Ratios . . . . . . . . . . 19%

Delinquency Measures . . . . 32% Membership Satisfaction . . . 16%

Strategic Initiatives . . . . . . . 23% Products/Svcs per Member . 14%

Discretionary Board Eval. . . 23% Employee Satisfaction . . . . . 10%

Other components not listed but mentioned by 1% or more: Compliance

(4%), Balanced Scorecard (4%), Net Interest Margin (1%), Leadership

(1%), Loans-to-shares Ratio (1%)

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Executives w/Formal Bonus Structure:

Components used to determine bonus/ incentive/ variable pay plan

All Execs $40M-

w/Plan <$335M $335M+

Loan Growth 52% 62% 58%

Return on Assets (ROA) 45% 57% 58%

Membership Growth 42% 36% 60%

Net Income Growth 34% 30% 25%

Delinquency Measures 32% 48% 39%

Strategic Initiatives 23% 34% 27%

Discretionary Board Eval. 23% 29% 25%

Net Worth 22% 27% 30%

Asset Growth 20% 22% 22%

Savings/Checking Growth 20% 22% 15%

Expense Ratios 19% 29% 25%

Membership Satisfaction 16% 17% 40%

Products/Svcs per Member 14% 20% 17%

Employee Satisfaction 10% 11% 19%

Note: Credit Unions w/ assets under $40 million are not shown – insufficient sample size

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Most Frequently Used Components

For Those with Component in Plan . . .

Percent of Bonus Plan Determined by Component 25th 75th

Median Percentile Percentile

Loan Growth 20% 10% 25%

Return on Assets (ROA) 20% 10% 25%

Membership Growth 15% 10% 25%

Net Income Growth 40% 20% 100%

Delinquency Measures 15% 10% 20%

Strategic Initiatives 20% 10% 40%

Discretionary Board Eval. 20% 20% 30%

Net Worth 15% 10% 25%

Among the more frequently used bonus plan components,

Net Income Growth tends to have more weight than other components.

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How many Federal credit unions

have executives with Nonqualified

benefits plans?

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Definitions Nonqualified Plan?

457(b) SERP • Section of the IRS Code

• Government & tax-exempt executives

• Defer income up to a maximum amount

• Employee contributes in addition to qualified plans

such as a 401(k)

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

• No limits on contributions

• Both corporation and employee can contribute

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Definitions Nonqualified Plan?

Split-dollar Insurance • Way of paying for Life Insurance

• Arranged between Employer and Executive

• Split premium, cash values, policy ownership

and death benefits

• Cash value can be used as supplemental

retirement income and death benefit paid to

beneficiary

• Upon death, employer receives total premiums

paid and beneficiary receives the balance

Severance Plan

50

6%

12%

41%

54%

78%

90%

7%

58%

<$10M $10M -

<$20M

$20M -

<$40M

$40M -

<$75M

$75M -

<$150M

$150M -

<$335M

$335M -

<$750M

$750M+

% o

f F

ed

era

l C

Us

By Asset Size

Federal Credit Unions Percent with Nonqualified

Plans (Including Severance)

51

6% 7%

35%

43%

71%

77%

51%

7%

<$10M $10M -

<$20M

$20M -

<$40M

$40M -

<$75M

$75M -

<$150M

$150M -

<$335M

$335M -

<$750M

$750M+

% o

f F

ed

era

l C

Us

By Asset Size

Federal Credit Unions Percent with Nonqualified

Plans (Excluding Severance)

52

7% 6% 5%

22%34%

22%13% 11%

66%57%

21%

17%

13%

<.5% <.5% 2%

<$10M $10M -

<$20M

$20M -

<$40M

$40M -

<$75M

$75M -

<$150M

$150M -

<$335M

$335M -

<$750M

$750M+

% o

f F

ed

era

l C

Us

2+

One

By Asset Size

Federal Credit Unions How Many Executives Have

NQ Plans? (Excl. Severance)

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Types of Nonqualified Plans Top Executive

$10M $20M $40M $75M $150M $335M $750M FCU Assets: <$10M <20M <40M <75M <150M <335M <750M Plus

SERP 457(b) 4% 5% 1% 19% 23% 25% 47% 46%

SERP 457(f) <.5% 2% 3% 9% 16% 18% 30% 45%

Split-Dollar <.5% 1% 2% 7% 16% 6% 15% 18%

Severance 3% 2% 9% 17% 23% 31% 43% 39%

Have, but none

of the above 2% - 1% 2% - - - -

Not have NQ

plans/ Not

eligible 93% 94% 88% 59% 42% 46% 25% 13%

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Nonqualified Plans Reviewing/Considering Them?

