Federal Banking Agencies Offer Proposal to Reform Financial Institution Incentive Pay

Acting on a Dodd-Frank mandate, federal bank regulators have released proposed guidance establishing general requirements for the incentive compensation arrangements of a variety of covered financial institutions. The proposal implements Section 956 of Dodd-Frank, which requires the agencies to prohibit incentive pay arrangements that encourage inappropriate risks by providing excessive compensation or that could lead to a material loss. The application of Section 956 is limited to financial institutions with a $1 billion or more in assets, defining “financial institution” broadly to include all depository institutions, credit unions, broker-dealers, investment advisors, GSEs like Fannie Mae and Freddie Mac and the Federal Home Loan Banks. The rules cover all programs that offer “variable compensation that serves as an incentive for performance” and extends to all officers, employees, directors or 10 percent shareholders that participate in such programs. The proposal will be open for a 45-day comment period after publication in the Federal Register with a final rule expected to be in place by 2012.

Enhanced Reporting of Incentive Pay

The proposed regulation mandates enhanced reporting of incentive compensation arrangements to provide the agencies with a basis for determining whether an institution’s pay practices violate the prohibitions on excessive compensation or encourage inappropriate risk that could lead to a material loss. All covered financial institutions would be required to submit an annual report describing the structure of their incentive pay arrangements in a clear narrative format along with a discussion of the institution’s policies and procedures relating to the governance of incentive pay programs. However, for institutions with less than $50 billion in assets, the regulation does not require reporting of an individual executive’s actual compensation. Institutions with assets of $50 billion or more (large covered institutions) would be required to provide additional specific information on policies and procedures applicable to the determination of incentive compensation for executive officers (see below) and certain other employees identified by the board of directors as having the ability to expose the institution to losses that are substantial in relation to the institution’s size, capital or overall risk tolerance. Large covered institutions would also be required to report on material changes in their incentive pay program since the prior year’s report and to detail the specific reasons why the institution’s incentive pay practices do not provide excessive compensation or encourage inappropriate risk that could lead to a material loss.  

Prohibited Practices

The proposed rules identify two classes of prohibited incentive pay practices: (i) programs that encourage unnecessary risk by providing excessive compensation and (ii) programs that encourage inappropriate risks leading to material financial loss.

Excessive Compensation . The agencies define “excessive compensation” as amounts paid to a covered individual that are unreasonable or disproportionate to the services performed, taking into account a variety of factors, including (i) the individual’s total compensation (both cash and non-cash), (ii) the individual’s compensation history, (iii) the institution’s financial condition, (iv) peer group practices, and (iv) the individual’s connection to any fraudulent act or omission.

Material Financial Loss . The proposed rules ban incentive pay arrangements that encourage either covered individuals or groups of covered individuals to take inappropriate risks that could lead to a material financial loss. The guidance does not identify specific arrangements that fit within this category but makes reference to the three principles identified in the agencies’ prior Guidance on Sound Incentive Compensation Policies released in June 2010: (i) balance of risk and financial reward through the use of deferrals, risk adjusted awards and reduced sensitivity to short-term performance, (ii) compatibility with effective controls and risk management and (iii) support by strong corporate governance, particularly at the board or board committee level.

Deferral Requirements for Large Covered Institutions

For large covered institutions, the proposal requires that at least 50 percent of annual incentive compensation for “executive officers” be deferred for at least three years. The proposal defines “executive officer” fairly narrowly to include only persons holding the title (or function) of the president, chief executive officer, executive chairman, chief operation officer, chief financial officer, chief risk officer or the head of a major business unit. Deferred amounts are also subject to adjustment for actual losses or by reference to other aspects of performance that are realized or become known over the deferral period. The rules allow the deferred amounts to cliff vest, i.e., no vesting or payment prior to three years, or on a graded schedule, i.e., one-third vesting and paid each year of the deferral period.

High Risk Employees

The agencies are also requiring the board or a board committee at large covered institutions to identify persons other than executive officers who have the ability to expose the institution to losses that are substantial in relation to the institution’s size. For such persons, any incentive arrangement is subject to documented approval by the board or a board committee and the board or committee must make a specific determination that the arrangement (i) effectively balances the financial rewards to the employee and the range and time horizon of the risks associated with the employee’s activities, (ii) includes appropriate methods for ensuring risk sensitivity such as deferral, (iii) provides for risk adjustment of awards and (iv) is structured to reduce sensitivity to short-term performance.

