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November 17, 2019

Executive Compensation at the American Bankers Association

by Anne Paddock

The American Bankers Association is a non-profit 501 (c) (6) organization – “a business league that pushes advocacy, provides education, products, and solutions to its membership and the financial services industry.” In other words, the ABA is a non-profit association for banks, savings and loans, and trust companies. Based in Washington, DC the ABA engages in lobbying, works to establish banking standards, and educates the public and its members.

While some people think of non-profits as almost an afterthought, the ABA is anything but insignificant. The ABA raises more than $100 annually, typically spends less than it brings in, and has accumulated more than $40 million in net assets. But, what is particularly startling is the compensation of executives.

In 2017, 398 employees were compensated $66 million, which equates to an average compensation of $166,300. However, only 173 employees received more than $100,000 in compensation which means there were some very highly compensated people in the organization.

The 12 most highly compensated employees were compensated $10.4 million:

  • $2,430,683:  Rob Nichols, President and CEO
  • $1,226,377:  Jeffrey Owen, COO
  • $  932,037:  Wayne Abernathy, EVP
  • $  726,130:  Dawn Causey, General Counsel
  • $  718,745:  Robert G Eady, CFO
  • $  633,696:  James Ballentine, EVP
  • $  625,704:  Kenneth Clayton, EVP
  • $  617,381:  James G Edrington, EVP
  • $  614,622:  Robert R Davis, EVP
  • $  602,616:  Christine Walika, EVP
  • $  584,400:  Robert Schmermund, EVP
  • $  566,597:  Paul C Katz, EVP

As illustrated above, 10 of the 12 most highly compensated employees (83%) are male while 2 of the 12 (or 17%) are female.

The IRS Form 990 also reports the following information:

Frank A Keating, II, the former President and CEO was compensated $101,096.

The ABA pays for first class travel. Certain officers of the organization (five in total) are allowed to fly first class and may bring a companion at their discretion.

The ABA pays for social club dues or initiation fees for business use.

The ABA provides a nonqualified supplemental employee retirement plan (SERP) and/or a supplemental life insurance plan with accrued present value benefits for the year:

  • $382,100:  Jeffrey Owen
  • $225,600:  Dawn Causey
  • $224,700:  Wayne Abernathy
  • $199,100:  Kenneth Clayton
  • $184,700:  Christine Walika
  • $180,500:  Rob S Nichols
  • $177,900:  Robert G Eady
  • $158,700:  James Edrington
  • $156,700:  James Ballentine
  • $156,200:  Paul C Katz
  • $ 26,400:  Robert R Davis
  • $ 19,800:  Robert Schmermund

A gross up of 12.25% of the taxable amount of the SERP is paid to the above executives.

The bottom line is that if you’re paying membership dues or fees to the ABA, a large portion of your money (about 60%) goes towards supporting the staff of the organization along with first class travel, companion travel, retirement benefits, gross up payments, and social club dues and/or initiation dues. The remainder of your dues were also spent on fees for services (16% for consultants, lobbyists, legal, investment fees) office-related expenses (approximately 12%), and travel and conferences (11%).

To read the IRS Form 990 (2016) for the year ending August 31, 2017), click here.

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