Magazine article American Banker

Benefit Plans under Scrutiny

Magazine article American Banker

Benefit Plans under Scrutiny

Article excerpt

Benefit plans for bankers will be under the regulatory microscope this year, the result of a section of the 1991 FDIC Improvement Act that gives regulators new powers to set standards for bank compensation.

One result? To guide them in setting benefit policies, banks will be looking more and more at what other institutions are offering.

"This new law is going to force banks to collect peer group data and track and keep benefits within set ranges," said W. Keith McLeod, partner and director of the executive compensation practice at Huggins & Associates, which recently did a survey on compensation at banks with less than $1 billion in assets.

The survey found that while almost all banks offer health insurance and term life insurance as benefits to all employees, other benefits differ greatly -- depending on the size of the bank.

Benefits and Bank Size

Banks with assets under $250 million are much less likely to offer a wide range of benefits and perks than larger banks.

For example, stock option plans are offered by 40% of the larger banks that responded to the survey, while only 22% of the smaller institutions offer it.

For all size banks, stock options are normally only offered to the chief executive officer, other key executives, and directors.

The survey found that while more than 80% of the banks with $250 million to $1 billion in assets offered long-term disability, educational assistance, accident insurance, and a profit-sharing plan, less than 75% of banks under $250 million in assets offered these programs. …

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