Thrifts Budget 4.15 Percent Salary Increases

Article excerpt

America's Community Bankers has just completed its annual survey of member compensation practices and trends. About 600 institutions participated in the survey, making it one of the most comprehensive sources of data on compensation in the banking industry.

The survey contains data on compensation policies benefits, perquisites, salaries and bonus levels for more than 100 job positions, as well as compensation practices for boards of directors. No other survey offers such a wide range of job descriptions or geographic scope.

Policies Tend Toward

Higher Pay

Reflecting a continuation of strong earnings in 1995 that are likely to extend into the next year, 70.3 percent of the respondents expect to increase salaries in 1996, versus 29.3 percent who remain undecided on salary changes.

The trend is continuing to link salary increases more closely to institutional rather than departmental performance.

The average expected increase for 1996 is 4.15 percent, slightly below the 4.45 percent projection last year, but above the annualized Consumer Price Index gain of 2.6 percent for the 12 months ending August 1995.

More than 69.5 percent of the reporting institutions offered bonus plans in 1995, down from 79.6 percent in 1994. Savings plans were offered at 59 percent of the institutions in 1995, up from 55.6 percent the previous year.

This increasing trend in savings incentive plans is expected to continue in 1996 with 66.3 percent of responding institutions planning to offer a savings incentive plan.

More than 70.7 percent of the survey respondents offered employees a pension plan in 1995, a drop of 2.4 percentage points from 73.1 percent in 1994. Of those institutions that are not currently offering a pension plan, the overwhelming majority indicated that the reason for pension termination was the implementation of 401(k) plans. Approximately 26.7 percent of the respondents offered profit sharing plans to executives in 1995, about the same percentage as 1994.

Fewer institutions offered profit sharing plans to management and staff levels, with respondents reporting 25.9 percent and 23.4 percent, respectively, down from 26.5 percent and 25.0 percent as reported in the previous year.

About 4.4 percent of the survey sample engaged in layoffs in 1995, down from 6.9 percent in 1994. Only 1.7 percent of respondents offered early retirement packages/voluntary separation agreements to their employees in 1995, unchanged from 1994.

Although institutions remain cost conscious, and staffing requirements may be reduced further, especially when associated with merger and consolidation, the trend toward improved economic performance has significantly reduced the number of forced staff reductions. …