Board Due Diligence on CEO Pay: Opinion
Credit union boards collectively have many talents. With the NCUA mandate to diversify skill sets within the board more than ever, many areas of board responsibilities require directors to learn and seek consultation. One such subject that usually calls for extra help due to its complexity is CEO long-term benefits.
The CEO’s long-term benefit is just one piece of the total compensation package, which also includes base pay, short-term bonus, qualified retirement plans and perquisites. However, the CEO’s long-term retirement plan is a major part of total compensation. A long-term benefit plan that is designed and implemented proactively will benefit both the CEO and the credit union members.
Through a properly designed RFP, the board will learn about the experience, expertise and capacities of each vendor and be able to make a sound selection.