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Informational Memorandum
Subject:Annual Adjustment of Maximum Director Compensation for 1998
Date of Memorandum:02/06/1998
Expiration Date:
Office:OPA
Signed By:McKenzie, Thomas
FCA Contact Person:Dunn, William
Contact Phone:703-883-4489
List of Attachments:

INFORMATIONAL MEMORANDUM



February 6, 1998



To: Chairman, Board of Directors
Chief Executive Officer
All Farm Credit Banks

From: Thomas G. McKenzie, Director
Office of Policy and Analysis

Subject: Annual Adjustment of Maximum Director Compensation for 1998


Section 4.21 of the Farm Credit Act, as amended, and FCA regulation at 611.400 require annual adjustments in Farm Credit System (FCS) Bank The six FCBs, CoBank, and the St. Paul Bank for Cooperatives. directors maximum annual compensation to reflect changes in the Consumer Price Index (CPI). The adjustment used is the annual percentage change in the CPI.

Annual percentage change = (most recent full-year CPI - prior year CPI) * 100
prior year CPI

The percentage change in the CPI for 1997 compared with 1996 was:

1. Most recent full-year CPI = annual average 1997 index of consumer prices Based on the Consumer Price Index for all Urban Consumers (CPI-U) for the U.S. City Average for All Items, 1982-84 = 100. Unadjusted series CUUR0000SA0, U.S. Bureau of Labor Statistics. = 160.5
2. Prior year CPI = annual average 1996 index of consumer prices = 156.9
3. Annual percentage change = ((160.5-156.9)/156.9)*100 = 2.2945 percent

The maximum compensation payable to FCS Bank directors in 1998 is $22,990. 1996 director compensation maximum of $22,474 * 2.2945 percent, rounded = $516 increase.

If you have any questions regarding the annual adjustment process, please call William Dunn, Risk Analysis Division, (703) 883-4455.

Copy to: Each FCS institution