ABA Banking Journal - May 2013 - (Page 21)

Pass the asPirin ThE BaNkER-TO-BaNkER ExChaNgE The Headache: Compensation during changing times Much has changed over the last few years in regulatory attitude, etc., about pay. Has your bank made any significant changes to officer or employee compensation? How has it worked out? Add your answers to these by emailing to scocheo@sbpub.com Remedy 1: Board’s getting involved Frank Campbell, president and CEO, Pilgrim Bank, $171.4 millionassets, Cohasset, Mass. In recent years, our board has become more cognizant of the regulatory changes relating to compensation. The Compensation Committee initiated a project to revise the process and incorporate regulatory guidelines. They hired a consultant to help them develop policies and procedures as well as a new charter. They also revised the evaluation process for senior management. The next phase of the project will begin this year. The Committee plans to address short-term and long-term compensation by implementing specific measurements for senior management. Remedy 2: If it ain’t broke … Howard Jaffe, president and CEO, Inland Bank & Trust, $1.3 billionassets, Oakbrook, Ill. Ironically not much has changed with us in this regard. Our incentive plan is funded by a matrix of goals and objectives for the company. We have used that for about five years; everyone understands it, and that makes the overall process easier to understand. Remedy 3: Cash incentives for corporate officers Rudy Schupp, president and CEO, 1st United Bank, $1.6 billion-assets, West Palm Beach, Fla. In the compensation area we have long had performance-based compensation for lending teams, regional field managers, and so on. Recently we developed a cash incentive program for our senior corporate staff-oriented officers that revolves around achievement of consolidated earnings, net interest margin objectives, efficiency ratio, and examination outcomes. Headaches awaiting remedies When new Aspirin questions come up we post them in our ABA BJ Editors Report eletter. To subscribe, go to http://tinyurl.com/ ababjletters. To answer any of the questions below, please email to scocheo@sbpub.com • Lost income: This month’s ABA Community Banking department tells the story of a bank that discovered “lost” revenue in surprising places. Has your bank found some too? How and where? • Telecommuting: Has your bank tried permitting employees to work at home on a regular basis? Has that worked out? • Leadership: For banks under $1 billion in assets: What does your bank do to build more leadership ability internally? Remedy 4: Straight salary keeps right focus Thomas H. Pohlman, president & CEO, Ames (Iowa) National Corp., $1.2 billion-assets. “Customer First.” This philosophy permeates our organization. It also holds true with our compensation plan. None of our staff is paid on commission. From personal bankers and tellers to mortgage lending officers and commercial lenders, we have made a conscious decision to pay salary. Finding the right people for the right positions, focused on taking care of the customer and putting their needs first, is a core driver. Employees join knowing they will be working for a strong, stable organization dedicated to delivering the best service. By removing the commission-based mentality, the corporate culture becomes based on working together to effectively meet customer needs. Customers appreciate that what our employees do, the decisions they make, and the services they offer are truly in their best interest. This philosophy has served us well. The attitude that “we are all in this together” was an important part of maintaining a strong organization during a challenging economic time. We are very focused on communicating the customer-first expectation through service standards, mystery shopping programs, and recognition of outstanding service. If we do the right things daily to take care of customers and help to improve their financial situations, sales will follow. More about procrastination Our March column asked bankers how they stop procrastination. www.ababj.com/blog/5810.html Remedy 1: Set an example Marty Hansen, president and CEO, First State Bank, $41.1 million, Fairfax, Okla. Bank leadership has to set the tone, standards, and expectations. If the leader is seen as a procrastinator it will set a bad example for everyone else. The leader must be viewed as an individual who acts with a sense of urgency in their daily activities and sets and demands the same expectations for the team. may 2013 | ABA BANKING JOURNAL | 21 http://tinyurl.com/ababjletters http://tinyurl.com/ababjletters http://www.ababj.com/blog/5810.html

Table of Contents for the Digital Edition of ABA Banking Journal - May 2013

ABA Banking Journal - May 2013
Contents
Chairman’s View
Editor’s Column
The Economy
Bank Notes
Picture This
ABA Community Banking
Pass the Aspirin
Tech Topics
Looking for leaders
Top-performing mid-size banks
New world of appraisals
Compliance Clinic
Compliance Inbox
ABA At Your Service
First Person

ABA Banking Journal - May 2013

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