Bank earnings are down, but the salaries of Bay State bank chiefs are going up this year – and at a rate more than twice what other bank employees are making.

That’s the conclusion of new report commissioned by the Massachusetts Bankers Association. Unveiled to members last week, the survey included financials from 126 banks and credit unions.

Bank CEOs in Massachusetts earn base pay of anywhere from $150,000 at the smallest banks to more than $450,000 for running institutions over $1 billion in assets. That base pay is rising an average of 6 percent this year, while the pay for bank chief financial officers is moving up an average of 8 percent.

The base pay for teller level employees is expected to increase just 3.5 percent, the bankers said.

Bank executives argue, though, that their bonus pay and incentives have shrunk substantially, especially at banks of more than $5 billion in asset size. That means that actual take-home pay is shrinking for senior management.

“The key takeaway is that base salaries are continuing to move modestly, [although] some of the CEOs did get more,” said Susan O’Donnell, managing director at Southborough compensation consultants Pearl Meyer & Partners, which conducted the survey.

Rising health insurance costs could eat up a big portion of even the largest raises, depending on how much of those costs the bank assumes, added Marie Lodi, senior vice president for human resources at Cambridge Savings Bank.

The 126 institutions surveyed included about five Massachusetts credit unions and four or five Rhode Island banks, O’Donnell said. The surveys were conducted in April, she said, noting that she’s seeing banks taking a “more conservative” view in the months since.

Danversbank President and CEO Kevin Bottomley said Danversbank’s experience squares with the averages.

“I suppose [chief executive increases] have been at 5 to 7 percent,” he said, and all others in the 3 percent to 3.5 percent range.

Ups And Downs

But, he said, he doesn’t think such a scenario is always the case at his or other banks.

“We actually had a salary freeze last year for all officers, because we hadn’t performed as well as we wanted to,” said Bottomley, whose bank converted from mutual to stock-owned in January.

He said when the bank was mutually owned, and used the MBA survey for salary comparisons, most banks’ base salary ranges were pretty similar.

“I think the trend is certainly more towards [compensation] being incentive driven,” he said.

O’Donnell agreed.

The survey shows that some Massachusetts banks having trouble funding incentive plans because of the economy and earnings troubles, she said.

Incentive pay, which is offered based on performance measures such as return on assets or equity and deposit and loan growth, was below the amount originally targeted at every bank over $5 billion in size that was surveyed. Eighteen percent of those banks paid no bonuses at all last year.

At banks between $1 billion and $5 billion in size, 62 percent paid below target and 8 percent paid no bonus, while at banks between $500 million and $1 billion in size, 36 percent paid bonuses below target and 9 percent, none at all.

It’s no small amount of money, either. In a normal year, O’Donnell said, the CEO of a $200 million bank earns a bonus of about 20 percent of his base salary. Chief executives at $1 billion banks earn roughly 30 percent, while those leading a $2.5 billion bank could earn up to 40 percent of their base pay in incentives.

“Those with more opportunity have the most to lose,” she explained.

Spanked By Fannie

Lodi said some local banks’ earnings could be affected based on the Sept. 7 announcement that the federal government had taken Fannie Mae and Freddie Mac into receivership.

Some Bay State banks owned stock in one or both of the agencies, whose stock price has plummeted to less than a dollar a share since the takeover.

“A lot of banks had invested in them and as a result may have someÂ…losses on those investments, which could affect the incentives they can pay,” Lodi said.

Cambridge Savings Bank invested in the stocks, but Lodi said that since its equity capital level is comfortable, she doesn’t see that scenario affecting her bank.

According to O’Donnell, a common concern bankers have raised concerns is the question of how they will continue to attract high-quality staff in today’s tough economy.

“A lot of the questions have been, ‘How do we reward people [given that] we are in a challenging business environment, and it doesn’t look like it’s going to get better anytime soon,'” she said.

In response, she said, “I’ve pointed out how important it is for banks to have a long-term view.

As long as bank officials are doing the best things to ensure a strong future of the bank as a whole, she said, attracting and retaining quality staff should be something they can achieve.