By Opal Tomashevska and Kwame Smith
Many of the executives who lead today’s credit unions have been in the industry for decades. As such, they are full-time, passionate advocates of the people-over-profits philosophy. This is a great thing for the membership, staff and community. It can, however, have some drawbacks for the executive’s own financial well-being.
Two significant setbacks of an under-compensated C-suite
The fact of the matter is that traits like altruism and selflessness can stop an executive from asking for the compensation they really need or want. This can set up a credit union for the potential of two undesirable outcomes.
First, an under-compensated executive is a vulnerable executive, especially in today’s highly competitive talent marketplace. The financial services sector needs tenured leaders who also have the soft skills credit union executives are known for—and it has the money to pursue them.
Second, inadequate salary and benefits packages may complicate succession planning, making it difficult to entice up-and-coming leaders into taking top spots when they open. Younger generations of leaders have grown up surrounded by workplace perks and out-of-the-box benefits. This is particularly true for women. As organizations have witnessed the gains of a woman at the helm, they have done more to attract female executives to their companies.
Drawing promising executives from outside the credit union community—a growing necessity—may require credit union hiring committees to stretch beyond their status quo compensation strategy. The lower that status quo, the more intense the stretch.
Female executives are especially susceptible to altruism
As our executive benefits team talks with credit union leaders, they have observed that women, especially, tend to put themselves last in line. The dedicated female executives who occupy credit union C-suites often prioritize outcomes for others, whether that’s colleagues, members or the cooperative as a whole.
Notably, the others-over-self mindset may increase the longer women are in their positions. Researchers are looking into the idea that humans become more altruistic as they get older.
Bringing funding solutions to the table to remove mental block
From liquidity crunches and regulatory pressures to an active M&A environment, credit union CEOs and other executives are confronting immense pressure across a range of disruptive forces. The ultra-benevolent among them may be hamstrung by the idea that their compensation could negatively impact the budget.
To account for this belief, credit unions may consider bringing benefits-funding ideas to the table when considering options with executives. There are many creative—and in fact, financially beneficial—ways to make executive benefits affordable for credit unions. When leaders are freed from the mental block of “taking” from the credit union, the credit union itself is freed from the potential setbacks of inadequate executive compensation.
Opal Tomashevska is director of multicultural business strategy for TruStage. Kwame Smith is executive benefits specialist for Cuna Mutual Group Executive Benefit Solutions. They can be reached at Opal.Tomashevska@trustage.com and Kwame.Smith@cunamutual.com.
