There are certain subjects that traditionally have been taboo for discussion in polite circles-politics, religion, and sex. Add to the list salaries. Most people are sensitive about salaries, especially their own. Those making big bucks especially prefer to keep their paychecks confidential. If and when salary information does become available, many are quick to pass judgment. This is especially true when it comes to high-profile executives who manage national trade groups. As credit unions and thus the organizations that serve their needs have grown, so has the annual compensation levels of those who manage various credit union trade groups. At one time the CUNA president and CEO (known as the managing director back then) took home a whooping $36,000 a year. CUNA's current president and CEO, Dan Mica, is paid well over $600,000 a year. According to press reports, the average financial trade group's salary was slightly over $700,000. Although many of these individuals make more than Mica, they do not necessarily face the same scrutiny that someone representing credit unions does because, for one reason, their typical constituent is considerably better heeled. For example, the American Banker's Association executive vice president (top staff position) Donald Ogilvie earns $832,000, a sum that is certainly in the ball park with the group's typical member CEO's pay scale. Plus, most get stock options. On the other hand, Mica's $600,000 plus salary is probably higher than every credit union CEO in the country. Overall, Mica's compensation falls somewhere near the middle of his peer group of financial services trade association chief executives. On the high side is the CEO of the Investment Company Institute who clocks in at about $1.2 million. On the low side is NAFCU's president and CEO Fred Becker. His annual compensation level didn't even make the charts, something that the NAFCU Board probably needs to address soon. Some credit union observers have complained that Mica's pay is too high. Based on what? How much previous CUNA CEOs made? How much they themselves make? How much members of CUNA's Board make in their jobs? Based on what other financial trade association executives make? Based on compensation levels of CEOs of credit unions that belong to the association? Compensation experts will tell you more than the issues raised by such questions, what really counts in establishing an equitable pay scale is the worth of a position at any given point in time. Add to that equation how well the current occupant of that position in doing in carrying out his or her leadership and management responsibilities. Well-paid executives have long been aware that there are two ways to get more pay. First, quit and go to a job that pays more. For example, get a job managing a larger and more complex trade association. Second, grow the organization to increase your own worth as the person responsible for that growth. That's what Dan Mica did in his five-plus years as CUNA president and CEO. That's what Fred Becker is well on his way to doing as NAFCU's chief executive. With a year 2000 pay increase of 6%, Mica's annual compensation is the highest it has ever been for any CUNA paid staffer. At the same time, CUNA itself is booking some record numbers. There is little comparison between the CUNA of today and pre-Mica, no matter which one of dozens of possible measuring sticks one chooses to use. Like these: the group's annual revenues increased to $44.3 million, nearly 40% over the previous year; net assets rose 67% to $12.9 million; the affiliation rate has reached an all-time high; CULAC contributions are at record-setting levels; CUNA's reputation as an influential trade group is in the top percentile; and its grassroots lobbying efforts have never been more effective. In other words, Mica grew the organization and by so doing increased the value of the CUNA CEO position. Incidentally, that same logic can be applied to compensation levels for credit union CEOs. A growing number of credit union CEOs have played a key role in growing their credit union to its present size. It is no surprise then that CU CEO compensation surveys indicate that compensation levels for credit union CEOs have begun to show good increases. One caution about all of these surveys: they merely document what's going on in the CEO marketplace. They do not indicate what a particular CU CEO job is worth, only what those currently in the job are getting paid. These surveys need to be used by credit union boards only as a guideline. Will credit union CEOs eventually reach the same compensation levels as their for-profit counterparts at similar sized banks? Probably not, if for no other reason than the fact that therein lies one of the basic differences between working for a for-profit and a not-for-profit financial institution. A recent article by a consultant specializing in assisting credit unions to convert to thrift charters actually attempted to make the case that credit union CEOs should push for a thrift conversion in order to get paid at the same level as bank CEOs. He is forgetting one very important fact about credit unions: they are owned by the members and thus every decision must be made in light of how it will directly benefit the members. Converting to a thrift charter primarily for the CEO's sake, or for that matter to benefit the board of directors, is definitely being done for the wrong reasons. That must be why any charter change has to be approved by the membership. Open and candid discussions involving politics, religion, and sex will probably remain taboo forever, but salaries shouldn't be a source of controversy as long as people at all levels are paid what they are worth to the organization. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail [email protected].