Servus Credit Union Ltd. announced Friday its president and CEO will retire at the end of the month, only weeks after the organization defended his $3.6-million bonus.
Steve Blakely was paid $4.1 million, including the bonus, in 2008 after leading a merger of Red Deer-based Community Savings and Lloydminster-based Common Wealth Credit Union.
Servus board chairman Bill Anhorn defended the payments last month, saying Blakely was contractually entitled to the money, which recognized that he could have lost his job during amalgamation and been entitled to severance pay. A portion of the bonus served as a retention payment.
Servus chief operating officer Garth Warner was appointed president and CEO of the Edmonton-based credit union, effective Friday.
Anhorn said on Friday that the bonus flap, which was criticized by some credit union members, was among considerations when the board and Blakely discussed his future plans earlier this week.
“I wouldn’t say it wasn’t a factor,” he said. The decision to retire was mutual.
Blakely will not be required to return any of the money he was paid, including the bonus.
Blakely will receive no severance. But he is entitled to receive all compensation and benefits due him until his retirement, which is effective April 30.
Anhorn praised the departing CEO for his handling of the merger, which was finalized last Nov. 1.
“I want to recognize Mr. Blakely’s tremendous contribution. He had tremendous leadership, great vision.”
While corporate executive compensation has become a hot topic in business circles because of the financial meltdown in the U.S., Anhorn said it is important not to lose sight of Servus’s vision and recent accomplishments.
Anhorn believes credit union members will support the organization’s recent direction. “I think they will view it as a positive thing.”
Warner has a 28-year history with Servus and has been very close to operations as an executive.
“The company is positioned well to go forward under Mr. Warner.”
Servus is owned by its 400,000 members and operates a network of 100 locations in 63 Alberta communities.