A group of disgruntled Coast Capital Savings members is taking issue with how much the country’s second-largest credit union is compensating its board members — saying the totals have to be drastically reduced to align with its rival Vancity.
Remuneration for the 10-member Coast Capital board during the 2011-2012 fiscal year was $750,517, more than double what Vancity, Canada’s largest credit union, paid its board over the same period.
Coast Capital chairman Bill Wellburn of Victoria received $164,140, according to the credit union’s website. That was well above the compensation of Vancity chairwoman Virginia Weiler, who received $60,780 in 2011-2012 and will earn $62,239 in 2012-2013.
Wellburn holds another high-profile chairmanship, leading the Greater Victoria Harbour Authority, where he earns an annual retainer of $10,000 and $400 per meeting.
Surrey resident Phil Embley is spearheading the campaign to revamp Coast Capital’s process of setting out payments. He argues too much money is going to the board, comparing Coast Capital figures with those of Vancity, where board remuneration for 2011-2012 comes to $366,380.
Embley has collected more than 400 signatures on a petition to hold a vote on members approving the remuneration rate and for that information to be more clear in the institution’s annual report. The vote runs March 22 to April 16. Coast Capital’s annual general meeting is April 30.
Support for the petition was generated by Embley, who said he spent $15,000 on advertising in 13 newspapers and in setting up a website called Coast Capital Compensation Watch.
The annual retainer paid to Coast’s chairman is $76,500 while directors receive $25,500, and committee chairs an additional $10,610. Fees are added when directors attend board and committee meetings, strategy sessions and other events.
“Traditionally, in co-ops, serving on a board has been looked upon as part community service. That’s the traditional way of doing it and I think that’s the way that other co-operatives run their board.
The current situation is “far out of line,” Embley said in a Wednesday release. The Financial Institutions Commission of B.C. (FICOM) has been asked to look into the matter.
“Dissident credit union members state that the remuneration their board is paying to itself is far in excess of any co-operative association in Canada,” the release said.
However, Glenn Wong, chairman of Coast Capital’s governance committee and a board member, said the board is not setting its own salaries. “This was all approved previously by over 80 per cent of the members that voted back in 2007.”
Members supported a compensation model with a combination of a basic retainer and meeting fees to reflect how busy directors were in a given year.
In 2006, a fixed amount was paid to the chair and directors. The chairperson at that time was compensated at a flat rate of just over $33,000.
Now, every three years, a consultant is hired to check the marketplace and ensure that compensation follows the approved philosophy, which says that “directors should be paid higher than the top 25 per cent of Canadian co-operatives, but lower than the bottom 25 per cent of TSX comparable companies,” Wong said.
Coast Capital is the largest credit union in Canada in terms of membership, with 504,000 members. It announced a record profit last year of $72.4 million. It has 50 branches and $14.6 billion in assets under administration.
Vancity reported a $57-million profit on Wednesday. It has $19.9 billion in assets under administration, almost 500,000 members and 57 branches.
While Wong did not want to speak to Vancity’s remuneration level, he said Coast Capital is the fastest growing credit union in Canada.
Since 2007 “our asset base has increased by over $3 billion and we have increased our membership by over 140,000.” He added the results show “whatever we are doing, our members are seeing the value in it. Part of that has been to make sure that we get a fully engaged, highly qualified board of directors.”
A 2012 report on credit union governance by the financial institutions commission recommends as a best practice almost exactly the what Coast Capital has been doing since 2007.
“We are following FICOM’s suggested guidelines,” Wong said, adding Wellburn puts in more than full-time hours, and has attended more than 80 meetings a year.
Vancity reviews its directors compensation every three years as well.
Members are asked to vote on compensation levels one year before the end of the three-year period. Annual increases come into effect if earning targets are reached. The increase is determined by the B.C. provincial consumer price index.