If early proxy filings are any indication, senior bankers last year diverged into distinct groups of haves and the have-nots. The difference? Bonuses.
Though some senior executives walked away with hefty increases in cash salary and bonuses last year, those at companies that have been suffering from profit shortfalls, rising commercial credit losses, and restructuring charges walked away with none.
Distinctly in the first category is Sanford I. Weill, the chairman and chief executive officer of Citigroup Inc. He received cash compensation of $19.9 million last year, including $1 million in salary, $18.5 million in bonus, and $449,404 in additional compensation for travel expenses and financial planning services, according to the companys proxy filed late Friday with the Securities and Exchange Commission. The cash component of Mr. Weills compensation, which excludes options and other long-term compensation, was 96% higher than in 1999.
Citigroup shares rose 22% last year, fueled by gains from consumer operations that helped offset slumping revenues from investment banking.
In Category 2, meanwhile, was Philip Humann, chairman and chief executive officer of SunTrust Banks Inc. He received a salary of $808,750 but no cash bonus for 2000. His combined cash compensation, which excludes options and other long-term payments, declined 33%, according to the companys proxy, which was also filed late Friday.
The Atlanta-based company struggled with a rise in nonperforming assets last year. Shares of SunTrust declined 3% in 2000.
Other SunTrust executives, including chief financial officer John W. Spiegel, also saw bonuses vanish last year. It was managements judgement that bonuses were not appropriate, a spokesman said. Earnings were good, but we didnt meet some internal targets. He declined to elaborate.
Observers should expect more of the same. Bank One Corp.s chairman and chief executive officer, James Dimon, told analysts and investors in December that the Chicago company would forgo paying cash bonuses for 2000 to its 13 senior managers.
That group includes Mr. Dimon, who is giving up a $2.5 million cash bonus guaranteed when he was hired last year. The company is expected to file its proxy materials with the SEC at the end of this month or early next month.
Bank One shares actually increased 14% last year, but the company took more than $2 billion in charges, spread across several quarters. Performance in 2000 was not good; therefore the top executives felt it was not appropriate to get cash bonuses, a Bank One spokesman said.
First Union Corp. in Charlotte, N.C., has also clamped down. Top executives are not getting raises this year. G. Kennedy Thompson, who took over day-to-day operations as chief executive officer last June, succeeding the ailing Edward Crutchfield, gave up his 2000 bonus. First Union executives got no bonuses in 1999 either. The companys proxy is expected to be filed by mid-March.
Bank One and First Union were both battered last year by steadily rising nonperforming assets and by charges for ongoing restructuring projects. First Union shares declined 15.5%.
Some executives also got big payouts when they left their companies. Philip G. Heasley got two lump-sum payments totaling $8.54 million last year after he resigned as president and chief operating officer of Minneapolis-based U.S. Bancorp. Mr. Heasley ultimately took a job as head of First USA, the credit card operations of Bank One.
At Wells Fargo & Co., chairman Richard C. Kovacevich received a salary of $995,000 last year plus a bonus of $5.48 million, for a combined increase of 18% from 1999, not including options or restricted stock. Since Paul Hazen, Wells non-executive chairman, stopped being an employee, Mr. Kovacevich has been the highest-paid executive at the San Francisco.
Mr. Hazen, who was chairman chief executive officer of the legacy Wells Fargo until its sale to Mr. Kovacevichs Norwest Corp. in 1998, received a lump-sum cash payment of $21 million when he relinquished responsibility for day-to-day operations. Wells Fargo shares rose 38% last year.
At Citigroup, Mr. Weills former counterpart, John S. Reed, received cash compensation that included a salary of $301,641, a bonus of $5 million, and additional payments of $96,184, mostly for travel. Mr. Reeds compensation was 82% lower than in 1999, but he didnt work a full year; officially, he retired from the company in April.
Other Citigroup executives got big boosts in pay last year. Michael A. Carpenter, the head of corporate and investment banking, got a salary of $800,000 and a bonus of $8.8 million, even as the investment banking business foundered in the final months of the year. Mr. Carpenters cash compensation was 68% higher than in 1999.
Victor J. Menezes, head of Citigroups sprawling emerging markets operations, got a 42% increase in cash compensation, including $800,000 in salary and $4.3 million in bonus. Former Treasury Secretary Robert E. Rubin, who joined Citis board and its office of the chairman as a senior adviser in October 1999, received a salary of $1 million last year and a cash bonus of $10.2 million.
James E. Rohr, who took over last April as chief executive officer of Pittsburgh-based PNC Financial Services Group, had a 34% increase in cash compensation last year, with a salary of $836,120 and a bonus of $2.6 million. PNC shares rose 64% during the year.
Meanwhile, Thomas OBrien, who stepped down as PNCs CEO last April, had a salary of $411,662 last year and a bonus of $1.13 million. In 1999, his last full year in charge of day-to-day operations, Mr. OBriens cash compensation included a salary of $992,308 and a bonus of $3.4 million.
Laura Mandaro contributed to this report.