BRENTWOOD, TENN., June 17, 2014 – The compensation packages for many bank boards are rising, according to Bank Director’s 2014 Compensation Survey, sponsored by consulting firm Meyer-Chatfield Compensation Advisors. Pay is shifting from per-meeting fees to annual retainers, and directors and executives continue to express a clear preference for cash over equity despite improved stock valuations across the industry.
The survey also finds more banks focused on the business of growing the bank, with many reporting that they hired loan officers in 2013.
More than 300 directors and senior executives of banks nationwide responded to the survey, which was conducted in March and April. Additional data on director pay was collected from 2014 proxy statements.
Key findings include:
Board pay is rising. Almost half of respondents report an increase in board pay within the last two years, and 40 percent expect director compensation to increase in 2015. However, 42 percent of respondents from banks with less than $500 million in assets say that their board hasn’t increased pay since 2010 or prior.
Benefits are rising too. More than half indicate that the board members of their bank receive some sort of benefit, an increase of almost 30 percent from 2013. Reimbursement of travel expenses, at 34 percent, is the most common benefit reported by participants.
Should bank boards have a mandatory retirement age? Respondents appear to be split on the issue, with the practice significantly less prevalent among financial institutions with less than $250 million in assets. The median retirement age at the banks that do require it of their board is 72.
Lending, compliance and risk executives were the focus of new hires and promotions in 2013. Loan officers, at 44 percent, were in strong demand at banks of all sizes, and an emphasis on top line growth drove almost 60 percent of all executive level hires.
Does culture and stability trump money when it comes to attracting new talent? Corporate culture, at 69 percent, and the stability of the company, at 53 percent, are cited as the top elements that make a bank attractive to potential hires. Just 13 percent cite the compensation program.
Full survey results are available online at BankDirector.com, and will be featured in the 3rd quarter 2014 issue of Bank Director magazine.
ABOUT BANK DIRECTOR
Since 1991, Bank Director has served as a leading information resource for the directors and officers of financial institutions. Through its quarterly Bank Director magazine, executive-level research, annual conferences, and its website, BankDirector.com, Bank Director reaches the leaders of the institutions that comprise America’s banking industry. Bank Director is headquartered in Brentwood, Tennessee.
ABOUT MEYER-CHATFIELD COMPENSATION ADVISORS
For more than 20 years, Meyer-Chatfield has been a trusted partner to America’s financial institutions — providing Compensation Advisory services and Bank Owned Life Insurance. Meyer-Chatfield teaches clients how to meet financial goals, manage benefit liabilities, and enhance shareholder value. As industry experts they deliver unique strategies and solutions.
Contact: Emily McCormick, director of research, (615) 777-8471, [email protected]