Bank Director and Meyer Chatfield Compensation Advisors released results to their compensation survey last week, and I was struck by the fact that community bank directors are working harder – yet paid less – than their big bank counterparts. Amidst news that JP Morgan’s Jamie Dimon, at $23.1 million, is America’s highest-paid banker – in the midst of an uncertain economy and public perception that the rich get richer, and bankers are the richest of the lot – low director pay to the average American may prompt them to play the world’s saddest song on the world’s smallest violin. But how high is too high – and more important too community bankers, how low is too low?
It’s risky to be a director. Everyone – from shareholders to regulators to the general public – has their eye on the banking industry these days, and the government increasingly wants community banks to play in the same sandbox as the big banks, despite a lack of resources. Per Meyer Chatfield’s Flynt Gallagher, community bank directors work longer hours to make up “for limited resources to fulfill fiduciary and oversight duties, while at the same time trying to meet shareholder expectations and ensure regulatory compliance.” Add into that the risk and liability of potential FDIC lawsuits should the bank fail – it’s something that a potential director will take into account. In fact, liability and potential growth are more important to the board members surveyed than the compensation and benefits package.
So, community bankers – how low is too low?
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