Editor’s Note: The following was shared by a credit union leader in response to the CU Daily’s ongoing coverage of mergers. It is being published here anonymously, but the author is known to the CU Daily. We welcome reader feedback at any time.
I read the CU Daily’s article on mergers; I’ve read every one of them. I’m glad the CU Daily does what it does, first and foremost.
As you probably know, the reason every merger statement is the same is for two basic reasons:
- 1: They were written by the same people. We all use consultants to do a merger to make sure they are done correctly and there are few of those.
- 2: They are written that way for the NCUA, not members.
I would venture a guess 90%+ of credit unions convey a much more detailed account to members who care, but there has to be a line in the sand for the sake of progress so things get accomplished.
Spectacular ROI
Our CU owners and members typically invest $5 for their ownership and typically receive $405 annually in reduced fees or increased interest. That’s a pretty spectacular ROI. I would say the credit unions are as much of an employee-owned business as anything else. All employees are members and owners and invest more of their time and effort than any other member does.
If a board gave an executive a $1 million retirement plan, who would complain? No one
But if they don’t, and for many reasons a merger takes place and executives are compensated, the CU Daily seems to take issue and think everyone else should, too.
Where’s the Reward?
When I took over my CU, the best year net income was approximately $2.5 million. Now, five years later it will exceed $5 million. We’ve given back to our members every year with new products and services. We’ve doubled donations to our communities, too.
What has the executive team received? A salary less than the 50% benchmark of other credit unions and a small bonus.
If those same executives were at a bank, the stock options would be worth a couple million, easily.
Other Perspectives
I get the CU Daily’s point–it’s fair–but I believe you are only highlighting one perspective. This is a complicated issue. Why are CU executives expected to do their job for an OK salary, a thank you, and for the greater good of exactly who and nothing more. They could have done the same thing in a for-profit business for their own personnel benefit and the benefit of the organization, but in credit union they have to sacrifice those things they could have provided for their family for the co-op model.
I was part of a merger the CU Daily seemed to criticize for upping the salary of a CEO of a failing small CU. He hadn’t been given a raise in years and had done the best he could, but the community and original SEG failed to support the efforts of the credit union.
The merger, so far, has saved the only financial institution for 45 miles in any direction.
Digging a Little Deeper
My only ask is that the CU Daily dig a little deeper and look at both sides of this subject.
It’s complicated, I don’t have the answer, but maybe with your platform and a more holistic view, we can find one together.
The CU Daily welcomes reader feedback. Please contact Frank J. Diekmann at [email protected].
One Response
This would almost be worth engaging with if the author had the backbone to attach their name to it. Instead we get an anonymous sermon full of consultant buzzwords and self-praise from someone who clearly wants applause without risk.
-Peter Bullard