Magazine article American Banker

Community Bank CEOs' Pay Up 4%

Magazine article American Banker

Community Bank CEOs' Pay Up 4%

Article excerpt

The strong performance of community banks in a faltering economy translated to a 4% increase last year in the paychecks of their chief executive officers.

Chief executive officers made an average of $176,230, up from the $169,959, according to an annual compensation survey released Wednesday by America's Community Bankers.

Not surprisingly, larger community banks paid more than smaller ones. CEOs at banks with less than $25 million of assets made an average of $66,028, while their counterparts at $1 billion-plus banks brought home $366,523.

The average base salary paid to CEOs at commercial banks was $199,839, an increase of 8%. At savings banks the average salary rose 2%, to $169,787.

Four hundred and twenty-eight community banks participated in the survey, which tracks compensation trends for 172 positions at banks and for directors.

Over all, paychecks for the average bank employee rose 4% for the sixth year in a row.

Steven Davidson, a senior financial economist at ACB, said four out of five banks reported linking compensation to individual performance.

"There's much closer scrutiny of compensation packages," Mr. Davidson said. The idea is to use the structure of the base salary, bonus, and profit sharing to align the senior executives' interests with the company's, he said.

When it came to profit sharing, the average bonus paid to a CEO was $51,894, an increase of about 10%, from $46,390. Cash bonuses were paid by 97% of banks offering bonus plans, and two-thirds considered individual performance when determining bonuses. …

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