WASHINGTON - The court-appointed trustee of First American Bankshares Inc. fired four of the company's directors late Tuesday in a dispute involving an incentive plan that would have paid some executives up to $8 million in bonuses.
Trustee Harry W. Albright Jr. fired president George L. Davis, a former Citibank executive; chairman Nicholas deB. Katzenbach, a U.S. attorney general during the Johnson administration; Donald Glickman, a former banker; and Charles Stauffacher, a retired Florida businessman.
Mr. Glickman joined the bank in April; Mr. Stauffacher, in 1989. The chairman and president joined the board last year.
Mathias New Chairman
Former Sen. Charles McC. Mathias, a First American board member, was named chairman, and Paul G. Adams 3d, currently an executive vice president, was named president and chief executive. Mr. Albright said he would replace the other two directors later.
Sources said Mr. Albright objected to a plan to sell the good assets of First American's three main banks - in Maryland, the District of Columbia, and Virginia - and put the sour assets in a so-called "bad bank."
"Apparently, the trustee prefers a whole-bank sale," said a source who is informed on the sale negotiations.
In addition, Mr. Albright reportedly objected to paying Mr. Davis and a group of officers from $7 million to $8 million in bonuses for a successful sale of the banks.
Katzenbach Admits Mistakes
In an interview, Mr. Katzenbach said that mistakes had been made regarding the bonus plan. A cap should have been placed on the amounts executives could receive in the event of a sale, he said.
Mr. Albright "was quite right about it. There were things wrong in that bonus plan, and we recognized it." Mr. Katzenbach said.
The sale of First American's three main banks should be completed by January, Mr. Katzenbach said.
First American has $6.1 billion in assets.