Average Credit Card Industry Executive Compensation Climbs 77% in 2004
Salaries and bonuses of credit card industry executives were up at most companies in 2004, but bonuses plus salaries actually declined as a percentage of total compensation from 2003 according to Cards&Payments, Source Media's magazine covering changes in the credit card industry.
The average compensation among the card industry executives investigated by Cards&Payments Magazine was $1.78 million, up about 77% from $1.01 million in 2003. The average executive salary was $410,770, up 11.3% from $369,000 in 2003. The average bonus for card-industry executives was $514,180, an 87.9% increase from $273,619 in 2003.
How executives are paid is changing in all industries, says Shekhar Purohit, a senior consultant with Chicago-based The Delves Group. Executive pay levels have been bouncing back in the last 12 to 18 months, he says, but the pay packages are different than they were a few years ago.
Mike Melbinger, head of executive compensation at Winson & Strawn in Chicago said:
"You have the MBNAs and Cap Ones, who are public and have people scrutinizing their compensation information, which is causing them to come a little bit toward the middle, while you also have the large financial-service providers who are now starting to pay their credit card division heads a little more."
Bonuses are related more to company performance than they were in the past. Although, when a company has a couple years of growth, the next average year can seem to be a lukewarm performance. This situation can cause a problem for card executives paid according to the numbers.
Susan Allard, president of Allard Associates, Inc., a San Francisco based executive search firm said:
Many boards are attaching bonuses to other standards, such as a greater emphasis on employee retention and internal management development, according to Daina Di Veto, managing director of Card Resource Group, a Lynden, Ontario executive search firm.
Stock options are not as desired as they once were, even at companies that showed gains. The uncertainty of the past few years has made executives unsure they will be with a company long enough to benefit from it, says Kathryn Trott, president of Woodlands, Calif.-based e-Trott Inc. Ms. Trott said:
More executives are taking jobs wanting assurance that their quality of life will be maintained in retirement. This trend is being attributed to the aging work force.
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