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 August 28, 2002 #02-39
E-mail: [email protected]

ACB SURVEY FINDS INCREASES IN COMPENSATION, GOOD CORPORATE GOVERNANCE AT COMMUNITY BANKS

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WASHINGTON, D.C. — The base compensation for community bank chief executives averaged $176,230 as of Jan. 31, 2002, an increase of about 4 percent over the previous year’s $169,959, according to America’s Community Bankers’ 2002 Compensation Survey.

Overall, bank employee staff salaries also increased by an average of 4 percent, the same annual average increase reflected in the survey for the past six years.

At a time of increased attention to corporate responsibility, the survey found that community banks are already practicing good corporate governance. For example, nearly half of the respondents had an outside board chairman. And half of the banks surveyed based directors’ fees on attendance at board meetings. Most banks’ full board of directors met frequently, on average 13 times a year.

Directors’ compensation remained modest. Outside directors’ compensation averaged $13,976, a slight decline from the previous year. Inside directors’ compensation averaged $10,769, a slight increase.

Among CEOs, average base compensation ranged from $66,028 for institutions with less than $25 million in assets to $366,523 for institutions with more than $1 billion in assets. The average base compensation for CEOs in metropolitan areas was $198,518, up about 4 percent over the previous year. Stock institution CEOs averaged base compensation of $196,662, about 3 percent above the 2001 survey; mutual holding company CEOs averaged $193,575, up 1 percent; and mutual institution CEOs averaged $150,319, a 7 percent increase. The difference between stock and mutual salaries reflected, in part, differences in average asset size.

The average base salary for CEOs at commercial banks was $199,839, an increase of 8 percent, and for CEOs at savings institutions, $169,787, an increase of 2 percent.

The average profit-sharing/bonus payment for CEOs in 2001 was $51,894, an increase of about 10 percent from $46,390 in 2000. This component of total compensation for senior executives has fluctuated over the years because “it tends to be more sensitive to bank performance and shifts in changes in executive-level compensation policies,” explained Steve Davidson, ACB senior financial economist and author of a commentary on the survey’s findings.

For other community bank employees, Davidson said, “The survey showed an increasing trend to link salary increases to performance. Most community banks surveyed based increases in compensation on either individual performance or bank performance.”

The ACB Compensation Survey, published annually for the past 29 years, is the oldest in the banking industry. It is the most comprehensive source of data and policies on compensation for community banks. The report was compiled from 428 banks participating in the survey. The survey contains a wider range of job descriptions and geographic scope than any similar publication.

“Over the years, I’ve found that ACB’s Compensation Survey provides us with a bigger picture in evaluating the comparative factors — benefits, asset size, ownership type — applicable to our institution,” said Nick W. Mitchell Jr., president and CEO, Piedmont Federal Savings and Loan Assn., Winston-Salem, N.C. Mitchell is a member of ACB’s board of directors.

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This edition continues to add data and questions as the industry evolves. The survey includes compensation information on 172 community bank positions. This year, 15 new positions were added, focusing on information technology and operations functions and financial product development and marketing positions.

This year’s survey includes two special white papers: “Executive Compensation Profiling: The Link to Strategic Compensation Planning” and “Gaining Agreement: Negotiating Conflict While Strengthening Relationships.”

The survey is available as a 473-page manual or on a searchable CD-ROM, or as a discounted combined package. 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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