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Informational Memorandum
Subject:Maximum Bank Director Compensation for 2008
Date of Memorandum:02/01/2008
Expiration Date:
Office:Office of Regulatory Policy
Signed By:Jacob, Andrew
FCA Contact Person:Wilson, Michael
Contact Phone:703-883-4124
List of Attachments:Farm Credit Administration Summary of Annual Adjustments of Maximum Farm Credit System Bank Director Compensation

IM-MaximumBankDirectorComp2008.pdf

February 1, 2008


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

From: Andrew D. Jacob, Director
Office of Regulatory Policy

Subject: Maximum Bank Director Compensation for 2008


Section 4.21 of the Farm Credit Act of 1971, as amended, and Farm Credit Administration (FCA) regulation § 611.400 require an annual adjustment in the maximum annual compensation payable to Farm Credit System (FCS) bank1 directors to reflect the change in the Consumer Price Index (CPI). With the release of annual CPI data for 2007, the FCS bank director compensation maximum for 2008 changes accordingly.

The 2008 maximum is determined by the 2007 maximum plus the increase in the average CPI over the prior year as follows:

2008 Maximum Director Compensation = 2007 Maximum Director
Compensation x (2007 Annual Average CPI/2006 Annual Average CPI)

2007 Annual Average CPI2 = 207.342
2006 Annual Average CPI = 201.6
2008 Maximum Compensation = $48,815 x (207.342/201.6)
= $48,815 x 1.028482
= $50,2053

The maximum compensation payable to FCS bank directors in 2008 is $50,205.

By issuance of this informational Memorandum, the FCA rescinds the Informational Memorandum dated February 13, 2007, on the calculation of maximum bank director compensation.

If you have any questions regarding the annual adjustment process, please call Mike Wilson, Office of Regulatory Policy, (703) 883-4124, TTY (703) 883-4434, or contact him by e-mail at wilsonm@fca.gov.

Attachment

Copy to: Each FCS Institution

1The four Farm Credit Banks and CoBank, ACB.

2Based on the annual average Consumer Price Index for all Urban Consumers, U.S. City Average, All Items, 1982-84 = 100. Unadjusted series CUUR0000SA0, U.S. Bureau of Labor Statistics.

3Rounded to the nearest whole dollar.



Attachment
Farm Credit Administration
Summary of Annual Adjustments of Maximum
Farm Credit System Bank Director Compensation


Annual Annual CPI Maximum
Average Adjustment Bank Director
Year CPI1 Percentage Compensation

1997 160.5 1.029528 $22,474

1998 163.0 1.022945 $22,990

1999 166.6 1.015576 $23,348

2000 172.2 1.022086 $23,864

2001 177.1 1.033613 $24,666

2002 179.9 1.028455 $25,368

20032 184.0 1.015810 $25,769

20042 188.9 1.3178943 $26,3583

2005 195.3 1.3529903 $27,0603

2006 201.6 1.033880 $47,2904

2007 207.342 1.032258 $48,815

2008 1.028482 $50,205


1Based on the annual average Consumer Price Index (CPI) for all Urban Consumers, U.S. City Average, All Items, 1982-84 = 100. Unadjusted series CUUR0000SA0, US. Bureau of Labor Statistics.

2The annual adjustment for maximum director compensation for 2003 and 2004 were made via Bookletters BL-045, dated March 12, 2003, and BL-048, dated March 1, 2004, respectively.

3The maximum annual director compensation was determined by using the 1992 maximum compensation level at $20,000 times the percentage increase in the average CPI since October 1992, using the October 1992 effective annual average CPI: $20,000 x (184.0/139.6167) = $26,358 for 2004 and $20,000 x (188.9/139.6167) = $27,060 for 2005.

4Via its Bookletter BL-051, dated December 15, 2005, FCA authorized FCS banks to pay compensation for 2006 at a level not to exceed $45,740, plus the annual adjustment of inflation. The 2006 director compensation is calculated as follows: $45,740 x (195.3/188.9 = $47,290 (See Informational Memorandum, dated February 15, 2006 (Rescinded)).