Membership Never Felt Dumber
Dean Christensen is Coast Central Credit Union’s million dollar man. Twice in 2011, his million dollar compensation package has been explained away in the North Coast Journal.
First, in the Journal’s February 17th issue, Heidi Walters explained how a report from the Orange County Register on CEO pay “missed the mark,” and “ran under the deceptively simple title ‘Credit unions lost money, execs made money.’” It was nothing but out-of-town journalists besmirching Humboldt’s finest… pay no attention.
Christensen’s salary made a second appearance in the Journal in September, when Walter‘s cover story “Giants of Nonprofit” put it in context by pointing out the “hundreds of thousands” in grants Coast Central makes to the community. Walter’s quoted Coast Central’s VP of Marketing, Dennis Hunter ($168,300 in 2009), who explained Christensen’s pay package ($1,001,700 in 2009) this way: “We kind of look at it as, we have $900 million in assets — we have to have someone qualified to run an organization like that.”
Well, Dennis Hunter makes a point! Let’s compare Coast Central with Provident Credit Union, another credit union about twice its size. Thanks to a law requiring credit unions to list the compensation of everyone making more than $100,000, and thanks to the wonderful non-profit-watch outfit GuideStar, such comparisons can be pretty easy.
Provident has 93,000 members to Coast Central’s 53,000. Its total assets and total liabilities are both about twice those of Coast Central’s and it has 290 employees to Coast Central’s 175. It pays 15 people more than $100,000 while Coast Central only has eight people getting more than $100,000. Provident’s headquarters is in Redwood City; Coast Central’s is in Eureka.
We’ll compare savings and checking account rates in a moment, but first let’s look at the CEO pay packages. Provident reported $711,000 in 2009 compensation to CEO Wayne Bunker. Coast Central? $1,001,000 to CEO Dean Christensen. Maybe it’s due to the high cost of living in Eureka compared to the Bay Area.
Hmmm. Onward to checking account rates. Provident pays 2.26% on up to $25,000 in its Super Reward Checking. Coast Central? Looks like they pay 0.10%. Provident pays its members 22 times as much.
Savings? Provident and Coast Central rates are about equal, but why would you put your savings in a term deposit paying 0.4% when you could have it earn 2.26% in checking?
What about mortgage rates? Provident’s at about 4%, Coast Central, 4.55%. Coast Central charges you more for a mortgage loan.
How do you feel about women in top management? Of Provident’s 15 employees paid more than $100,000 in 2009, seven were women. Of Coast Central’s eight, only one. (You could probably guess this: she’s in charge of Human Resources. But would you guess she makes only half of what Provident’s Vice President for Human Resources makes?)
It’s absolutely true that managing an institution with more than 100 employees requires competence and deserves reasonable compensation. But the idea of a non-profit is to contribute to the society that has granted it non-profit status, not just to be almost as competitive as the non-profit and for-profit outfits you supposedly replace.
Coast Central has grown under Christensen’s leadership. But here’s a nagging question: if you are not offering your members a deal anywhere near as good as larger credit unions, why should anyone be happy that you’re growing? If your CEO makes $300,000 more each year than the CEO of a credit union twice your size, yet you brag about giving away $20,000 here and $10,000 there, why should anyone be happy that you’re growing?
The answer, both times, is “you shouldn’t be happy.” Unless, of course, your last name is Christensen.