ALEXANDRIA, Va.-NCUA's top officials are among the highest paid of the federal financial services regulators, but have far fewer employees making more than $100,000 than most, according to data compiled by the American Banker. One former Federal Deposit Insurance Corporation (FDIC) chairman told the paper that NCUA employees' pay was not commensurate with their responsibilities. Seven of the 50 highest-paid financial services regulatory agency employees work for NCUA, one of the smallest financial regulatory agencies. NCUA pays 11 workers more than any employees at FDIC, the Office of the Comptroller of the Currency (OCC), or the Office of Thrift Supervision (OTS). While NCUA Executive Director Len Skiles explained that the agency's pay system was based on those at the FDIC and OCC, NCUA does not employ a salary cap. FDIC, OCC, and OTS follow a voluntary salary cap of the salary of the Vice President of the United States, currently set at $192,600. The reason behind not capping salaries, Skiles explained, is that the agency was already having trouble with salary compression, where subordinates made close to what their supervisors made. Additionally, employees were unmotivated to go for jobs with more responsibilities inside the agency without much extra compensation, he said. This also led to a high turnover rate at the agency, about 11.8% in 1998. Just three years after the increased compensation structuring, turnover has dropped to just 6%. Skiles' annual salary is the highest at NCUA at nearly $252,000, more than the presidents of eight Federal Reserve banks, according to the Banker. Former FDIC Chairman L. William Seidman pointed out that the 9,814 credit unions overseen by NCUA hold assets of $538 billion in aggregate-$40 billion less than those held by Citigroup alone. The agency is "responsible for assets that are a minute part of what the other regulators are responsible for," the Banker quoted him as saying. "People should get paid in connection with their responsibility.In government, that is not always true. In government, much more depends on how much political independence you have. We know that the credit unions have the most powerful political organization" on Capitol Hill, he said. NCUA defended its salaries by stating that the former salary cap kept them from hiring and retaining qualified top officials. "We don't have the asset size of banks, obviously, but we play a fairly significant role over all in helping to improve the financial stability of the United States," Skiles said. He also explained to Credit Union Times, "It is disingenuous to look at our salaries without looking at the entire compensation package." While Skiles said NCUA has "a very valuable staff with a great level of expertise," NCUA is such a small agency, it could not provide as comprehensive a benefits package as some other agencies, like better 401(k)s, vision care, and others. NCUA also requires more travel than other agencies, which Skiles said is the kind of `quality of life' issue reason past employees have given for leaving the agency. He also explained that in addition to regulating federal credit unions, NCUA is the insurer of all federal credit unions and most of the state chartered credit unions, which it also regulates in part. Because of these additional responsibilities, it is difficult to make comparisons, Skiles suggested. While some employees' salaries may seem high, NCUA only pays 24% of its employees over $100,000, while the Office of Federal Housing Enterprise Oversight pays 63% of employees at least that; and 46% of the Federal Housing Finance Board's workers are above that mark. According to the Banker, the FDIC pays 33% of its staff more than $100,000. The Fed, OCC, and OTS pay between 27% and 29% of employees over $100,000. NCUA is also taking steps to slow pay increases now that the salaries are comparable to the other Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) agencies. As previously reported by Credit Union Times, NCUA employees received half their pay increases in a lump sum not to be included in determining the following year's pay increase. Additionally, NCUA's merit pay increases were smaller overall than the other agencies. Employee pay and benefits account for the bulk of NCUA's budget, which is funded by federal credit unions through operating fees and all federally insured credit unions through the overhead transfer rate from the National Credit Union Share Insurance Fund. NAFCU President and CEO Fred Becker, whose organization has served as a real budget hawk, commented, "Seeing the salaries of senior staff at NCUA is always an eye-opening experience, and I am sure the NCUA Board will be looking at these numbers as part the budget process. However, what drives the NCUA budget is overall staffing levels.We have strongly urged the agency to reduce FTE (full-time equivalent) slots through normal attrition, especially in light of the declining number of credit unions and the implementation of risk-based examinations." "In the past our research has shown the salaries of NCUA regional directors were roughly comparable to their counterparts at the banking agencies. So we'll take a closer look at these latest findings," said CUNA President/CEO Dan Mica. "If there is now a wider disparity, that would be an issue we would raise with the NCUA Board. Our concern has always been to ensure the agency is budgeting its resources as efficiently and effectively as possible." [email protected]