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 firstname.lastname@example.org
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
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
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
• 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
Remedy 4: Straight salary keeps
Thomas H. Pohlman,
president & CEO, Ames
(Iowa) National Corp.,
“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.
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.
ABA BANKING JOURNAL
Table of Contents for the Digital Edition of ABA Banking Journal - May 2013
ABA Banking Journal - May 2013
ABA Community Banking
Pass the Aspirin
Looking for leaders
Top-performing mid-size banks
New world of appraisals
ABA At Your Service
ABA Banking Journal - May 2013