Best practices for negotiating SERPs
Boards should explore this tool as a means of rewarding and retaining executives.
For a credit union to reach its strategic goals, leadership continuity is imperative.
Creating a strong financial tie between top executives and the credit union will facilitate your succession plan, and effective negotiation of executives’ compensation is a critical component to binding this relationship. It’s a balancing act between the credit union’s needs and those of its key leaders.
To begin negotiations with a current executive, start by looking at when your CEO expects to retire and ask about his or her goals. You should also prepare for an unexpected departure, especially if the CEO’s base compensation package is lower than that of peer credit union executives. Loyalty counts, but often not enough to turn down an attractive offer with a pay increase.
For this reason, it’s essential to regularly benchmark your base compensation packages against peer credit union data through a tool such as CUNA’s Compensation Analytics, comparing geographic location, asset size, and even field of membership.
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