Mike Beall, CXO, CU Strategic Planning
The most awkward conversation in most credit unions is executive compensation and getting the recipe right.
Boards of Directors often experience sticker shock. Candidates are trying to compete. The truth is, purpose alone isn’t the only philosophy on the table in looking to attract and retain top talent.
I have some thoughts to share on how boards and candidates can approach executive recruiting and compensation more effectively.
Compensation Is More Than Salary
Compensation as a single number is just one ingredient in a recipe. Base salary matters, of course, but it’s only one piece of a much larger picture. Total executive compensation includes incentive and bonus structures, supplemental executive retirement plans (SERPs), 457(b) and 457(f) deferred compensation arrangements, split-dollar life insurance, health and welfare benefits, severance provisions and increasingly perks tied to flexibility and work-life balance.
Deferred compensation tools allow credit unions to provide meaningful long-term retention incentives that vest over time, a powerful way to keep an executive committed through a multi-year strategic vision. For mission-driven credit unions trying to protect the investment they’ve made in CDFI capacity and community development infrastructure, these retention tools are strategic necessities.
Staying Current on Compensation Trends
Both boards and candidates need reliable, current data—and this is an area where credit unions have solid resources available.
Industry-specific compensation surveys are a good place to start. Organizations like America’s Credit Unions, CUES and others publish annual executive compensation surveys that break down pay by asset size, region and position. Specialized firms that focus on credit union and financial institution compensation provide even more granular benchmarking, including the full range of benefits and deferred compensation arrangements.
The elephant in the room: boards can’t treat a contract as a set-it-and-forget-it tool – they should review compensation data annually, not just when conducting a search. Compensation committees (if you don’t have one you should!) need to understand where their executives fall relative to the market on an ongoing basis. Life and the economy change! A valued executive is an asset to be protected and nurtured.
Candidates must do their homework before they walk into a negotiation. They are interviewing a board as much as they are being interviewed. Know your market value based on the credit union’s asset size, complexity and your specific experience. Understand the full spectrum of compensation tools available so you can negotiate intelligently across all of them, not just base pay. Ask for what you want before you start. Be in a conversation.
Don’t Overlook the Programs You’re Eligible For
Here’s something specific to mission-driven and CDFI credit unions that often gets missed: there are programs and funding sources that can support executive talent development and organizational capacity in ways that indirectly affect your ability to compete for leadership.
CDFI Technical Assistance grants, for example, can fund staff training and development. Some credit unions have used these resources to build internal leadership pipelines. State programs like California’s Cal IIP can supplement net assets and increase organizational capacity. While these funds aren’t typically used for direct executive compensation, they strengthen the overall financial position that makes competitive compensation sustainable.
Boards should understand the full landscape of programs their credit union qualifies for, because organizational health and compensation capacity are connected. Ensuring that credit unions leave no income stream out is crucial, and CDFI grants are an important supplement to income, helping weather loan losses and improve ROA. Candidates should ask about these programs too—they signal whether a credit union truly understands and invests in its mission-focused work.
The 50th Versus 75th Percentile Question
One of the most common questions I get from compensation committees is whether to target the 50th percentile (market median) or the 75th percentile for executive pay. There’s no universal answer, but several factors should drive the decision.
Target the median when you’re recruiting for a stable, well-functioning credit union with a deep bench, when the role doesn’t require highly specialized expertise, or when budget constraints are real and pressing. The median keeps you competitive without overextending.
Lean toward the 75th percentile when the stakes are higher. If you’re recruiting for a turnaround situation, if the role requires rare expertise or if you’re trying to lure a proven leader away from a comfortable position, you’ll likely need to pay above median. The same is true if your credit union operates in a high-cost market or competes for talent against larger institutions.
For mission-driven credit unions, I’d add this: the candidates who can simultaneously execute a sophisticated community development strategy AND deliver strong financial performance AND motivate a strong functional team are genuinely scarce. When you find someone who truly gets it, paying at or above the 75th percentile may be entirely justified. The cost of hiring the wrong leader far exceeds the premium of paying for the right one.
Candidates should understand this dynamic too. If you bring specialized expertise, such as CDFI experience or are multilingual, and have a track record of mission-aligned results, you have legitimate grounds to negotiate above median. Don’t undersell the value of expertise that few others possess.
Why This Matters for Both Sides
For boards, getting compensation right is about protecting your investment, your members and your mission. The wrong compensation strategy can put all of that at risk.
For candidates, understanding the full compensation picture means you can evaluate opportunities accurately and negotiate from a position of knowledge rather than hope.
The credit unions that thrive in community development markets are the ones that treat executive compensation as a strategic investment. They benchmark regularly, structure packages thoughtfully and understand that competing for transformational leadership requires more than appealing to purpose.
CU Strategic Planning helps credit unions navigate the full executive transition recruiting process, from planning to compensation negotiation and onboarding. If you’re thinking about a search, succession planning or simply want to understand where your compensation stands relative to market, let’s talk.