As the Industry's CEOs Get Older, Banks Describe Plans to Develop Senior-Level Talent

Jackie Stewart

Executive Editor

Greg Hodges got his start in banking through an unusual career path. Years ago, he visited a bank while selling copiers, and he ended up with a job offer to work in the institution’s leasing division. 

“I had to learn banking on the fly,” says Hodges, who is now chief banking officer at Merchants & Marine Bancorp in Pascagoula, Mississippi. But it also taught him the value of looking for talented employees throughout the bank and even outside of it. “Leaders can come from all kinds of backgrounds,” he adds. “If they have a curiosity, if they want to serve people, if they want to continue to learn more, they can be a great leader. We’ve had people who moved up from tellers and back-office positions.” 

It’s a lesson that many in the banking industry should take to heart. Banks should be looking to develop internal high-potential talent for a few reasons, including the need for a succession plan. Twenty-eight percent of respondents to Bank Director’s 2025 Compensation & Talent Survey said their CEO would retire in the next two to five years. Forty-four percent of CEOs said they were at least 61 years old, according to the survey. 

But it also goes beyond that. Offering a career path for desirable staff members is a way to attract younger employees, build a leadership pipeline and ensure the institution’s success. 

“One of the most valuable retention tools for companies in general and certainly for banks is employee development and offering opportunities, particularly for newer generations,” says Alan Kaplan, founder and CEO of Kaplan Partners, an executive search firm. “They want to feel that someone is thinking about them and their career.” 

When it comes to developing talent, much focus is paid to the C-suite and ensuring there is a succession plan in place for these individuals. There are numerous ways that banks strengthen their talent for upper management roles. For instance, almost three-quarters of respondents to Bank Director’s 2025 Compensation & Talent Survey said their bank would likely offer coaching and/or mentorship programs for employees over the next three years to strengthen its bench of talent for executive and C-suite roles.

Kaplan is a big believer in providing coaching to executives and high-potential leaders who are being considered for the C-suite. That’s because being good in a subject matter area, such as commercial lending or understanding credit, is vastly different from leading a team. “The soft stuff is the hard stuff,” he adds. “All of a sudden you have to make presentations to the board. All of a sudden you have a bigger role in the community. All of a sudden you will be managing people who were your peers. Getting third-party external support can help.” 

Besides providing coaching, 53% of bank leaders in the Bank Director survey said they were likely to provide external career development and/or tuition reimbursement for mid-level internal talent, and 40% said they would offer special projects or rotational work for high-potential candidates. Fifty-two percent expect to hire external talent in their markets. 

The $948 million Merchants & Marine Bank offers the Odyssey Program for its high-potential individuals, Hodges says. The program includes in-person training from internal and external experts on topics ranging from effective communication to inspiring others to defining the participants’ leadership style. Participants are also connected with a mentor who does monthly check ins, and alums of the program will get together regularly to continue building their connection. 

Hodges’s goal is to promote current employees at Merchants & Marine. “I am a big believer in … the best team member is the one you have already hired,” he adds. “People may say the grass is greener and they can find someone who can save the day but typically the best team members are the ones developed over time.” 

Ensuring there is a succession plan for the CEO is where directors have the most significant direct role in overseeing talent within the bank, experts say. “Their No. 1 job is to hire and fire the CEO. That’s a no brainer,” says Peter Thies, managing director at Pearl Meyer & Partners, an executive compensation advisory and consulting firm. “They should be on top of that, even if the CEO plans to be around for several years. It is never too soon to start succession planning.” 

But developing high potential talent must go beyond the upper most ranks of management and be considered throughout the entire organization. That’s because the bank needs employees at all levels to perform well, cultivating customer relationships and boosting the bottom line. Early and mid-career staff members are an important pool to draw from to ensure a smooth transition as leaders leave the organization or are promoted to their next role. “Your next CEO could be one of your star tellers or could be a financial analyst buried way back in the back office,” Thies adds. 

Ensuring that high-potential employees are being retained lower in the organization falls more to the bank’s management team, especially a chief human resources officer, says Mika Moser, founder and CEO of At C Level, a leadership development and executive search firm. But it is still the board’s role to support a culture that values cultivating talent and ensuring there are the necessary resources and opportunities for that. 

Camden National Bank in Camden, Maine, provides free online education for all employees who are looking to bolster their skills, earn additional certificates and advance, says Carolyn Crosby, senior vice president of human resources at $7 billion Camden, which is a subsidiary of Camden National Corp. Formal career development planning is available to all workers through its human resources information system. 

Those selected for one of its three leadership development programs — each program focuses on leaders at a different stage of their career — also receive career development planning and mentoring. There is a nomination process for these programs from managers and senior leaders, though individuals can also nominate themselves, and then individuals are selected based on factors such as the certificates they hold and annual reviews.  

An important step throughout this process is determining whether a high-potential employee wants to be a leader and has those necessary skills. Research from Gallup has found that about 10% of employees possess the natural ability to manage. “In sports, every great athlete is not a great coach,” says Julie Bell, who leads the leadership advisory practice at executive search firm Chartwell Partners. “That’s a good example.” 

If a high-achieving employee doesn’t have the skills or the desire to be in a leadership role, the institution can keep them engaged by offering other challenging opportunities that don’t necessarily require overseeing a team. For instance, management can tap these individuals to serve as mentors, or they could be involved with new projects. “Not everyone is going to be a leader,” Moser says. “Make sure you are pouring into them and let them stretch and grow. You can lead without leading people.” 

Finally, it’s important for the bank to measure how successfully it is in retaining its high achievers. One metric to consider would be not just employee turnover, but turnover of staff members the bank has identified as top talent. Camden National considers top performers as those who received a rating of exceeds expectations or outstanding performance during their annual performance review. The bank then tracks its turnover of these individuals on a dashboard in Workday, a human resources management software. Its goal is to keep that under 3% each year, and the board is updated on this. 

Overall, good management of high-potential employees is an imperative for all banks. “I’ve seen some big banks and small banks do it very well,” Bell says. “If your market doesn’t have a large talent pool, then it is even more important for you because of the retention piece of it. If you get someone and they are great, keep them.”