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 27, 2005 #05-69
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 4.1 percent in 2005, according to America’s Community Bankers’ 2005 Compensation Survey, an increase on a par with survey findings over the past eight years.

“Once again, bankers have shown consistency when it comes to the world of compensation,” said Debra Cope, senior vice president of publishing. “Salary increases continue to hover around the 4 percent mark, bonuses continue to be tied to bank performance and benefits continue to be tightened in these days of economic concerns.”

The survey found that average CEO salaries trended upward over the past seven years, with the 2005 average figure breaking the $200,000 level for the first time. The 2005 average was $212,569 compared with $187,778 for the previous year. Variations by asset size were considerable, ranging from $92,774 for institutions with less than $50 million in assets to $427,841 for institutions with more than $1 billion in assets.

The average profit-sharing/bonus payment for CEOs in 2004 was $73,129, an increase from $55,472 the year before but comparable to the $71,900 figure reported in 2002. 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.

The ACB Compensation Survey, published annually for the past 32 years, is the oldest in the banking industry and the most comprehensive source of data and policies on compensation for community banks. Salary increases at community banks continued to be linked to individual performance, with bonuses tied to bank performance. Nearly nine in 10 (88.2 percent) of respondents considered individual performance in determining salary increases, while three in 10 (31.6 percent) based salary increases on bank performance. The percentages add to more than 100 percent because some banks reported using both methods. Bonuses were tied to a bank’s performance (80.0 percent) versus to an individual’s performance (64.6 percent). These figures generally paralleled those obtained in past years.

“Compensation for directors continued to grow at a considerable rate, not an unreasonable finding in these days of Sarbanes-Oxley,” said Cope. “The world of directors and burden of governance they carry on their shoulders has increased considerably over the past few years.”

The average total compensation for outside directors was $17,786 in 2004, compared with $15,850 the previous year. The average total compensation of inside directors was $15,248 in 2004 compared with $13,463 the previous year. Half of respondents based directors’ fees on attendance.

On average, banks allocated 15.7 percent of their total compensation to benefits in 2004, generally consistent with previous years, but down slightly from 16.2 percent the year before.

This year’s survey includes special white papers on incentive compensation programs, the rising costs of employee health benefits, and compensation strategies for a bank’s securities sales force.

The report was compiled from 375 banks participating in the survey. The survey includes compensation information on 179 community bank positions. 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.

The survey is available as a 489-page manual, on a searchable CD-ROM, or as a discounted combined package. Pricing starts at $515 for ACB members and $665 for nonmembers, with discounts are available to survey participants. 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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