Credit union boards replacing retiring baby boomer CEOs are experiencing major sticker shock, according to one of the industry’s leading staffing firms.
“Within the last five years we’ve seen our industry leaders start to retire, and big credit unions merge, and credit unions that haven’t had to recruit a CEO in years are looking at executive compensation packages today and doing double takes,” said Susan Mitchell, CEO of O’Rourke, Mitchell and Associates.
Tenured executives, increasing size and complexity of credit unions, and generational gaps all play a part, she said. Sometimes the disparity between retiring and incoming CEO pay is so large, it creates feelings of resentment for the outgoing leader.
“Retiring CEOs put in years building trust with their boards,” Mitchell said, “and for their replacement to come in and ask for that much money…and get it…almost goes against the grain of boomer thinking, that you should work your way up.”
Mitchell said today’s new CEOs want a market-driven core salary, additional “at risk” pay which is based on key performance measurements, and a competitive retirement plan. Executives also typically receive a company car, and some credit unions are assisting in relocation, given today’s economy and real estate market.
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