10 bank CEOs who recently got big pay raises

March 28, 2022 9:00 PM

During the pandemic’s first year, CEO compensation at large and regional banks rose by 8.9%, as hikes in long-term incentive compensation were partially offset by smaller bonuses.

While the full data for 2021 is not yet available, early returns indicate that chief executives got bigger pay bumps in a year that featured less upheaval and uncertainty than the previous one.

Data on pay last year for the CEOs of 18 large and regional banks shows that they all received a boost in total direct compensation, according to an analysis by Compensation Advisory Partners, a consulting firm. The increases ranged from 4.8% to 100%.

Most of the pay hikes were the result of both larger annual cash bonus payments and increases in long-term incentive awards, according to a review of the banks’ most recent proxy statements.

Total direct compensation includes not only an individual CEO’s base salary for a specific calendar year, but also bonus payments and other rewards that may be paid out after the year concludes. Therefore, the compensation numbers below may differ materially from the summary compensation figures that are provided in the banks’ proxy statements.

Using the data compiled by Compensation Advisory Partners, American Banker identified 10 chief executives who received relatively large year-over-year percentage increases.

Two of the nation’s highest-paid bank CEOs — JPMorgan Chase’s Jamie Dimon and Citigroup’s Jane Fraser — are not on the list. Dimon’s pay package totaled $34.5 million for 2021, but his year-over-year increase was 9.5%, less than some of his counterparts at smaller banks. Fraser was not included because she did not take over as CEO until Feb. 26, 2021.

The CEOs are listed in ascending order based on the size of their pay increase for 2021.

Greg Carmichael, Fifth Third Bancorp

2020 total direct compensation: $9.7 million

2021 total direct compensation: $11.6 million

Percentage increase: 19.7%

The rise in Carmichael’s total direct compensation was primarily a result of a hefty boost in long-term incentive awards. It reflected a strong year for the $211 billion-asset company, including record full-year net income, a stock price that appreciated 58% and successful balance sheet management, according to the company’s most recent proxy statement.

Fifth Third also pointed to progress in environmental, social and governance efforts, including the bank’s inaugural green bond and the development of a climate risk program.

Carmichael has been chief executive of Cincinnati-based Fifth Third since November 2015.

Kyle Grillot/Bloomberg

Charlie Scharf, Wells Fargo

2020 total direct compensation: $20.3 million

2021 total direct compensation: $24.5 million

Percentage increase: 20.5%

In Scharf’s second full year as Wells Fargo’s CEO, the company’s board of directors upped his variable incentive compensation. That portion of Scharf’s pay package — which includes annual bonuses and long-term incentives — rose from $17.8 million in 2020 to $22 million last year. His base salary was unchanged at $2.5 million.

According to Wells Fargo’s proxy statement, when determining how much to reward Scharf, the company’s board took into account his “strong leadership” of the $1.9 trillion-asset bank, which “continues to make progress on fulfilling the company’s strategic and risk and regulatory priorities, while actively supporting customers, communities and employees.”

Nonetheless, the San Francisco-based bank continues to operate under various consent orders. In October, the Office of the Comptroller of the Currency fined the company $250 million in connection with problems in its home lending unit and violations of a 2018 consent order.

Andy Cecere, U.S. Bancorp

2020 total direct compensation: $12.9 million

2021 total direct compensation: $15.7 million

Percentage increase: 21.5%

The increase in Cecere’s pay package includes a boost in his annual cash bonus, which totaled $4.5 million for 2021, and long-term incentive awards valued at $4.5 million, well above his target award amount of $3.2 million.

The $573.3 billion-asset company, which is awaiting regulatory approval to acquire MUFG Union Bank in San Francisco, had a strong year, including full-year net income of nearly $8 million, up 60.6% from the prior year, Minneapolis-based U.S. Bancorp said in its fourth-quarter earnings report.

One important financial metric — return on tangible common equity — increased from 13.2% in 2020 to 20.4% last year. Cecere’s base salary, which accounted for 7.6% of his total direct compensation in 2021, remained flat at $1.2 million.

Bruce Van Saun, Citizens Financial Group

2020 total direct compensation: $9.1 million

2021 total direct compensation: $11.3 million

Percentage increase: 24.3%

A year after Van Saun’s total direct compensation dipped by 9.5% — partly due to a decline in profits during the first year of the pandemic — it surged by nearly 25% thanks to a larger cash bonus and an uptick in performance-based stock awards.

Van Saun’s base salary was about $1.5 million, unchanged from 2020, but his cash bonus totaled $2.9 million, up 29% from the prior year.