“Is your credit union reviewing your current Nonqualified benefit

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

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

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

Yes, reviewing existing NQ Plans

2% 3% 6% 7% 9% 10% 20% 34%

Yes, considering offering NQ Plans

4% 6% 11% 13% 19% 19% 21% 10%

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Cars and Car

Allowance

for

Federal Credit

Union Top

Executives

56

Top Executive Car/ Car Allowance

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

Yes, receive company car/car allowance 4% 11% 16% 30% 39% 50% 70% 69% **Pay for/ Reimburse for:

Purchase/Lease * 4% 1% 17% 18% 22% 34% 32%

Gas & Maintenance * 5% 1% 15% 16% 21% 36% 23%

Vehicle Insurance * 4% 1% 14% 18% 21% 29% 27%

All 3 - Purchase/lease,

gas/maint., & insurance * 4% * 12% 16% 17% 23% 21%

Flat Monthly Fee 2% 5% 12% 9% 21% 25% 36% 37%

Mileage 4% 3% 2% 4% 1% 5% * 3%

No Car/ Car Allowance 96% 89% 84% 70% 61% 50% 30% 31%

* Less than .5%

** Multiple responses allowed

57

Car/Car Allowance

Percentile Monthly Yearly

90th

$1,000 $12,000

75th

$700 $8,400

60th

$560 $6,720

50th

$500 $6,000

40th

$350 $4,200

25th

$250 $3,000

10th

$100 $1,200

Base: Those with a car or car allowance (n=141)

