Compensation Surveys: Things They Won't Tell You

Would you feel comfortable standing in front of members or regulators and defending your executive pay program? Would you be able to explain how it works, how it supports your strategic plan and the overall well being of the membership? The following article outlines the challenges of using traditional compensation surveys to answer these questions.

Executive compensation committees often start each year with the same question,“What are other credit unions doing?” It is understandable given today’s regulatory environment and the overall public sentiment regarding excessive executive compensation. In the frenzy to obtain the latest salary survey, however, many committees simply overlook the most basic question, “Is the survey actually any good?”

High-performing credit unions are often characterized by straightforward compensation programs based on a clearly stated compensation philosophy that demands financial and member satisfaction results. Knowing what other credit unions are doing through competitive data helps to generate ideas, establish pay levels and provides a reference point for ensuring pay designs are within the bounds of market practices.

Unfortunately there is no perfect data source. Some are better at hiding their flaws than others, just as a movie director might use a camera filter to soften an aging movie actor’s features. Here are some things your salary survey provider might not tell you.