The Providence, Rhode Island, company’s board tied Van Saun’s 2021 compensation to what it characterized as solid performance metrics, a strong technology agenda and a handful of bank and nonbank acquisitions, among other factors. Also cited was what the company described as its talent attraction and retention in a challenging labor market and its continuing improvement in risk management and controls.

William Demchak, PNC Financial Services Group

2020 total direct compensation: $16 million

2021 total direct compensation: $20 million

Percentage increase: 25%

Record levels of revenue and fee income, along with the successful acquisition and integration of BBVA USA, were some of the factors that PNC’s board cited in connection with the increase in Demchak’s compensation.

Demchak, who took the CEO reins at the $557.2 billion-asset PNC in 2013, received a cash bonus payment of $3.8 million and long-term incentive awards worth $15 million, which was 45% above the target award amount.

He was also paid a base salary of $1.2 million, the same amount he received in 2020.

René Jones, M&T Bank

2020 total direct compensation: $6 million

2021 total direct compensation: $7.8 million

Percentage increase: 30%

In 2021, Jones received a cash bonus of $1.5 million — twice the amount he collected the prior year, when his bonus payment was cut by 40% to reflect the challenges of the pandemic. That increase, along with a nearly 25% increase in long-term incentives, helped boost Jones’ total direct compensation year over year, even though his base salary remained unchanged at $1 million.

The compensation committee of M&T’s board based Jones’ compensation on factors that included the bank’s 2021 financial performance, its work in building out new markets, its risk management and its talent acquisition and diversity. Also cited were Jones’ roles outside of the Buffalo, New York, bank, including his recent election to the board of the directors of the Federal Reserve Bank of New York.

Jones is in his fifth year as chairman and CEO of the $155.1 billion-asset company, which is set to finalize its acquisition of People’s United Financial in Bridgeport, Connecticut, on April 1.

Brian Moynihan, Bank of America

2020 total direct compensation: $24.5 million

2021 total direct compensation: $32 million

Percentage increase: 30.6%

After declining in 2020 by 7.5% — largely because of a pandemic-induced drop in profits at BofA — Moynihan’s total direct compensation rebounded, and then some, to $32 million.

The $3.2 trillion-asset company’s board rewarded Moynihan, who became CEO in 2010, for a record $32 billion in net income last year, a 47% increase in the stock price over the course of the year and organic growth across business lines, including what it described as the addition of 901,000 net new checking accounts.

Moynihan’s base salary was unchanged at $1.5 million, while his 2021 equity incentive award totaled $30.5 million. Consistent with prior years, Moynihan’s pay package did not include a cash bonus.

Curtis Farmer, Comerica

2020 total direct compensation: $5.4 million

2021 total direct compensation: $8 million

Percentage increase: 48.1%

In 2021, Farmer’s base salary increased 4.1% to a little over $1 million, but that’s only part of the story.

Farmer, who has been chief executive of Dallas-based Comerica since 2019, also received a $2.7 million cash bonus, up from $658,125 in 2020. And he collected $3.8 million in long-term incentive awards, up from $3.2 million the previous year.

In assessing Farmer’s performance in 2021, Comerica’s board highlighted more than the $94.6 billion-asset company’s financial successes, which included record earnings per share of $8.35.

Also cited was Farmer’s leadership during the pandemic, Comerica’s acquisition of a small trust company, the firm’s expansion into the Southeast and initiatives to increase its diversity and focus more on environmental, social and governance work.

Chris Gorman, KeyCorp

2020 total direct compensation: $7 million

2021 total direct compensation: $11.5 million

Percentage increase: 64.1%

While Gorman’s base salary stayed flat at $1 million, his bonus payment rose to $3.3 million, and his long-term incentive compensation climbed to $7.2 million.

The compensation committee of Key’s board pointed to several factors in explaining the substantial pay bump, including: Gorman’s leadership during the pandemic, record net household growth and the launch of Laurel Road for Doctors, a digital bank for physicians and dentists that will also be offered to nurses.

Also mentioned was Key’s investment banking business, which generated $937 million in fee income last year, including a record $323 million in the fourth quarter.

David Solomon, Goldman Sachs

2020 total direct compensation: $17.5 million

2021 total direct compensation: $35 million

Percentage increase: 100%

Solomon’s compensation roared back a year after being cut by $10 million. The pay decrease in 2020 was connected to a probe of Goldman Sachs’s involvement in a Malaysian government corruption scandal, which the New York-based investment bank paid nearly $3 billion to settle.

Solomon, who has been CEO since 2018, is currently tied with Morgan Stanley CEO James Gorman as the industry’s highest-paid chief executive. His base salary remained flat at $2 million, while both his annual cash bonus and his long-term incentive pay more than doubled, rising to $9.9 million and $23.1 million, respectively.