(Risk Level – LOW; Retention Level – LOW)
Perks generally are not a significant portion of the compensation portfolio, but do provide tools for client relationship management and help to maintain
the image of the banking institution. Country club memberships, hunting memberships, or the like are often important tools to help drive deep relationships with prospects and clients. It is important not to overlook the value some of these perks can provide despite the perception of some just being simply “luxury” perks within compensation.
Life insurance and other basics give the executive peace of mind. Additionally, supplemental insurance components such as disability and long term care are once again being seriously considered by a number of institutions, even if the executives must absorb a portion of the cost of these supplemental components (as supplemental components are typically portable should an executive terminate for any reason).
For the community banking industry rarely are perks going to cause a complication related to disclosures, with one exception: Tax Gross Up provisions. These remain out of favor with shareholders and regulators and should be carefully considered.