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Bankers Enjoy Rewards But Run Risks as Pay Jumps

Bank bosses enjoyed nifty bonuses in fiscal 2011, even as their stocks languished. Those trends typify the balancing act that banks and their boards face in setting pay.

Ken Feinberg on the Role of Corporate Governance in Regulating Executive Compensation

The former Tarp special master calls for a "sea change" in how banks and other corporations determine pay.

Succession Planning Becomes Job No. 1 for Bank Boards

"There probably isn't a hotter topic in financial services today" than who will take over when the boss steps down. So says Korn/Ferry International's Eric Pikus.

Ken Feinberg on How Banks Can Protect Against a Pay Backlash

The former Tarp pay master urges banks to head off anger over executive compensation by voluntarily complying with pay standards laid out by regulators.

Ken Feinberg on Risks Banks Face from Rising Executive Pay

Banks that guarantee paydays ought to beware of a political and regulatory backlash. So warns the former executive compensation overseer for the Troubled Asset Relief Program.

  • Big Earners, Smaller Banks
  • Big Earners
Big Earners, Smaller Banks

Median pay for CEOs at banks with less than $20 billion of assets was less than a tenth of the median amount for bosses at banks with more than $100 billion of assets in American Banker's 2012 compensation survey. Growth in pay from 2010 was roughly parallel between the two groups, however. Here are some of the most richly rewarded chiefs among the smaller banks. Pay data and ratings of the banks' pay practices are provided by GMI Ratings, a governance watchdog. Figures are for 2011.

William Cooper, TCF Financial

Base salary: $1M
Total compensation: $8.9M
Change from 2010: 310%
Company ROAA: 0.6%
Total return on company stock: 19%
GMI compensation risk rating: High concern — Top executives eligible for discretionary cash bonuses, "which undermines a pay-for-performance philosophy"


 

With nearly a third of bank tellers on public assistance nationwide, labor advocates are pushing banks to increase pay for workers at the low end of the spectrum.

Median CEO pay at the four largest banks rose 16.7% last year compared to 2012, according to governance watchdog GMI Ratings. In comparison, median pay for the other banks with at least $50 billion in assets fell 17%. Here are the industry's highest-compensated CEOs.

Median pay for CEOs at banks with less than $20 billion of assets typically pales in comparison with the executive compensation at larger institutions. Still, some CEOs at smaller banks are richly rewarded. Figures, provided by GMI Ratings and SNL Financial, are for 2013.

Banker compensation trends were mixed last year, particularly among the nation's largest institutions. Average CEO compensation at the nation's four largest banks rose 10% in 2013, compared to a year earlier.

Bank boards are busier than ever, but that's no excuse for putting succession planning on the back burner. The brutal reality for financials is that at a time when the cost of complacency is rising, the size of the fix is widening.

Old National Bancorp says it learned its lesson from the recent defection of some important lenders from a bank it agreed to buy last fall, and it incorporated those in structuring its deal announced this week for United Bancorp.

Bryn Mawr Bank in Pennsylvania starts every acquisition discussion the same way: the top talent agrees to stay or Bryn Mawr is not interested in pursuing a deal. It's a lesson for anyone considering buying or selling a bank.
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