CEOs at B.C.’s credit unions are, on average, receiving a fraction of the compensation enjoyed by their peers in the national financial sector, according to a study commissioned by Vancouver-based Central 1 Credit Union.
The study found B.C. credit union CEOs receive between 8% to 22% of the total direct compensation of their peers in similar positions in the financial services industry. When one looks at the compensation for the CEOs at Canada’s big banks, the study found B.C. credit union CEOs were paid 5% to 10% of what the banks’ leaders make.
In accordance with guidelines provided by B.C.’s Financial Institutions Commission, some of the province’s credit unions are disclosing the annual compensation of CEOs and their board of directors.
Central 1 states it commissioned the study to provide credit unions and their members with some context and information when they are considering compensation levels.
“Credit union boards continue to work on strengthening the governance of their credit unions. Greater transparency about CEO pay is just one of the ways they are doing that,” says Don Wright, CEO of Central 1.
The report looks at total direct compensation, which includes base salary and any cash or equity incentive plans. It compares compensation in different industries and sizes of organizations by using a “job size” comparison, which adjusts for size, scope, complexity, strategic demands and other factors, using a methodology that compares jobs based on elements that are widely recognized as drivers of pay.
The study was conducted by the Hay Group, a global management consulting firm, whose Canadian office is based in Toronto.