New Governance Requirements for Incentive Pay

The proposal also mandates specific governance requirements for the implementation and operation of incentive pay arrangements. All covered institutions are required to adopt board-approved policies and procedures that are designed to ensure continuing oversight of compliance efforts. Specifically, the rules require (i) the inclusion of the institution’s risk management personnel in the incentive pay design process, (ii) ongoing monitoring of incentive pay awards and required risk-based adjustments, and (iii) the regular flow to the Board of critical data and analysis from management and other sources to allow the Board to assess the consistency of incentive pay programs with regulatory requirements.

For covered institutions, regardless of size, we recommend an immediate assessment of how the proposed rules will impact your existing incentive arrangements and a review of related corporate governance practices. The early identification of covered officers and an analysis of the viability of current incentive pay programs under the new rules will help ease the transition to a compliant structure.


Five Questions the Compensation Committees Should Consider when Evaluating the CEO

When it comes to determining what your CEO is worth, the compensation committee must balance the need to attract, reward and retain top executive talent with the shareholders concern that performance is in alignment with pay.

The latest round of regulations will start to mandate that bank boards understand the pay-performance relationships, whether they exist and whether they motivate risk taking. As banking regulators begin to demand further risk analysis or modeling to better meet these needs, Susan O’Donnell, managing partner for Pearl Meyers & Partners suggests compensation committees consider conducting five types of additional scenario analysis or modeling.

  1. Do you know the full range of potential compensation that might result from your programs in aggregate and under different performance scenarios? For example:
    • What is potential upside/downside if both short and long-term incentive plans paid out at threshold and max performance?
    • What is total realized value of compensation received including stock value under different stock price assumptions over the next several years?
    • The totals should be understood by the compensation committee and the recipients. It is different than what is disclosed in the proxy which only shows grant value (which may be worthless in the long run if performance of stock/goals is not achieved).
  2. Do you know how compensation might change under different risk scenarios? (e.g. impact of interest rates, economy, customer retention, etc.)
  3. Can you show a link between pay and performance? Relative to the annual decisions you make, but more importantly the long-term accumulation/rewards and alignment.
  4. Do you know what retention hooks you have on your high performing executives? How much unvested, in the money value they would leave on the table if they left? 
  5. Do you know how much equity/ownership your executives have? Is it sufficient to ensure their alignment with shareholders? Do they hold and retain stock over the long-term?

Compensation committees will need to be ready to answer these questions in the coming months. It’s how you can communicate a CEO’s worth, ensure a proper relationship between pay-performance, increase the likelihood of retaining your top performers and mitigate risk in your compensation programs.

Wilmington Trust blunders on CEO Pay

pencil.jpgIt’s been a bad few weeks for Wilmington Trust Corp. Make that a bad year.

The $10.4-billion-asset Wilmington, Delaware-based bank, which specializes in advisory services for wealthy clients and personal trust accounts, reported a $370 million loss in the third quarter of 2010 after it beefed up its loan loss provision. The bank, which has been around since 1903 but recently stumbled on bad commercial real estate loans, will be acquired this year by Buffalo, New York-based M&T Bank Corp. The deal was announced Nov. 1 at a value of $351 million or $3.84 per Wilmington Trust share, a 46 percent discount to the prior trading day’s closing price. No doubt Wilmington Trust shareholders are still unhappy because the bank was trading at about $4.41 per share Tuesday morning on the New York Stock Exchange.

It gets worse.

The bank subsequently announced in December that it was yanking back most of the CEO’s 2010 compensation, more than $1.75 million, because his pay package violated the rules for banks that participated in the federal government’s Troubled Asset Relief Program. (Wilmington Trust received $330 million in TARP funds in December 2008.) Oops! Bloomberg News picked up the story last week from one of the bank’s regulatory filings.

The TARP rules can be fairly complicated. But they aren’t complicated on this point:No retention or signing bonuses are allowed for banks that took TARP money according to multiple compensation experts, including Paul Hodgson, senior research associate at GovernanceMetrics International, formerly known as The Corporate Library, and Susan O’Donnell, managing director at compensation consulting firm Pearl Meyer & Partners.

Back in June, when Wilmington Trust board member Donald Foley was hired by the board to replace Ted T. Cecala as CEO, Foley was given a $1.75 million signing bonus that was clearly disclosed to shareholders. A full $1.3 million of that was to be paid in restricted stock vesting immediately and the rest of the $450,000 was in cash.

