ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release September 1, 2004 #04-44
E-mail: [email protected]

ACB SURVEY FINDS INCREASE IN COMPENSATION AMONG EMPLOYEES AT COMMUNITY BANKS

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WASHINGTON, D.C. — Base salaries for community bank employees increased an average of 3.9 percent in 2004, according to America’s Community Bankers’ 2004 Compensation Survey. The increase, measured as of January 31, is on par with the four percent average annual increase the survey has found over the past seven years.

“Community banks remain a bright spot in the national economy, both in terms of performance and employee compensation,” said Debra Cope, senior vice president of publishing. “With industry profits at near-record levels, banks continue to compete for workers by offering competitive salaries and benefits.”

Among CEOs, average base compensation ranged from $79,821 for institutions with less than $50 million in assets to $371,765 for institutions with more than $1 billion in assets.

The ACB Compensation Survey, published annually for the past 31 years, is the oldest in the banking industry. It is the most comprehensive source of data and policies on compensation for community banks.

The survey covers banks in seven asset-size categories, from small institutions with assets of less than $50 million to large ones with assets of at least $1 billion. Average CEO base compensation increased in all five categories of banks with assets of up to $500 million. Average CEO base compensation fell in the other two categories, banks between $501 million to $1 billion in assets and banks over $1 billion in assets.

“Close examination reveals that this shift reflects year-over-year changes in the survey sample, not a move by banks to pare salaries,” said Cope. Several larger banks with highly compensated CEOs did not participate in the survey this year, bringing the averages down. As a result of this statistical quirk, the survey showed that average base compensation for bank CEOs nationwide declined to $187,778 in 2004, from $196,526 in 2003. However, the average base salary was up from $176,230 in 2002.

CEOs of banks with assets of $201 million to $300 million took home the biggest pay increases, with average base compensation of $180,306 in 2004, up 7.8 percent from $167,287 in 2003.

The average profit-sharing/bonus payment for CEOs in 2003 was $55,472, a sharp decrease from $71,900 the year before, but more along the lines of the $51,894 reported for 2001. This component of total compensation for senior executives has fluctuated over the years because it tends to be more sensitive to bank performance than salary, Cope explained.

Salary increases at community banks continued to be linked to individual performance, with bonuses tied to bank performance. Fifty-nine percent of respondents considered individual performance in determining bonuses, and even more, 84.6 percent, used it in setting salary increases. Similarly, 79.9 percent used bank performance in determining bonuses and 31.8 percent used it in determining salary increases.

Compensation for inside directors jumped 13 percent in 2003, following an 11 percent hike in 2002. “This increase undoubtedly reflects the growing complexity of the corporate governance job,” Cope said. The increase in compensation for outside directors was a more modest 3 percent in 2003, following a 10 percent hike in 2002. Nearly half of respondents based directors’ fees on attendance.

The average annual compensation for directors at banks with assets of less than $50 million was $6,452, and $25,898 at banks with more than $1 billion in assets.

This year’s survey includes special white papers on the new overtime compensation rule, emerging trends in directors’ compensation and performance-based incentive plans. * * * * *

The report was compiled from 361 banks participating in the survey. The survey contains a wider range of job descriptions and geographic scope than any similar publication. This edition includes compensation information on 179 community bank positions, two more than last year’s.

The survey is available as a 488-page manual, on a searchable CD-ROM, or as a discounted combined package. Pricing starts at $450 for ACB members and $595 for nonmembers. To order visit www.AmericasCommunityBankers.com or call (888) 872-0568.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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