- November 4, 2021
Top bank executives, particularly when in bank launch mode, often say the composition of the board is a key factor in reaching early success.
The goal is to find people not just with capital, but who will be the bank’s biggest cheerleaders in the business community for the long-term.
Now bankers can add two more challenges to building a sustainable bank board: a succession plan for board members and finding board members who are tech-savvy. Those two qualifications, succession and tech, are the biggest challenges bankers face today with board composition, according to Bank Director’s 2018 Compensation Survey, at 45% and 44%, respectively. The survey of bank CEOs, human resource officers and board members also looks at proxy statements to analyze compensation factors. Compensation Advisors, with the Meyer-Chatfield Group, sponsored the survey.
A lingering issue among board composition, the survey found, is diversity — from women to ethnicity to age. For starters, 35% of respondents cite the recruitment of female directors as a top board challenge. And while 77% of survey respondents indicate their board has at least one woman, up from 66% last year, a mere 14% say they have three or more women on their boards.
Other challenges in that area: More than three-fourths, 77% of respondents, report their board doesn’t have a “single ethnically diverse director.” Also, the survey found only 16% report having a bank director under the age of 40.
Other data points from the survey include:
• Commercial lenders are in high-demand, with 68% of respondents saying they are targeting that segment the most in employee recruitment in 2018, the survey shows. The next closest field bankers are actively recruiting for employees is technology, at 38%.
• Almost half, 47%, of respondents say their bank has increased salaries over the past three years to attract and retain younger talent. More than one-fourth, 27%, offer more equity compensation or profit sharing incentives to recruit and retain people;
• The median age of bank CEO is 58 years old. The median salary for CEOs in fiscal 2017 was $370,232, while total compensation, on average, was $621,000.