Then in December, the bank said it was taking back the full $1.75 million signing bonus and an additional 16,000 shares in restricted stock. And it also rescinded a part of the pay agreement that awarded Foley 14 years credit on the company’s executive retirement plan. Ouch!

The board did agree to increase Foley’s base pay from $1.2 million to $1.5 million, which is allowed under TARP, but the move doesn’t nearly make up for what was taken away.

Contrary to news reports, this doesn’t look like a claw-back, where a company is forced to take back executive pay based on a restatement of earnings or fraud.

“It’s a unique situation,” says Tim Bartl, senior vice president and general counsel for the Washington, DC-based Center on Executive Compensation, which was started by the human resources industry group, the HR Policy Association. “(This was) a do-over, more than it was a claw-back.

So who screwed up? Did the compensation committee fail to look at the TARP rules when granting the incentive package? Or did a consultant paid to do this job fail to understand the TARP restrictions? Foley did not return a phone call this week on the matter and a company spokesman, Bill Benintende, issued a statement saying the board took the action to comply with TARP rules and:  ” . . . the Board wishes to express its recognition and appreciation of the fact that since he became CEO in June, Mr. Foley has worked tirelessly and effectively to address both the challenges and opportunities facing Wilmington Trust.”

O’Donnell and Hodgson had never heard of a TARP bank having to take back a signing bonus, and TARP rules have been in place for more than a year.
But what about Wilmington Trust? How long will Foley’s tenure last at this point, especially since M&T is buying the company? (He has been invited to join the board of the newly merged bank). What kind of fruitful relationship can the board possibly have with Foley after reaching into his pocket and taking back nearly $2 million?

“That has to be a difficult conversation,” Hodgson says, in what may be the understatement of the year.

Stanley Baum, an attorney who consults with companies on compensation issues for Lerner Law Firm & Associates in Westbury, New York, was less circumspect.

“My impression is, ‘what the heck is going on over there?”’ he says. “It’s so blatant, you wonder what sort of procedures are in place here and at other companies.”

The upside is there probably won’t be too many more of these banks that have this problem, say Bartl and O’Donnell – not after Wilmington Trust embarrassed itself publicly.

For a full primer on the pay rules regarding TARP banks, check this out:http://www.kattenlaw.com/treasury-releases-tarp-executive-compensation-and-corporate-governance-guidance-06-19-2009/

Next Steps for Compensation Committees

As our annual Bank Executive and Board Compensation event came to a close, I had a chance to catch up with Todd Leone, president & founder of Amalfi Consulting, to get his perspective on what directors should do once they leave the conference. With so much advice and recommendations communicated over the two-day event, I couldn’t help but wonder where do compensation committee members go from here. 

Here is what Todd had to offer:

Compensation Down the Ranks

It’s no real secret that the key to a successful organization is a strong and talented team of people. However, in today’s competitive and changing market, recruiting, rewarding and retaining top employees is a challenge. On the last day of our annual Bank Executive and Board Compensation event held at the InterContinental hotel in Chicago, this session focused on the role the compensation committee should take when planning competitive yet acceptable compensation plans for employees past the CEO.

Moderated by Jack Milligan, editor for Bank Director magazine, our panelists included Gayle Applebaum, managing director and founder of Amalfi Consulting, Kimberly Ellwanger, compensation committee chair at Heritage Financial Corp. in Olympia, WA and Donald Norman, partner at law firm, Barack Ferrazzano.


Oversee Not Micro-Manage

To begin the session, panelists addressed the less than obvious question of the compensation committee’s role when it comes to employees below the senior management team. With the liability now resting on the compensation committee, their responsibility for managing performance incentive plans now requires a more holistic approach. As Applebaum points out, the responsibility of the board is not to micromanage each plan, but rather to be aware of how they are designed. Compensation committees should actively review and evaluate the structure of all plans from the executive team down to the teller staff.

Don’t Have to Go it Alone

Sounds overwhelming? It can be, although the panelists agreed that the burden should not rest on the compensation committee alone, and that committee members should work in conjunction with the management team. While the board is ultimately responsible for oversight, they will most surely need input from the CEO and other senior team members.

