E.H. “Pete” Weldon knows that in credit unions, as in life, youget what you pay for. Never is the phrase truer than when fillingthe position of president/CEO.

As chair of the $209 million 1stCommunity Federal Credit Union in San Angelo, Texas,Weldon said he worked very hard to make sure when Bill Nikolauk waspromoted to take the helm of the financial institution in 1996 thathis compensation was raised accordingly.

Weldon said he didn't quite get the 40% spike to Nikolauk'sformer salary as vice president of operations that he was seeking,but the board approved an increase close enough to keep someonethat Weldon and others considered an excellent candidate to leadthe credit union.

“We worked very hard to get Bill the right level ofcompensation,” said Weldon, who has chaired the credit union boardfor the past 15 years. “You always run into board members who say,'but he'd be making more than I am.' You just have to get past thatobjection.”

Today, Nikolauk's salary is more in line with national standardsas measured in the 2013 CEO compensation survey released bythe NationalAssociation of Credit Union Chairmen, a Del Mar, Calif.-basedtrade group that serves the educational needs of credit unionboards of directors at 160 credit unions. 1st Community fits intothe group of credit unions with assets of $200 million to $499million. Top executives for credit unions in that category averagean annual base and variable salary combination of $234,071,according to the survey. Nikolauk's compensation is a little abovethat level, said Weldon, a past NACUC chair.

NACUC's survey serves as a valuable benchmark for boards tryingto answer the CEOcompensation question for themselves. As one of severalindustry surveys that deal with compensation data, NACUC's researchlooks at compensation patterns in various regions of the country,using asset size as a fairly reliable measure of credit unioncomplexity and CEO responsibility, according to Celeste Shelton,NACUC executive director.

“It's important that chairmen and their boards be informed aboutcompensation trends,” said Shelton of the survey, now in its 20thyear. “Without this information it would be difficult to develop acompensation package that's competitive.”

The NACUC survey measures several aspects of CEO compensation,including base and variable pays rates, benefits packages and CEOpay in relation to second-in-command salaries at the sameinstitution. It also divides compensation into five different assetsize categories.

For credit unions with $99 million or less in assets, total 2013compensation projections averaged $125,528 according to surveyresults. The rates increase across various asset sizes, with CEOsof credit unions with $1 billion or more in assets earning anaverage of $462,092.

Despite a 20% increase since 2011's levels were measured, creditunions CEO salaries still lag behind those of comparable bankpositions, which can include total compensation packages and stockoptions. What's more, the salaries may not be in line with theincreased challenges credit union CEOs have been asked to overseein recent years, according to Shelton.

“Are salaries keeping pace with complexities? I would say not,”said Shelton. “They will need to catch up with the regulatoryburdens being placed on credit unions.”

In a changing market, comparative data is just one component tocalculating CEO compensation. At the $500 million GenerationsFederal Credit Union in San Antonio, the board as well asCEO Steve Schipull undertake assessments of the top position andthe tasks that the executive faces, according to Rose Rangel, boardchair of Generations.

To determine how much the CEO position of the credit union isworth, Generations currently uses BalancedComp, which gatherssurvey data from a number of sources, including American BankersAssociation, the Economic Research Institute, the Delves Group,Crowe Horworth, and CompData, said Rangel, who also serves as aNACUC chair. Of the survey data, 74% is based on credit unioninformation and the other 26% comes from banking, she added.

In addition to the NACUC survey data, credit union informationalso is gleaned from CUES, CUNA and various credit union consultingfirms, said Rangel.

Generations' board undergoes a CEO evaluation process indetermining compensation that includes a variety of measures. Theevaluation package covers board policies as a point of reference,an evaluation form that serves as a subjective part of the overallperformance scorecard, business plan attainment success, NCUAexamination scores and employee survey results.

Schipull performs a self-evaluation prior to the boardevaluation, measuring many of the same attributes and sharing itwith the chair, said Rangel. One aspect some credit unions fail torealize is the role boards play in their CEOs' success.

“The ultimate success of the CEO skill base hinges on how wellthe board has identified the attributes and expertise the CEO needsto bring to the job,” Rangel explained. “Our board focuses on howwell the CEO does regarding short- and long-range goals, staffdevelopment, self-improvement and getting along with others and thecommunity as a whole.”

When it comes to selecting a CEO for the credit union,compensation certainly plays a role, but it is not the mostimportant characteristic, said Rangel. Financial integrity,aligning vision and strategic change, a strong leadership andachievement drive, dedication to employee development, communityrelations skills and family values all come into play.

“The CEO that is chosen must be distinctly different,identifiable by characteristics that others will admire and want toemulate,” said Rangel. “We're looking for someone who brings hardand soft skills to the table, and most importantly a person who iscertain he can bring long-term success to the credit union.”

Being located in San Antonio, considered to be a highlycompetitive financial services market, is in some ways an assetwhen it comes to attracting and retaining top candidates, saidRangel.

“The San Antonio market pays 105% of the national average at theexecutive level and so our executive salary ranges are adjusted toreflect this,” said Rangel. “Our board feels that we pay a verycompetitive base salary.”