CUNA’s van Rijn talks co-ops ‘by the numbers’ at conference
CUNA Senior Economist Jordan van Rijn addressed more than 300 co-op professionals Wednesday at the National Cooperative Business Association CLUSA International’ Co-Op IMPACT Conference. Van Rijn participated in a panel discussion on how cooperatives impact the economy.
During the discussion, van Rijn said one of CUNA’s primary missions is defending the cooperative credit union model against attacks from for-profit banks through research and statistics. In addition to a demonstrated commitment to financial literacy, he mentioned research into executive compensation.
At for-profit banks, executives have more of their compensation based on performance, growth and earnings metrics. But the cooperative credit union structure, he noted, naturally leads toward more pro-consumer outlooks.
CUNA’s research found that about 25% of bank CEO compensation is tied to performance, compared with 7% to 8% for credit unions.
“There’s much more performance-based compensation at banks. That tells us there is a different mission and a different structure,” van Rijn said. “It’s also important because there’s a lot of research that shows performance-based compensation is tied to a lot of bad behavior, looking for more short-term gains, more risk-taking, the kinds of things people say led to the financial crisis, to earnings manipulation.
“So we feel this is strong evidence to show that credit unions really do place a lot more emphasis on member outcomes, member satisfaction,” he added.
As the discussion shifted to how the cooperative model can lead increase equity in the economy for traditionally underrepresented groups, van Rijn cited statistics that show that while Fortune 500 companies and commercial banks have 5% to 6% female CEOs, credit unions have 52% female CEOs.
When asked how the cooperative model can find success, particularly in an evolving economy, van Rijn said cooperatives of all kinds should look to secure a place at the table with all kinds of policymakers.
“We need to get more people out there as thought leaders, to emphasize what are the benefits of the cooperative model,” he said. “I think in that way we’ll bring it to more policy discussions, to move it beyond just talking amongst ourselves, but taking the co-op model to other places, universities, governments, into real policy discussions, I think that will be really important moving forward.”