What commands higher compensation?
Quick quiz question: According to this year’s CUES Executive Compensation Survey, which has the greatest positive impact on executive compensation?
A) asset size of the employing credit union
B) an executive’s years of experience
C) an executive’s educational level
D) having the CCE designation
You’d be right if you said, “It’s complicated.”
Results from this year’s CUES Executive Compensation Survey show that a CEO with a doctorate generates a 21.3 percent premium when compared to CEOs whose highest level of education is a two-year degree or below, all else held equal. Additionally, having an MBA generates a 14.5 percent premium in total compensation, when compared to the same grouping of those with a two-year degree and below.
In addition, the survey finds that having CUES’ “Certified Chief Executive” designation equates to a premium of 6.4 percent of total compensation for the CEO position, holding all else equal. In fact, looking at the survey results, those with the designation are being paid more at every level than those without it.
Someone with CCE behind their name (more than 500 people have earned the designation) has completed all three segments of CUES’ CEO Institute plus two between-segment projects. It often also means that the person has become part of a cohort of classmates who went through the program together, forming a talented, highly educated network with real value to executives and their credit unions.
Asset size and years of experience also have an impact on executive compensation. According to this year’s survey, a CEO working at a credit union that’s 1 percent larger typically makes 0.4 percent more in total compensation. And, an additional year of experience for the CEO translates typically to an additional 0.8 percent in total compensation.
The measurable impact of the CCE designation on compensation makes sense to me. Credit unions have recognized the designation’s importance, as demonstrated by how full our CEO Institutes have been this year. (To allow more executives to attend, we offered the first-ever summer CEO Institute I at the University of Pennsylvania’s Wharton School last month.)
The designation promises to continue to be valuable because institute content is kept fresh and current. Last month’s CEO Institute I featured an almost-entirely new set of faculty presenters, and attendees raved about the quality of their teachers—and the relevance of the topics covered.
But CUES can’t rest on its laurels. The first-ever Strategic Innovation Institute I will be held later this month at MIT. Strategic Innovation Institute II will be held next fall at Stanford University. And a new designation for graduates of both segments is planned. In a few years, we’ll likely be looking to collect data on how that designation impacts executives’ compensation.
Credit union executives can’t rest on their laurels, either. Clearly, just working for a larger credit union or boasting many years of experience is no longer enough to earn executives top dollar for their good work. I expect that having a great education under your belt—whether that’s a graduate degree or a CCE—will continue to be a top factor when a board selects and compensates a new CEO—or a CEO chooses the next member of the senior leadership team. CUES is here to help you realize your potential.