Top Executives

58 Fringe Benefits Provided @ No Cost

Top Exec All All

Total Only Execs Employees

Electronic Devices 34% 14% 19% 1%

Wireless/Cell Phone 33% 10% 23% *

Education 26% 1% 2% 23%

Preferred Loan Rates 19% 1% 1% 17%

Spouse Travel 13% 5% 6% 1%

Reserved Parking 13% 5% 4% 4%

Financial Counseling 12% * 1% 12%

Physical Exam 9% 2% 1% 6%

Personal Liability Insurance 7% 1% 3% 3%

Long-term Care 7% * 2% 4%

Executive Coaching 6% 2% 4% na

Health/Fitness Club 4% 1% * 3%

Legal Counseling 4% * 1% 3%

1st Class Air Travel 3% 1% 1% 1%

Estate Planning 3% * 1% 2%

Country Club 3% 2% 1% na

Mortgage Assistance 3% 1% * 2%

Income Tax Preparation * * * *

* Less than .5%

59 Top Executive

Fringe Benefits Provided @ No Cost


Electronic Devices 16% 23% 31% 39% 59% 78% 81% 79%

Wireless Phone 2% 26% 37% 53% 74% 75% 81% 84%

Education 11% 25% 22% 24% 60% 42% 62% 66%

Preferred Loans 12% 10% 22% 27% 26% 33% 38% 45%

Reserved Parking 8% 13% 14% 17% 5% 14% 42% 36%

Spouse Travel 1% 14% 11% 25% 20% 28% 34% 45%

Finance Counsel 6% 11% 7% 11% 19% 26% 37% 36%

Physical Exam 2% 5% 6% 18% 12% 28% 27% 29%

Exec Coaching 2% 10% 1% 11% 17% 12% 20% 23%

Slide 1 of 2

60 Top Executive

Fringe Benefits Provided @ No Cost


Long-term Care * 11% 6% 11% 6% 22% 14% 9%

Pers Liability Ins 4% 5% 6% 9% 5% 19% 22% 15%

Health/Fitness Club * * 2% 3% 19% 11% 14% 18%

Legal Counseling 2% 1% * 6% 16% 5% 12% 3%

1st Class Air Travel 3% 2% 1% 4% 2% 3% 7% 24%

Country Club * * 3% 8% 1% 5% 19% 23%

Mortgage Assist * * * 6% 11% 5% 11% 13%

Estate Planning * 4% 3% 7% 6% 4% 6% 8%

Income Tax Prep * * * * 2% * * 3%

* Less than .5%

Slide 1 of 2

61

Benefits Provided to

Board of Directors

60%

55%

47%

26%

17%

5%

4%

2%

27%

1%

Travel Expenses

Conference Expenses

Meeting Expenses

Educational Expenses

Travel Expenses for Spouse

Life Insurance

Emeritus Board Status

Disability Insurance

Medical/Wellness

None

62

Board Members Benefits/Expenses Covered

63

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

Travel Expenses 35% 56% 70% 80% 86% 87% 95% 84%

Conference Exp 35% 51% 59% 74% 70% 88% 87% 84%

Meeting Expenses 34% 43% 51% 53% 62% 73% 74% 49%

Educational Exp 17% 34% 25% 32% 38% 26% 32% 34%

Spouse/Partner Travel 2% 17% 8% 35% 28% 37% 50% 68%

Life Insurance 2% 7% 9% 5% 3% 6% 10% 8%

Emeritus Status * * 3% 11% 8% 12% 17% 23%

Disability Insurance * * 2% 6% 1% * 2% 8%

Medical/Wellness * * 1% * 1% 4% 7% 13%

None 47% 27% 23% 7% 11% 4% 2% 6%

Board Members Benefits/Expenses Covered

* Less than .5%

64

When looking at survey results . . .

• Is the survey representative?

• An adequate sample size for your asset group?

• Strong relationship between asset size and compensation

• When using two+ survey sources . . .

– Make adjustment for differences in asset ranges

– Estimates should be similar, not the same

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

– Other factors

In Conclusion

65

• Surveyed the top five executives

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

– Reviewing overall Executive Compensation Plans?

– Paid Time Off – Top Executive

– Health & Welfare Benefits Provided at No-cost

– Qualified Plans – 401(k), Defined Benefit, etc.

– Demographic - years as exec, age, gender, education

In Conclusion

66

BFB 15-15 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

Asset Size:

Summary of Comparison Credit Unions

# Surveyed: 30

Size of Comparison Credit Unions (See Note Below)

Percentile

Total Assets

(in Millions)

Total

Loans/Leases

(in Millions)

Current Members Number of

Branches

Employees

(Full &

Part Time)

90th $681.2 $445.4 76,636 19 270

75th $609.0 $396.3 66,277 16 204

60th $575.0 $336.0 58,115 12 182

Median - 50th $545.5 $322.5 54,836 11 176

40th $485.6 $291.4 52,067 9 167

25th $459.0 $248.5 44,735 6 141

10th $428.7 $202.9 38,730 6 126

Qualified Plans for All Employees

Percent of comparison credit unions with plan:

Exec Compensation Defined Profit

a) Currently Reviewing 401(k) Benefit Sharing

100% 23% 30%

20%5.60 =Average 401(k) Match - % of Total Compensation

b) Plan to Review Field of Membership

Single SEG Multi SEG Community

23% 13% 30% 57%

Benefits Provided to Board Members

Nonqualified Benefits Conference Expense Meeting Expense Travel Expense

a) Reviewing 83% 60% 87%

Existing Plans Medical/Wellness Disability Ins Life Insurance

13% 3% 13%

27% None Provided

0%

b) Considering to Offer U.S. Regions Represented

Northeast Southeast Mid

13% 13% 17% 37%

40%

0%

Purchase Plan

Association

0%

Education Expense

Money

ABC Credit Union

Review of Plans

$537 Million

Anywhere, USA

Source - 2012 NAFCU-BFB Survey of Federal Credit Union Executive Benefits & Compensation

Conducted by Clark & Chase Research, Inc.

Long Term Care

3%

Percentile - is the percentage who are less than or equal to that figure. For example, if total compensation is $90,000 at the

25th percentile, then 25% of the executives’ total compensation are at or below $90,000.

West

Note - Each variable shown by percentiles is independently calculated . The above results do not mean that any specific

credit union with total assets at a certain percentile will have a loans/lease, membership or employees at the same

percentile.

