Executive Compensation at the American Bankers Association (ABA) 2020

The American Bankers Association (ABA) 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 tax-exempt 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 $135 annually, typically spends less than it brings in, and has accumulated nearly $60 million in net assets. (although net assets would be significant higher if not for a $35 million downward adjustment because of underfunded pension requirements in 2019).

In 2020, the ABA reported total revenue of $136 million (compared to $135 million in 2019 and  $121 million in 2018), most of which came from dues ($48 million), royalties ($42 million), training ($10 million), gains and investment income ($15 million) and conferences ($8 million).

Expenses totaled $120 million during the same period with the 5 largest expenses reported to be compensation ($79 million), fees for services ($16 million), office-related expenses ($12 million), travel and conferences ($10 million), and advertising ($4 million).  The ABA spent $15 million less than the organization collected, and after deducting $4 million in net unrealized losses on investments, net assets totaled $57 million at year-end (compared to $47 million at the beginning of the year).

In 2020, 414 employees were compensated $79 million, which equates to an average compensation of $169,000. However, only 215 employees received more than $100,000 in compensation which means there were some very highly compensated people in ABA.

The 14 most highly compensated employees were compensated more than $16 million:

• $3,271,038:  Rob Nichols, President and CEO
• $1,509,501:  Wayne Abernathy, EVP
• $1,393,776:  James Edrington, EVP  
• $1,265,549:  James Ballentine, EVP
• $1,117,094:  Kenneth Clayton, EVP
• $  991,384:  Dawn Causey, General Counsel
• $  877,287:  Naomi Camper, Chief Policy Officer
• $  839,387:  Robert G Eady, CFO (thru 8/19)
• $  723,806:  Robert R Davis, EVP
• $  594,940:  Peter Cook, Chief Communication Officer
• $  559,584:  Alethia, Baggett, Chief HR Officer
• $  556,184:  Robert Schmermund, EVP
• $  519,214:  Jim Chessen, EVP
• $  362,480:  Jeffrey Owen, Former COO

As illustrated above, 11 of the 14 most highly compensated employees (79%) are male while 3 of the 14 (or 21%) are female.

The most highly compensated employee is Rob Nichols, the President and CEO who received $3,271,038 in 2020, and nearly $12 million in compensation over the past 4 years:

• 2020:  $3,271,038
• 2019:  $3,145,960
• 2018:  $2,735,380
• 2017:  $2,430,683

The IRS Form 990 also reports the following information:

The ABA paid 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 (note the ABA year begins September 1 of one year and ends August 31st the following year):

• $610,800:  James Ballentine
• $396,718:  Kennth Clayton ($119,582 I 2019)
• $354,757 :  Dawn Causey ($28,243 in 2019)
• $308,215:  James Edrington $210,085 in 2019)
• $303,400:  Robert Nichols
• $273,669:  Robert Eady
• $243,737:  Wayne Abernathy ($238,963 in 2019)
• $ 27,600:  Peter Cook
• $ 23,500:  Alethia Baggett
• $ 35,349:  Robert Davis
• $ 20,685:  Robert Schmermund
• $ 57,500:     Naomi Camper

A gross up of 12.5% 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 70%) goes towards supporting the staff of the organization (including 14 well compensated employees), office-related expenses 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/fees were primarily spent on consultants.

44 independent contractors received more than $100,000 in compensation with the five (5) most highly compensated reported to be consultants:

• $683,340:  Covington and Burling, of Washington, DC for legal services
• $675,112:  Cogent Strategies LLC, of Washington, DC for consulting
• $550,656:  Amedia, of Bethesda, MD for consulting
• $521,915:  Production Resource Group, of Boston, MA for consulting
• $519,710:  Wolfe Street Partners, of Alexandria, VA for consulting

To read the IRS Form 990 (2019 for the year ending August 30, 2020), click here.