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.
A board or compensation committee without experience in this field should consider hiring a consultant who is an expert in credit union long-term benefits to assist them through a request for proposal process. By calling on such expertise, the board will become educated about these plans, fulfill their fiduciary responsibility and complete the appropriate due diligence. Additionally, good guidance should result in a plan that is reasonable, affordable and effective.
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