The concern of some audience members was how to determine who was objective and well-versed enough in the requirements to help the board evaluate these plans thoroughly. Ellwanger openly shared that Heritage Financial Corp. had taken on a Chief Risk Officer whose responsibilities included sharing the list of all compensation plans semi-annually with the board for review. For those banks with limited resources, the following personnel should be able to help committee members analyze the plans on a regular basis:

  • Chief Risk Officer
  • Human Resources Officer
  • CEO/Executive Team
  • Inside Legal Counsel
  • Outside Compensation Advisor

Global Metrics Less Risky

Of course, assembling a qualified team of people to review and oversee all significant compensation plans at an institution is only part of the equation. Designing plans that are attractive to top talent is a critical piece of the puzzle. The panel encouraged smaller banks to not be hasty by cutting out bonuses and raising salaries as this would certainly result in the loss of key employees. Instead, banks should consider varying the levels of performance in their incentive plans by employee rank and then base those on individual and/or company-wide goals. Ellwanger provided the following example:

  • Top Level Team (Executives) = Metrics are driven by corporate performance
  • Next Level Team = Metrics are driven by bank and individual performance

As it turns out, regulators tend to lean more towards global metrics used in compensation plans as these are deemed less risky than behavioral based incentive plans.

Document, Document and then Document

Norman suggested that boards conduct at least a semi-annual risk analysis to evaluate the risks, goals and metrics developed. Throughout those sessions, it’s important to document thoroughly including meeting minutes, review changes and anything that speaks to the thought process behind the plans. A constant theme heard throughout the two-day conference was again reiterated in this session — be prepared to tell your story.

Different Voices; One Sound Board

As was I waiting for the next session to get started in the grand ballroom of the InterContinenal Hotel, I had this thought: If I was an outside director of a local community bank, would I rather spend one of my afternoons golfing, getting a root canal or telling the CEO of my board’s bank that he or she wasn’t doing the job as expected? Personally, I’d choose none of the above, but I’m positive that the majority of the 270-plus attendees would not have chosen the latter.

Which brings us to the last general session of day one where TK Kerstetter, of Corporate Board Member, artfully moderated the somewhat uncomfortable topic on handling situations most compensation committees want to avoid. The panel of compensation experts included Susan O’Donnell of Pearl Meyers & Partners, Henry Oehmann of Grant Thornton, and Alice Cho from Promontory Financial Group, who all naturally suggested what any expert would when you’re faced with a conflict — confront it.


Despite the somewhat obvious advice, the session focused specifically on guidelines for proactively managing the board and CEO relationship, effectively overseeing the CEO’s compensation and consistently conducting board evaluations. Susan O’Donnell started the discussions by outlining the following scenarios that many board members all too often find themselves struggling with:

  1. The compensation committee has designed the entire plan with no input from the management team and thus are experiencing an unexpected backlash that is costing the company time and money.

  2. The bank is being led by a dominate, yet high-performing, CEO who is driving most of compensation planning process, and therefore board members essentially have become lame ducks who rely too much on CEO.

  3. The CEO is best buddies with a few directors and as a result the board has lost all sense of objectivity.

If the above scenarios feel all too familiar to you, then the question became, how should the board deal with these scenarios, or at the very least work towards avoiding them in the future? The panelists all agreed that the following approaches will go a long way in setting the board up for success:

  • Set expectations with the CEO early on in the relationship.
  • Use outside advisers to help evaluate compensation plans, especially the CEOs.
  • Rely on the chair, lead director or compensation advisor to help have the tough discussions.
  • Don’t be afraid to think independently as healthy debates are important.
  • Know the compensation plans even for audit and risk team members.
  • Use board evaluations to hold each other accountable.

Clearly, the goal is to avoid dissension between the management team and the board while keeping the bank’s CEO happy and cooperative. Building these positive relationships starts by setting expectations, staying objective despite having differing opinions, and regularly evaluating your peers and the situation. Luckily, the National Association of Corporate Directors has a diagnostic book on doing peer reviews with directors available on its website at nacdonline.org.  

Be Prepared To Tell Your Compensation Story

Off to a good start on day one of the annual Bank Executive and Board Compensation event, as the general session continued with the next panel members settling into their soft brown leather chairs to present their viewpoints on how the latest round of regulations was shaping compensation planning. Moderated by Jack Milligan, the newly-appointed editor of Bank Director magazine, the panelist included compensation industry experts Michael Blanchard, partner for compensation advisor Blanchard Chase, Thomas Hutton at the law firm of Kilpatrick Stockton and Charles Tharp, EVP at the Center on Executive Compensation.


