MB Financial (MBFI) plans to retain nearly all of the top executives at Taylor Capital Group (TAYC) following the companies' planned merger, according to a report Wednesday in Crain's Chicago Business.
All 10 of the highest-paid executives at the two Chicago companies will be given roles with the combined institution after the merger closes, according to an internal organizational chart obtained by Crain's. The 10 executives received about $14 million in compensation last year, Crain's reported, based on the companies' proxy filings.
Because the two companies' now plan to keep on more executives than initially announced some in roles that appear to overlap the retentions could make it more difficult for MB Financial to achieve the cost savings it expects in integrating Taylor, according the Crain's report. In a recent investor presentation, MB Financial said that it planned to cut 30% of Taylor's core operating costs, excluding its mortgage business.
An MB Financial spokeswoman did not immediately respond to American Banker's request for comment. Taylor Capital Group said the company "does not comment on rumors or personnel matters.".
Under the two companies' planned $680 million merger, announced in July, MB Financial Chief Executive Officer Mitchell Feiger will remain in that role, and Mark Hoppe, Taylor's CEO, will become president and CEO of MB Financial Bank. The agreement also would give Cole Taylor Bank directors Jennifer Steans and C. Bryan Daniels seats on MB Financial's board.
The combined company's commercial lending group will be led by two executives, one from each company. Additionally, it will retain both MB Financial's Ed Milefchik and Cole Taylor's Larry Ryan, each of whom oversees middle-market lending at their respective companies. John Lynch, Taylor's head of commercial real estate lending, will lead client development for the combined company, Crain's reports.
Taylor Capital Chief Financial Officer Randall Conte will become chief operating officer at MB Financial, a new position, while current MB Financial CFO Jill York will remain in that role. Bruce Taylor, the chairman of Taylor Capital's board, will become vice chairman of the board of MB Financial Bank.
The combined company would have about $15 billion of assets, and MB Financial expects the merger to close in the first half of 2014. Taylor bought back its $58 million worth of outstanding Troubled Asset Relief Program shares earlier this month.