THEY SAY ALL GOOD THINGS must come to an end. Brenda Lynn, vice president of loan production at Plaza Home Mortgage Corp., knows exactly what they mean.

During 1991 and 1992, Ms. Lynn was paid annual bonuses by a simple formula tied to volume.

Since she works for one of the fastest-growing mortgage banks in the country. the result has been astonishingly fat pay envelopes.

In 1991. Ms. Lynn received a base salary of $115,000 and a bonus of $743,886. But that amount was a pittance compared to her 1992 compensation. Loan origination volume broke all the records around the country last year, and Ms. Lynn's pay merrily followed suit. Her base salary rose to $150,000 and her bonus climbed to a mind-numbing $876,261.

William E. Moffatt head of secondary marketing, had compensation that mirrored Ms. Lynn's. In 1991 his salary was $96,000 and his bonus $540.000. Last year, while his salary remained unchanged, his bonus shot to a stratospheric $905,466.

Plaza's business took off when it went public a little over a year ago. Santa Ana, Calif.-based Plaza is now among the top 20 mortgage originators.

For the first six months of 1993, the company wrote $3.4 billion in loans and had a servicing portfolio of $3.4 billion in June. The company expects to originate between $8 billion and $10 billion in loans this year and expects to retain about 50% of those loans for its servicing portfolio.

But the bonus bacchanal, at least for Ms. Lynn and Mr. Moffatt, appears to be coming to an end. Beginning this year, the two executives will receive bonuses to be decided by Jack French, Plazas chief executive.

"Unfortunately, it's over," Ms. Lynn said with a rueful laugh during a recent telephone interview. "I expect to get a much smaller bonus this year."

Something of a Windfall

Ms. Lynn said she never expected to make as much money as she did in the last two years. She said she and Mr. Moffatt both viewed the massive bonuses as something of a windfall.

"We both kind of look at it as like we had a couple of really great years and we were real happy that that happened to us, but we were realistic. We didn't want to price ourselves out of the industry," Ms. Lynn said.

Ms. Lynn, who is unconcerned by the industry chatter over her astronomical earnings, pointed out that the compensation plan was not her idea and added she was not the only head of production paid on a commission basis. Other heads of production make more, but do not have to disclose their salaries since they work for privately held companies, she said.

Plaza is forging ahead. Analysts remains confident, and Ms. Lynn said the company was seeking to diversify out of California to lessen its vulnerability to the economic slump in that state. Today, 70% of Plaza's loans originate in California. Ms. Lynn said the company plans to bring that down to 50%.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.