Board unanimously recommends putting it to a member vote
The Director Compensation Task Force, drawn from Coast Capital’s 504,000 members, has finished reviewing the credit union’s compensation model for its Board of Directors and recommended a new philosophy be considered by members.
“The membership of Coast Capital Savings recognizes the importance of attracting and retaining a high quality and dedicated board of directors,” the Task Force members wrote in their report. “Our directors must have the experience, skills and credentials required to develop and achieve Coast Capital Savings’ strategic plan. We must, therefore, offer a level of remuneration that both reflects our cooperative heritage and makes us competitive in the marketplace.”
The Task Force’s recommendation is to revise the current Director Compensation Philosophy and make compensation proportional to a peer group of Canadian financial services institutions of similar size and complexity, including credit unions, trust companies, banks and insurance companies.
“Our motivation for constructing our recommendations in this manner is to ensure the philosophy aligns with best practice, is clear and more easily communicated to members, that it is representative of today’s marketplace and provides a consistent peer group for comparison,” the Task Force members reported.
The Task Force reached their recommendations after listening to numerous presentations, conducting individual research and analysis, exchanging numerous emails, plus deliberating together for six meetings. They also reviewed more than 1,000 pages of studies and other material.
“Through this process, we have come to understand the important role the Board of Directors has in running a multi-billion dollar organization,” the Task Force members reported. “The BC credit union regulator is mandating an increased quality of boards of directors through the implementation of the 2013 Governance Standards. These governance guidelines have helped us to understand the role and importance of having a talented Board of Directors, able to ensure the safety, stability and sustainability of its credit union.”
The Task Force set out several steps to take in applying the new philosophy, including a review of specific director remuneration by members and a compensation consultant every three years, and a review of the overall philosophy by the Board and members within seven years. They also recommended the Board advise members of the identity and selection rationale for the peer group by which their compensation will be compared.
Coast Capital’s Board of Directors has reviewed the recommendations of the Task Force, and will put them to the full membership for a vote from March 14 - April 8, 2014.
“We promised members that an independent, member-driven task force would examine Director Compensation and recommend whether changes are needed,” said Bill Wellburn, Board Chair. “Every Coast Capital member was invited to apply to the Task Force, and we believe they represent the interests of our 504,000 members. Now those members will have the final say in a vote this spring.”
The Task Force was assisted by Delaney and Associates, a third-party facilitator that operated independent of the Coast Capital Board. The Task Force members were selected specifically to ensure a cross section of the credit union’s membership was represented, in terms of where they live, gender, age and experience.
“We were fortunate to have a highly skilled, highly engaged group of members volunteer to do this important work,” said Wellburn. “We believe they understand our credit union values and the value of membership – among them, they have 132 years of membership with Coast Capital Savings. We thank them for their hard work and thoughtful consideration of a large volume of information. They have shown a deep commitment to the good governance of their credit union.”
Learn more about the Director Compensation Task Force.
Read the full Director Compensation Task Force report .