Big bumps in salaries and bonuses made the top executives at the largest U.S. banking companies considerably richer last year.
Proxy statements filed this spring with the Securities and Exchange Commission showed that the 10 highest-paid bankers in 1996 had these things in common:
Their companies underwent major reorganizations.
They were aided by a huge run-up in their banks' stock prices.
The bulk of their pay came in the form of bonuses tied to performance.
Joel B. Alvord, who retired at yearend as chairman of Fleet Financial Group, headed the cash compensation list at $15 million, a figure that analysts said was outsize because of a severance package. Mr. Alvord headed Shawmut National Corp. before Fleet bought it in 1995.
Frank N. Newman, chairman of Bankers Trust New York Corp., and Walter V. Shipley, his counterpart at Chase Manhattan Corp., were next on the list at $5.7 million. Three others exceeded $5 million.
"It's a subject that really ticks off a lot of people," said Richard X. Bove, an analyst at Raymond James Associates. "But in most cases, these executives earned that money both by being there a long time and by accumulating a lot of value for shareholders."
Mr. Newman at Bankers Trust, the seventh-largest banking company, enjoyed a 558% increase from 1995, when he joined as senior vice chairman. He became chairman last April with the departure of Charles Sanford.
Analysts said Mr. Newman's pay also reflects efforts to remake the image of Bankers Trust in the wake of a highly publicized derivatives scandal.
A former BankAmerica Corp. and U.S. Treasury official, Mr. Newman "walked in there with enormous stature," said Mr. Bove.
The largest bank, Chase Manhattan Corp., placed three of its executives- Mr. Shipley, president Thomas G. Labrecque, and senior vice chairman Edward D. Miller-in the industry top 10.
They were rewarded for the successful merger last year with Chemical Banking Corp., said analysts. And more "merger bonus" is coming. Mr. Shipley is to receive $5 million over a three-year period that began in 1996 for completing the Chemical deal, a bank spokesman said.
J. Carter Bacot, the chairman at Bank of New York Co.-the nation's 16th- largest bank-was fourth on the list with $5.5 million. Mr. Bacot, who has been at the helm for the last 15 of his 37 years with the bank, is credited for cost cutting and for building technology infrastructure.
The sole business-line head among the 10 top earners-James E. "Ted" Virtue, senior vice president and head of investment banking at Bankers Trust-was paid $5.4 million.
Observers said Mr. Virtue's compensation was customary for those engaged in nontraditional activities. Mr. Virtue could command similarly high pay elsewhere on Wall Street, consultants said.
Five of the top 10 work at banks that focus heavily on trading and investment activities, a symbolically important point.
"Every commercial bank that has tried to get into capital markets but has been unwilling to pay the big bucks has failed," said Steve Hall, a partner at Pearl Meyer & Partners, a New York executive search firm.
"The boards are realizing that it's penny wise and pound foolish not to pay that kind of money to keep the talent."
Conspicuously absent from the top 10 is John S. Reed, chairman of No. 2- ranked Citicorp. Market watchers said his 1996 pay of $3.55 million, which included a lower bonus than he received in 1995, may reflect that the bank did not perform as well as expected.