AK, CA(3), CO, FL, HI, IN(2), MA, MD, MI, MN, NC, NE(2), NM(2), NV, NY, OK, PA, SC, TN(2), TX(4), UT

33%

States represented (number in brackets for states with 2+ credit unions):

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Top Executive

• Base, Bonus

Percent and Total

Compensation

• Direct

Responsibilities

• Fringe Benefits

• Nonqualified Plans

Example BFB Report . . . Asset Size:

Top Executive

# Surveyed: 30

Responsibilities and Compensation (See Note Below)

Percentile

Direct

Responsibility -

Number of

Functions 2012 Base 2012 Bonus %

2012 Total Salary

(Base & Potential

Bonus)

90th 2.1 $287,182 30.5 $355,875

75th 1.0 $269,206 19.2 $298,404

60th 1.0 $250,800 12.6 $291,423

Median - 50th 1.0 $242,250 10.1 $279,685

40th 1.0 $234,400 10.0 $265,800

25th 1.0 $215,573 4.3 $233,532

10th 1.0 $199,493 0.0 $213,576

Percent Who Have Direct Responsibility for Function

Exec Mgmt Operations Branch Mgmt Lending

97% 3% 3% 3%

HR IS/IT Audit Compliance

7% 3% 7% 0%

Member Svcs Collections Marketing Finance3% 3% 7% 0%

Percent Who Have Fringe Benefit

Phys Exam Car/Car Allowance Average/Month Financial Counsel

7% 67% $661 3%

Income Tax Prep 1st Class Travel Country Club Estate Planning

0% 3% 17% 0%

Pers Liability Ins Spouse Travel Reserve Parking Cell Phone

0% 43% 17% 77%

Legal Counsel Low Intrst Loans Education Long Term Care

0% 10% 17% 10%

Nonqualified Benefits - Percent with Benefit

SERP 457(b) SERP 457(f) Split Dollar Severance

43% 47% 7% 30%

ABC Credit Union

$537 Million

Anywhere, USA

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

Percentile - is the percentage who are less than or equal to that figure. For example, if total compensation is $90,000

at the 25th percentile, then 25% of the executives’ total compensation are at or below $90,000.

Note - Each variable shown by percentiles is independently calculated . The above results do not mean, for example,

that a person with a base salary at the 75th percentile has a bonus or total compensation at the same percentile.


68

Executives #2-5

• Same Information

as Top Executive

• Provided For Each

Executive

Example BFB Report . . . Asset Size:

#2 Executive

# Surveyed: 29

Responsibilities and Compensation (See Note Below)

Percentile

Direct

Responsibility -

Number of

Functions 2012 Base 2012 Bonus %

2012 Total Salary

(Base & Potential

Bonus)

90th 5.2 $176,800 16.0 $201,760

75th 4.0 $170,976 12.5 $183,598

60th 3.0 $153,946 10.0 $171,626

Median - 50th 3.0 $149,339 10.0 $159,000

40th 2.0 $142,585 6.0 $149,724

25th 2.0 $137,514 4.0 $145,600

10th 1.0 $113,640 0.0 $128,216

Percent Who Have Direct Responsibility for Function

Exec Mgmt Operations Branch Mgmt Lending

17% 45% 24% 21%

HR IS/IT Audit Compliance

21% 28% 7% 28%

Member Svcs Collections Marketing Finance24% 17% 14% 45%

Percent Who Have Fringe Benefit

Phys Exam Car/Car Allowance Average/Month Financial Counsel

0% 17% $486 3%

Income Tax Prep 1st Class Travel Country Club Estate Planning

0% 0% 3% 0%

Pers Liability Ins Spouse Travel Reserve Parking Cell Phone

0% 17% 14% 76%

Legal Counsel Low Intrst Loans Education Long Term Care

0% 10% 17% 7%

Nonqualified Benefits - Percent with Benefit

SERP 457(b) SERP 457(f) Split Dollar Severance

34% 28% 7% 7%

Anywhere, USA

ABC Credit Union

$537 Million

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

Percentile - is the percentage who are less than or equal to that figure. For example, if total compensation is $90,000

at the 25th percentile, then 25% of the executives’ total compensation are at or below $90,000.

Note - Each variable shown by percentiles is independently calculated . The above results do not mean, for example,

that a person with a base salary at the 75th percentile has a bonus or total compensation at the same percentile.


69

Tyler Quigley

National Director of Marketing

Burns-Fazzi, Brock

888 494-8911 Ext. 206

[email protected]

For More Information . . .

David Frankil

President

NAFCU Services Corporation

800 336-4644 • 703 842-2226

[email protected]

70

Thank You

Jack E. Clark, PhD

704-998-9661

[email protected]

Economy & Finance

2013 NAFCU BFB Survey of Executive Compensation and Benefits (Presentation Slides)