Firstar Corp. chairman Roger L. Fitzsimonds received a 1996 bonus that was less than half of 1995's, according to the bank's recently released proxy.
Analysts said the diminished bonus was due to a major restructuring at the Milwaukee-based company.
Mr. Fitzsimonds, who is also chief executive officer, received a 4% salary increase to $642,600, but his bonus was chopped by more than half to $163,500, according to the proxy. His total cash compensation declined 17%.
That's good, said analyst Ben Crabtree of Dain Bosworth Inc. "They're very upright people," Mr. Crabtree said of Firstar's management. "If they didn't perform as well as the year before, they shouldn't get paid as well as the year before."
Firstar, with $19.5 billion of assets, earned $250 million in 1996, which was up 9% from 1995. But Firstar bases its bonuses on profitability. Because the company didn't perform in the top quartile of its peer group, executive bonuses were cut.
Even though his cash compensation was slashed, Mr. Fitzsimonds' long- term incentive payout increased 39% to $596,200, and he received stock options of $172,600, nearly twice the options he received a year ago.
The extensive reorganization began early last year and included the elimination of 2,500 jobs, or 26% of Firstar's work force. The company took a $50 million pretax restructuring charge in the first quarter of 1996 to cover the program.
The restructuring also apparently caused some revenue disruption, as income in some areas, including commercial lending, came in short in the fourth quarter.
A spokeswoman said Firstar hasn't revised its policy regarding executive compensation as a result of the restructuring. According to the proxy, bonuses are tied to Firstar's return on equity and how that ratio compares with peer banks. Firstar's return on equity was 15.95% in 1996, compared with 15.11% in 1995. The bank hoped to earn a return on equity of more than 17%.
In addition to Mr. Fitzsimonds, three of the other top five executives at Firstar had lower cash compensation in 1996 than in 1995. The exception was Richard W. Schoenke, who was promoted in 1996 from president of Firstar Bank Minnesota to senior executive vice president in charge of commercial lending. Mr. Schoenke's cash compensation was raised 26%.
John A. Becker, president, also received less than half of his 1995 bonus. Mr. Becker's cash compensation in 1996 declined 16% to $581,000. Chris M. Bauer, chairman of Firstar Bank Milwaukee, saw his cash compensation decline 5%, while Jay B. Williams, president of Firstar Bank Illinois, received 6.5% less cash compensation from the prior year.
The cut in Mr. Fitzsimonds' bonus also made James B. Wigdale the highest paid major bank executive in Milwaukee last year. Mr. Wigdale, chairman and CEO of the $14.9 billion-asset Marshall & Ilsley Corp., earned cash compensation of $950,000 in 1996, a 15% increase over 1995.