Governor praises Bank of North Dakota employee bonus program
BISMARCK, N.D. (North Dakota Monitor) — State officials have approved new staff performance bonuses to improve retention at the Bank of North Dakota, with the first installment totaling about $772,000.
The North Dakota Industrial Commission, which oversees the state-owned bank, unanimously approved the payout during its Feb. 24 meeting. Employee bonuses have been under the microscope after several bonuses exceeding $100,000 were awarded to employees of another state agency earlier this year.
“As the chair of two committees that have two different bonus plans, I like this one a lot better,” Gov. Kelly Armstrong said during a meeting of the Industrial Commission last week. “The benefits to this is we are competing with private sector, and it’s a way to keep base salaries in line.”
Armstrong also chairs the State Investment Board, responsible for investing state funds like the Legacy Fund, which approved $1.3 million in bonuses for 12 employees of the Retirement and Investment Office in January. Armstrong voted in favor of that bonus pay, despite pushback from some lawmakers who asked the attorney general to issue an opinion on some legal questions.
The Bank of North Dakota’s 2025 bonuses will pay up to $2.1 million to 167 employees over the course of the next three years. Each qualifying employee is eligible for a bonus equal to 14.25% of their 2025 base salary.
“We wanted it to be motivating as one team to all Bank of North Dakota staff,” said Don Morgan, bank CEO. “So we made the payout percentage the same for everybody in the organization, whether you’re the CEO or down on the teller line or our janitorial staff.”
A third of the bonus for 2025 performance, totaling $705,000 and averaging $4,200 per person, is being paid out now. The employees will receive identical payments in 2027 and 2028, if they are still working for the bank at the time, to encourage workforce retention. Five employees who are also eligible for the bonus are retiring and will receive all three years’ payments at once, totaling $66,000.
The SMART Plan, the bonus program’s official title, will be reviewed and approved by the bank’s advisory board on an annual basis. Final approval for the payouts rests in the hands of the North Dakota Industrial Commission. The commission is a three-person board composed of the governor, Attorney General Drew Wrigley and Agriculture Commissioner Doug Goehring.
“The origination of this was very thoughtful,” Armstrong said. “Now it’s just a matter of making sure the metrics make sense as performance versus ‘Hey, thanks for being here and working for the bank.’”
The Bank of North Dakota’s program is structured differently than the State Investment Board’s. The performance bonuses are awarded as a percentage of base pay, like the investment board’s, but cannot exceed 16.5% of that salary. The percentage is based on the bank’s performance as a whole, rather than reflecting individual achievements, and is applied to all qualifying employees instead of solely the investment team.
“We had a fantastic year in financial performance,” Morgan said.
Under the State Investment Board plan, some top officials are eligible to receive up to 90% or 100% of their annual pay. In the bonuses that were recently approved, seven bonuses topped $100,000, with the largest one at $293,000.
While the bank’s program could increase retention and reduce staff turnover, Armstrong noted the concept of performance bonuses does not reflect individual performance. He said if a loan was approved seven years ago, but is now underperforming, the staff working on the loan are not necessarily the people responsible for signing off on it in the first place.
Gov. Kelly Armstrong, center, speaks to Don Morgan, left, president of the Bank of North Dakota, during a special meeting of the Industrial Commission with Agriculture Commissioner Doug Goehring, center-left, and Attorney General Drew Wrigley, right, on Oct. 8, 2025. (Photo by Michael Achterling/North Dakota Monitor)
“It’s an imperfect solution,” Armstrong said. “I don’t know what the other, better way to do it would be.”
The bank’s CEO acknowledged there are things that are out of the control of his staff, but the program aims to drive a unified strategy and reward the staff as a whole for successfully reaching predetermined targets. The SMART Plan’s bonuses are based on four metrics: credit quality, enterprise risk management, financial performance, as well as mission and strategy.
“There’s many ways to shape and form these. This typically tends to work the best if you’re trying to create one team moving in the same direction,” said Morgan.
Goehring encouraged the bank to ensure the goals are not easily attainable.
“I appreciate what it’s doing, because it’s creating a culture,” Goehring said. “I just want to make sure that the stretch goals are sufficient. You start attaining these all the time, and it’s too easy, and it’s going to suffer a lot of criticism and scrutiny that way.”
The bank’s advisory board is reviewing the 2026 SMART Plan that will set benchmarks for the program’s second year. The plan will be presented to the Industrial Commission for review in the coming months.
“They’re being very thoughtful and careful about it, taking their role very seriously,” Morgan said.
North Dakota Monitor reporter Jacob Orledge can be reached at jorledge@northdakotamonitor.com.
