ORLANDO, Fla. – Most credit unions want to groom someone from within the organization to take the CEO spot, but the reality is one-third of them are hired from the outside. This, according to Joe Tripalin, vice president of executive benefits for CUNA Mutual Group, who said the reason more boards are looking for outside hires is because credit unions are getting bigger and more complex. Tripalin spoke on the topic at CUNA Mutual's recent Discovery Conference. "Credit unions continue to grow in size and complexity, and boards will need to attract outside executive talent, many from the banking industry," Tripalin said. "That will be challenging, because bankers are used to more generous and complex compensation packages." More credit unions are offering Supplemental Executive Retirement Plans (SERPs) to create "golden handcuffs" for their executives, he told Discovery attendees. These arrangements set aside money and/or other benefits for the executive in exchange for that individual's continued service to the credit union. Credit unions are also committing their own funds to establishing SERPs for CEOs, generally setting aside 2-4% of credit union assets into an investment fund. Larger credit unions are earmarking a slightly smaller percentage. After a set amount of time, perhaps 10 years, the executive receives the growth on the invested amount while the credit union gets back the original amount it invested, plus cost of funds. Tripalin also alerted credit unions to an Internal Revenue Service announcement expected later this month that will provide broader guidance on a 2004 Private Letter Ruling that stated credit union deferred compensation plans aren't covered by IRS Code Section 457. If the IRS believes Code 451 instead applies to credit unions, it could put credit unions on a more even playing field with for-profit financial institutions, he added. According to a 2004 survey from the National Association of Credit Union Chairmen (NACUC), the average base salary for credit union executives was $152,000 with the average bonus being 10%-13% payout at an average of $21,000. Tripalin said the numbers show "good progress" but compared to bank executives, the credit union industry is behind. In every asset measurement, bank executives earn more than CU execs. In comparable size institutions with more than $500 million in assets, bank execs make two times more than CU execs. Long-tenured CU CEOs – those that have been at the helm for 15 years or more – fare even worse with their compensation falling significantly below the NACUC averages. [email protected]