With increased government intervention courtesy of the Dodd-Frank Act, here are five key insights on the level of impact facing today’s compensation committee shared by the panel. 

  1. Be proactive! You just may find yourself in the position of having to actually educate the regulators on the guidelines. Just goes to show that everyone is still trying to figure these new requirements out.
  2. It’s not about the what but the how! New regulation isn’t about shaping compensation but rather changing the process of designing performance based plans.
  3. An emerging trend among many banks is to have an independent compensation consultant attend the committee meetings. While there are no hard stats on file to date, this process may be looked at more favorably by shareholders.
  4. Before developing compensation plans, do your homework by researching what your peers and public banks are doing with their incentive packages.
  5. Private banks under $1 billion are more at an advantage than disadvantage with regulation requirements, but every institutions should be prepared for regulatory reviews.

It was clear throughout this session that being prepared and ready to tell your story was the best approach when dealing with the new regulations. Knowledge is power and having the right team on the board and in management will go a long way in staying ahead of the curve.

Extra Credit: If you need a place to start, download this eight point checklist, courtesy of the Center on Executive Compensation, for help planning a pay structure for your institution. You may even gain some inside knowledge on what the regulators will be looking for during their reviews.

The Return of Darwinian Banking

Listening to Ben Plotkin, EVP and vice chairman at the investment banking firm Stifel Nicolaus Weisel, as he provided a broad industry overview at our Bank Executive & Board Compensation event last week in Chicago, the image that came to mind was a heavy-weight boxer who has been staggered by repeated blows to the head but somehow is still standing.

Looking at the fundamentals, there’s no question that the U.S. banking industry has been bloodied by the worst economic downturn since the Great Depression of the 1930. According to Plotkin, the industry’s profitability plummeted from a high-water mark of $128.2 billion in 2006, to $97.6 billion in 2007 – to just $15.3 billion in 2008. Plotkin illustrated this on a bar chart, and that dramatic 2009 earnings decline resembled a Sears Tower elevator dropping from the top floor to darn near the basement.


“Unreal” Earnings

Of course, we all know that industry’s record profitability from 2002 through 2006 was fueled by the bubble economy and a hyperactive mortgage market. Or as Plotkin put it, “A lot of people say those earnings weren’t real.” And indeed they weren’t considering how much of that money was given back in the form of loan and bond losses, but I think it’s also amazing that the banking industry didn’t sustain even more damage than it did.

The number of banks on the Federal Deposit Insurance Corp.’s troubled institution list rose to 829 in the second quarter of this year, but banks are dropping at a much lower rate than in the early 1990s, when the collapse of the commercial real estate market resulted in many more bank failures than we’re likely to see this time around.

Improving Trends

But there is light at the end of the tunnel for most banks, and it’s not necessarily a freight train hurtling towards them. Based on Plotkin’s numbers, it would seem that the industry’s asset quality problems have finally peaked. After rising sharply from 2006 through 2009, non-performing loans have finally leveled out and even declined slightly to about 3.2% in November. Healthy banks with strong balance sheets (including better than average asset quality) have also been able to raise capital from institutional investors.

The industry’s net interest margin (which is essentially the difference between the interest rate on a loan and all the costs associated with getting that loan) has also shown recent improvement. Through the first two quarters of 2010 the margin was approximately 3.85% — compared to 3.39% in 2006 and 3.35% in 2007, when the industry was (ironically enough) rolling in dough. Those numbers say two things to me.

One, loan pricing is gradually improving as bankers are able to charge higher rates on their loans. And two, the industry compensated for its cut-rate pricing in 2006-2007 with volume – which turned out to be a recipe for disaster.

Why would the big pension and mutual funds be willing to invest capital in a troubled industry? Perhaps because they anticipate a predatory environment in which the strong and the swift will devour the weak and the weary. “Many of the catalysts for renewal of the traditional M&A market are beginning to take shape,” Plotkin told the audience. Asset quality is slowly beginning to improve, signaling potential acquirers that the worst is over. Strong banks have access to capital, so they can afford to acquire. And banks with diminished earnings power and little or no access to institutional sources of capital may find that selling out to a more highly valued competitor is their only viable strategy to reward their long suffering owners.

