Huntington Bancshares (HBAN) has extended the contract of Chief Executive Stephen Steinour by three years, through the end of 2016, the Columbus, Ohio, company said Thursday.
Steinour, who became CEO in 2009, is credited with leading the company's resurgence by expanding niche businesses such as car lending, hiring commercial bankers, beefing up marketing and adding tens of thousands of checking relationships with consumer-friendly policies.
"The board made this decision because they thought it was a positive for stockholders to extend his contract through 2016" as CEO and president, a Huntington spokeswoman said. His current agreement began in January 2009 and was set to expire on Dec. 31, 2013. Steinour is also Huntington's chairman.
After losing $3 billion in 2009, Huntington returned to profitability in the first quarter of 2010 and has made money every quarter since, including a record $168 million in this year's third quarter. For guiding Huntington through the financial crisis, returning it to profitability sooner than expected and positioning it as a retail banking force, American Banker this week named Steinour its Banker of the Year for 2012.
Steinour did not get a pay raise in connection with the contract extension, though the board has the power to change his compensation at any time during his employment, the spokeswoman said.
Steinour received total compensation of $6.4 million last year, up 31% from a year earlier, according to American Banker's analysis of top bank executives' pay in 2011. His pay included a salary of $1 million.
Two changes were made to the fine print of the contracts of Steinour's contract in the event of a change in control such as a merger or sale of the company. First, he would have to pay the federal excise taxes that would be due on his "golden parachute" if the company was sold or otherwise changed ownership, according to an 8-K filing Wednesday with the Securities and Exchange Commission.
Additionally, a second triggering event was added before he could be freed from his contract in the event of a change in control. The new deal eliminates "a provision that provided the executive serving as chief executive officer with the right to terminate employment solely as a result of a change in control." Basically, he could not leave without being fired or replaced.
Huntington said the moves were to keep current with general corporate-governance standards. "Huntington made those two changes because we want to comply with best practices for corporate governance," the spokeswoman said.
Similar changes were made to agreements with Chief Financial Officer Donald R. Kimble and executives Mary W. Navarro, James E. Dunlap and Nicholas G. Stanutz. The changes take effect Saturday, continue through the end of next year, and are subject to one-year renewals by the board.
The new agreements also add restrictions relating to the disclosure of confidential information and competing with Huntington in case of a change in control, the filing said.