Executive Compensation at the American Bankers Association (ABA) 2021

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 $140 million annually, typically spends less than it brings in, and has accumulated $121 million in net assets.

In 2021, the ABA reported total revenue of $141 million (compared to $136 million in 2020, $135 million in 2019 and $121 million in 2018), most of which came from dues ($43 million), royalties ($36 million), training ($15 million), gains and investment income ($28 million) and conferences ($6 million).

Expenses totaled $106 million during the same period with the 5 largest expenses reported to be compensation ($66 million), fees for services ($13 million), office-related expenses ($14 million), travel and conferences ($3 million), and advertising ($5 million).  The ABA spent $35 million less than the organization collected, and after adding about $30 million in net unrealized gains on investments and pension related changes, net assets totaled $121 million at year-end (compared to $57 million at the beginning of the year).

In 2021, 390 employees were compensated $66 million, which equates to an average compensation of $169,000. However, only 199 employees received more than $100,000 in compensation which means there were some very highly compensated people in ABA.

The 16 most highly compensated employees were compensated more than $15 million:

• $4,832,923:  Rob Nichols, President and CEO
• $2,268,860:  James Ballentine, EVP
• $1,011,554:  James Edrington, EVP  
• $  901,981:  Naomi Camper, Chief Policy Officer
• $  826,440:  Jim Chessen, EVP
• $  709,966:  Kenneth Clayton, EVP
• $  679,180:  Dawn Causey, General Counsel
• $  663,428:  Jess Sharp, EVP
• $  614,156:  Peter Cook, Chief Communication Officer
• $  564,542:  Alethia, Baggett, Chief HR Officer
• $  527,587:  Karin Petersen Flynn, CFO
• $  521,858:  Robert Schmermund, EVP
• $  426,909:  Robert G Eady, CFO (thru 8/19)
• $  408,274:  Wayne Abernathy, EVP. (thru 3/2/20
• $  232,380:  Jeffrey Owen, Former COO
• $  214,613:  Robert R Davis, EVP (thru 3/2/20)

As illustrated above, 12 of the 16 most highly compensated employees (75%) are male while 4 of the 16 (or 25%) are female.

The 4 most highly compensated employees received $31 million in compensation from 2017-2021:

Rob Nichols:  Total Compensation 2017-2021:  $16 million

• 2021:  $4,832,923
• 2020:  $3,271,038
• 2019:  $3,145,960
• 2018:  $2,785,380
• 2017:  $2,430,683

James Edrington:  Total Compensation 2017-2021:  $5 million

• 2021:  $1,011,554
• 2020: $1,393,776:
• 2019:  $1,178,049
• 2018:  $  716,321
• 2017:  $  617,381

James Ballentine:  Total Compensation 2017-2021:  $6 million

• 2021:  $2,268,860
• 2020: $1,265,549
• 2019:  $1,254,040
• 2018:  $  654,212
• 2017:  $  633,696

Kenneth Clayton:  Total Compensation 2017-2021:  $4 million

• 2021:  $  709,966
• 2020: $1,117,094
• 2019:  $1,162,118
• 2018:  $  576,716
• 2017:  $  625,704

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 non-qualified 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).  See the Form 990, Schedule J, Part III, Supplemental Information for details.

A gross up of 12.5% of the taxable amount of the SERP is paid to the executives.

The bottom line is that if you’re paying membership dues or fees to the ABA, a large portion of your money (about 75%) goes towards supporting the staff of the organization (including more than a dozen well compensated employees), consultants, advertising, office-related expenses along with first class travel, companion travel, retirement benefits, gross up payments, and social club dues and/or initiation dues.  About 25% was added to savings (the general fund).

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

• $1,831,011:  Revolution Agency (marketing strategy firm) of Alexandria, VA
• $  946,966:  Amedia, of Bethesda, MD for consulting
• $  930,462:  Confluence Gobal, of Annandale, VA for consulting
• $  723,798:  Orrick Herrington & Sutcliffe, of Chicago, IL for legal
• $  700,000:  The Orange Agency (public affairs advertising), of Alexandria, CA for consulting

To read the IRS Form 990 (2020 for the year ending August 30, 2021), click here.