[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR611.400]



[Page 55-56]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 611_ORGANIZATION--Table of Contents

 

            Subpart D_Rules for Compensation of Board Members

 

Sec. 611.400  Compensation of bank board members.





    (a) Farm Credit System banks are authorized to pay fair and 

reasonable compensation to directors for services performed in an 

official capacity at a rate not to exceed the level established in 

section 4.21 of the Farm Credit Act of 1971, as amended, unless the FCA 

determines that such a level adversely affects the safety and soundness 

of the institution.

    (b) The bank director compensation level established in section 4.21 

of the Act shall be adjusted to reflect changes in the Consumer Price 

Index (CPI) for all urban consumers, as published by the Bureau of Labor 

Statistics, in the following manner: Current year's maximum compensation 

= Prior year's maximum compensation adjusted by the prior year's annual 

average percent change in the CPI for all urban consumers. Adjustments 

will be made to the bank director statutory compensation limit beginning 

from October 28, 1992 (the date of enactment of the Farm Credit Banks 

and Associations Safety and Soundness Act of 1992). Additionally, each 

year the FCA will distribute a bookletter to all FCS banks that 

communicates the CPI adjusted



[[Page 56]]



bank director statutory compensation limit.

    (c)(1) A Farm Credit bank is authorized to pay a director up to 30 

percent more than the statutory compensation limit in exceptional 

circumstances where the director contributes extraordinary time and 

effort in the service of the bank and its shareholders.

    (2) Banks must document the exceptional circumstances justifying 

additional director compensation. The documentation must describe:

    (i) The exceptional circumstances justifying the additional director 

compensation, including the extraordinary time and effort the director 

devoted to bank business; and

    (ii) The amount and the terms and conditions of the additional 

director compensation.

    (d) Each bank board shall adopt a written policy regarding 

compensation of bank directors. The policy shall address, at a minimum, 

the following areas:

    (1) The activities or functions for which attendance is necessary 

and appropriate and may be compensated, except that a Farm Credit System 

bank shall not compensate any director for rendering services on behalf 

of any other Farm Credit System institution or a cooperative of which 

the director is a member, or for performing other assignments of a non-

official nature;

    (2) The methodology for determining each director's rate of 

compensation; and

    (3) The exceptional circumstances under which the board would pay 

additional compensation for any of its directors as authorized by 

paragraph (c) of this section.

    (e) Directors may also be reimbursed for reasonable travel, 

subsistence, and other related expenses in accordance with the bank's 

policy.



[59 FR 37411, July 22, 1994, as amended at 64 FR 16618, Apr. 6, 1999; 65 

FR 8023, Feb. 17, 2000]