Last year's 10 highest-paid bankers received big boosts in compensation, helped by large grants of restricted stock and other reward packages, according to data compiled by American Banker.
Half of the names are new to the list and include top executives at banks whose stock prices were aided by high-profile acquisitions.
Edward E. Crutchfield Jr., chairman and chief executive officer of Charlotte, N.C.-based First Union Corp., ranked as the nation's highest- paid commercial banker in 1997, with compensation of $19.5 million. He did not appear on the 1996 list.
Mr. Crutchfield, who guided his bank through two major acquisitions last year and the pending $17 billion purchase of CoreStates Financial Corp., had cash compensation of $1 million and a bonus of $2.05 million.
His 1997 paycheck ballooned thanks to a grant of $15.1 million in First Union restricted stock. In 1996, Mr. Crutchfield's restricted stock grant totaled $1.2 million.
Another new name on the list, Andrew B. Craig 3d, was the second-highest paid bank executive last year. The former chairman of Boatmen's Bancshares, which was purchased by NationsBank Corp. in January 1997, received $14.7 million in pay.
That included $991,318 in cash and $3.5 million in cash bonus. The biggest boost to Mr. Craig's income was a grant of $10.1 million in restricted stock, according to data compiled by American Banker.
At Banc One Corp., chairman and CEO John B. McCoy had compensation of $8 million, vaulting him to 10th on the list. He was not among the 10 highest in 1996.
Mr. McCoy received a $4 million special recognition award for performance in 1997, a year in which he oversaw the acquisition of credit card company First USA, the pending purchase of First Commerce Corp. in New Orleans, and several smaller bank deals. His regular salary of $995,000 and cash bonus of $1.5 million were little changed from 1996. Even his restricted stock of $1.079 million was the same.
Taking into account the boost in stock value for shareholders that come from acquisitions, the 1997 compensation levels "don't seem that high," said Richard X. Bove, an analyst at Raymond James Associates. First Union's stock rose 40% in value last year; NationsBank's rose 25%; and Banc One's rose 26%.
"These companies are bringing executives up to an appropriate level," said Lee Pomeroy, an executive recruiter at Egon Zehnder in New York.
Awards can also be used as a tool for retention, consultants said. Restricted shares, in particular, are not exercisable for an average of two to four years, these consultants said. "It forces executives to take a longer-term look at what they need to accomplish," said Diane Posnak, a partner at Pearl Meyer & Associates in New York. "It's also a trade off. With cash, someone could just walk away."
Other bankers returning to the list include the three top executives at Chase Manhattan Corp.; the chairman and two executives in charge of the high-profit investment banking unit at Bankers Trust New York Corp.; and the retiring chairman of Bank of New York Co., J. Carter Bacot.
But a number of executives from the nation's largest banks are conspicuously absent from the 1997 list.
NationsBank's high-profile CEO, Hugh L. McColl Jr., took home a mere $4.5 million last year. His compensation came in the form of cash and bonus but did not include a grant of restricted stock. In 1996, Mr. McColl was eighth in the rankings compiled by American Banker.
Consultants said Mr. Craig, who is now chairman at NationsBank, will likely retire soon and may have received restricted stock as part of his golden parachute.
Analysts said that factor is one danger with restricted stock. "Having a golden parachute gives an executive tremendous incentive to sell a company regardless of performance," Mr. Bove said.