Findings from the Kehrer Group Survey of Compensation of Directors of Bank-Based Advisors
Women Directors earn substantially less than male Directors of investment services in financial institutions with similar experience, qualifications, and responsibilities. That is a disturbing finding from the Kehrer Group Director Compensation Study, released in November.
The study arrived at this conclusion by carefully analyzing the many factors that influence how directors are paid, using multiple regression analysis. For example, women directors tend to work in smaller firms, which naturally do not compensate their directors as much as larger firms. There are no women directors in the largest bank-based firms. Similarly, women directors are concentrated in credit unions, which are generally smaller than bank-based firms. But controlling for the size of the firm and institution, credit unions actually pay their directors more than bank-based directors with similar experience, qualifications, and responsibilities.
The analysis takes into account each director’s experience and tenure, size of the firm and the institution, and the firm’s performance, essentially enabling us to statistically compare advisors with the same qualifications and responsibilities by gender. Women directors are paid substantially less than similar male directors.
The statistical analysis explains 79% of the differences in total cash compensation across the 55 directors studied.
About The Kehrer Group Director Compensation Study
In response to many requests from the bank and credit union financial advice community, Kehrer Group conducted a survey of the compensation of the executives who manage the investment services business in their institutions. A total of 55 executives participated. They were asked to provide their compensation plan, their actual compensation for 2023, and details about their span of control, tenure, industry experience, professional designations, and more.
The titles of the positions covered varied widely, including CEO, President, Director of Wealth Management, and Program Manager. The job description included management of the advisor force directly, or through management of one or more sales managers, oversight of operations and compliance, and P&L responsibility to the institution.
We then matched the participating executives against data about their businesses and institutions from the 2023-2024 Kehrer Group Annual Benchmarking Survey. The resulting dataset supported sophisticated statistical analysis to understand the key drivers of compensation for the director role.
The study is available for $1,000 for firms with less than 25 advisors and for $2,000 for larger firms. Participants received the study with a 50% discount. For further information and to purchase the study, contact tim@kehrergroup.com