The trend of linking executive pay to bank performance all but disappeared in 1991.
Cash compensation for the 10 highest-paid bank executives in 1991 rose an average of 46% from their pay in 1990, according to a survey from SNL Securities. Earnings at their banks during the same period rose less than 7%.
In addition, three of the highest-paid executives broke the $2 million mark in pure cash awards.
Never before had more than one senior executive from a public bank company broken into that rarefied realm.
"If there were a relationship between pay and performance, then we wouldn't be seeing salaries like this during a recession," said Graef Crystal, an executive-pay expert who teaches at the University of California at Berkeley.
The nation's highest-paid banker last year was Dennis Weatherstone, chairman of J.P. Morgan & Co., who earned $2.06 million, a 30.1% jump from his year-earlier pay. Morgan's net income jumped 14% in 1991.
The figures for Mr. Weatherstone and others in the survey include salary, bonus, deferred compensation, and other forms of cash-equivalent compensation such as installments of annual bonus payments.
Excluded are severance pay and signing bonuses, where identifiable in proxy statements.
Though all senior Morgan executives did well - four were among the top 15 highest-paid bankers last year - it also paid to preside over a megamerger.
Runners-Up in Derby
John F. McGillicuddy, now chairman of Chemical Banking Corp., made $2.05 million in 1991, earning runner-up honors in the bank compensation derby.
His 89.1% pay hike came as earnings at his old shop, Manufacturers Hanover Corp., rose 45% on an annualized basis.
Hugh McColl, president of what is now NationsBank Corp., earned $2 million. That was nearly three times the $700,000 he took home in 1990 as head of NCNB Corp., which adopted the new name after merging with C&S/Sovran Corp.
A NationsBank spokesman said Mr. McColl's 1991 salary of $700,000 matched his 1990 pay. The difference was a $1.3 million bonus received last year versus no bonus in 1990.
According to the SNL survey, the median percentage increase in cash compensation for chief executives at 49 banks with more than $10 billion in assets was 8.7%.
These banks reported aggregate earnings $1 billion below the previous year's, and more than 20% of them lost money in 1991.
However, the correlation between strong bank performance and high pay also exists.
J.P. Morgan and Bankers Trust New York Corp., both of which reported record earnings in 1991, were home to seven of the 15 highest-paid executives at commercial banks.
Executive compensation in banking will continue to be tied more to precedent than bank returns, said Emanuel Monogenis, head of the financial institutions practice at Heidrick & Struggles Inc., an executive search firm.
The shakeout in the savings and loan industry means that many of the survivors are relatively strong, with their overseers compensated accordingly.
Among thrift executives, the two top officers of Great Western Financial Corp. ranked first and third in cash compensation in 1991 as return on assets at the company soared.
James F. Montgomery, chairman of the California company, made $1.72 million last year, a 27.3% increase over his 1990 pay.
John F. Maher, president of the nation's second-largest thrift company, took home $1.1 million.
Richard H. Deihl of H.F. Ahmanson & Co., the biggest thrift, ranked second among thrift executives with cash compensation of $1.21 million.
Unlike many of his peers, however, his compensation actually declined - though by less than 1% - despite a rise in his company's performance.