With the banking sector reeling from one of the toughest business environments on record, some bankers are going a bit further to show they are willing to take some blows.A number of chief executives have suspended 2008 bonuses for themselves and their management teams against a backdrop of industrywide layoffs, but Bill Cooper, the chairman and CEO of TCF Financial Corp., also plans to forgo his salary.
Mr. Cooper made the announcement last week, when his Wayzata, Minn., company reported that its full-year earnings fell 50%, to $129 million. He did not say how long he would go without compensation, and calls to him this week were not returned.
The New York Post reported Thursday that Sandy Weill, the former chairman and CEO of Citigroup Inc., will end his consulting for the company in April and will give up many of the same perks he received before retiring in 2003 — including corporate jet access. This week regulators reportedly told Citi, which posted a loss of $18.7 billion for last year and needed a government bailout, not to take delivery of a new jet.
(Vikram Pandit, the current CEO, has said he and other managers will forgo their bonuses.)
Mr. Weill's plan to stop consulting for Citi apparently predates reports about the new jet. A Citi spokeswoman said that he and the company had mutually agreed to terminate the 10-year contract in August. She would not discuss the contract's details or confirm whether Citi had been told to cancel delivery of a corporate jet. However, a source close to Citi said that it is looking to reduce its jet fleet from five to two.
Bankers are not alone in trying to show that they are embracing austerity. This week The Wall Street Journal reported that Howard Schultz, the CEO of Starbucks Corp., has asked the company to cut his salary from $1.2 million to $10,000 after the company reported a significant drop in profits.
Starbucks is also closing 300 more stores and cutting nearly 7,000 jobs.
He Saw the Sign
SunTrust Banks Inc.'s chief credit officer said he has found a way to track the Atlanta housing market during his daily commute.During an earnings conference call last week, Tom Freeman said a giant billboard along his route to work tracks housing listings in the city.
The running tally on the sign shows that inventory in the area has dropped 23% in the last two and a half months, he said.
"The housing market still has too much inventory, but I think it has tightened down considerably," Mr. Freeman said. "We're not seeing the rapid decline in housing prices that's we're seeing in other areas of our footprint."