It’s a Darwinian principal that has helped drive bank consolidation for the past 25 years, and no doubt for a few years more.


Say What on the CEO Pay Ratio?

The first day of our annual Bank Executive and Board Compensation event got off to a rousing start with two back-to-back sessions focused on how the regulations are effecting the compensation committee’s role. After the session, I had a chance to follow up with Mike Blanchard, partner at compensation advisory firm Blanchard Chase, for a quick video recap on his recommended approach for handling the controversial CEO pay ratio requirements.

Click play button to start the video:

As Mike points out in the video, the full effects of this new regulation are not yet known and will vary by company. However, the best way to deal with this piece of the regulation is to be prepared to tell your story on why you pay what you pay, talk through the process and feel good about your decisions. The last thing you don’t want is to find yourself contemplating something crazy like outsourcing your janitorial services just to help minimize the disparity in salaries.

Happy Employees = Happy Communities

This past week, Bank Director and The NASDAQ OMX Group hosted our sixth annual Bank Executive & Board Compensation Event in an unseasonably warm Chicago. After an early registration and light breakfast, over 270 bankers and advisors from across the country gathered in the large ornate grand ballroom of the Intercontinental Hotel to kick off our two-day event with an opening session on the Future of Performance Compensation Plans.

Moderated by Todd Leone of Amalfi Consulting, a panel consisting of a compensation committee chair, senior human resources executive and a board chairman shared their insights on how to design compensation programs that deliver a competitive edge, while still rewarding the CEO and balancing the needs of the company and shareholders.


To jump start the session, Todd presented the attendees with an overview on the four regulatory factors that have changed the responsibilities of compensation committees, and therefore making their position the most challenging of the board. These regulations consistencies include:

  • Compensation committees are now being held accountable for performance-driven compensation plans across the entire organization, including the lowest paid employees.
  • Clawbacks are predicated upon reinstatement of earnings, and performance bonuses will need to be re-paid if a loan goes bad.
  • Committee members will be instrumental in reviewing the risk of compensation plans and should have an audit process in place.
  • Members will need to look beyond the fiscal year to ensure that the team is focused on long-term goals as well as short-term ones.

Many observations and recommendations were presented by the three panel members but the following topics were considered the highlights of the discussion.

Managing Regulations & Risk Review

  • Greg Ostergren, the compensation committee chairmen for Guaranty Federal Bancshares, a $732-million institution out of Missouri, described the effectiveness of hiring a chief risk officer to help manage regulations, review compensation plans and to help the bank stay ahead of curve.
  • For smaller community banks where resources may be limited, panelists recommended that the compensation committee take on the duties of risk oversight. In some cases, the human resources or internal auditing team can take on this role of giving a more objective viewpoint.
  • While TARP banks are ahead of the curve with regard to risk review, panelists were in agreement that non-TARP banks should follow suit just to be prepared for the regulators.


Incentive Based Pay Structures

  • When it comes to executive compensation plans, one approach is to develop a mixed ratio plan that accounts for performance metrics, company culture, and business development. Paul Barber, SVP & HR manager for Graystone Tower Bank, a $1.6 Billion non-TARP bank, shared that 50% of their executives’ incentive compensation is based on credit quality.
  • A panel member also suggested that 30-35% of the Relationship Manager’s reviews be based on a clean portfolio.
  • Bonus incentives for the commercial lenders can be changed from cash to stock options, so that employees are compensated on the performance of the bank over long periods of time rather than the ability for someone to make a quick buck.

Recruiting & Retention Challenges

  • With all the regulations coming down the pike, attracting top talent to a troubled bank can be a challenge. One creative solution is to bring new recruits on as consultants before submitting them to the FDIC for approval as management.
  • Sam Borek, chairman and acting CEO of OptimumBank in Florida, reminded the group that while the FDIC doesn’t approve of signing bonuses, it does approve of staying bonuses which can aid in the recruiting of top management talent.
  • In terms of future compensation planning, clawbacks can actually work as a retention tool by requiring that the executive team receives a bonus after meeting their three-year goals during their employment term.

While several points were discussed among the panel, the overall recommendation was to consider what works best for your bank based on your region, business goals and staff needs. And as Sam Borek so thoughtful shared, his company’s number one stakeholder group is the employees, as happy employees create happy customers who make for happy shareholders who ultimately make for happy communities. Everything else falls in line behind that key mission.