Solid momentum in 1997 earnings at some of the nation's largest banks pumped up bonuses paid to top bankers, according to annual bank proxy statements filed with the Securities and Exchange Commission.
The statements filed so far indicate a trend toward small raises in base pay and big one in bonuses. Many banks, including Chase Manhattan Corp., NationsBank Corp., and Wells Fargo & Co., had not filed their proxy statements as of midday Wednesday.
For a select group of top bankers, compensation has risen to be more in line with nonbank competitors, said compensation consultants.
Frank N. Newman, chairman and chief executive officer at Bankers Trust New York Corp., got a 9% base pay raise last year, to $900,000. But his bonus more than doubled, to $7.5 million. Of that, $5.7 million was cash.
Profits at Bankers Trust rose 13% last year, to $866 million.
Across the street in Manhattan's financial district, Merrill Lynch & Co.'s chairman and chief executive officer, David H. Komansky, also received a base salary of $900,000. His cash bonus of $7.1 million last year represented a 9% raise.
That the two executives had similar cash compensation packages last year is a matter of symbolic importance, consultants said.
"It's in line with the convergence of the financial services industry," said Charles Wendel, a management consultant at Financial Institutions Consulting. "You would not have seen the typical bank chairman make as much as an investment banker five years ago."
Other bankers, including Chase chairman Walter V. Shipley, are expected to receive cash compensation commensurate with that for heads of investment banks, consultants said. Mr. Shipley, whose 1997 pay has not been disclosed, received $5.7 million in salary and cash bonus in 1996.
Most of the industry has some catching up to do, however.
John S. Reed, Citicorp's chairman and chief executive, got a 3% raise in salary last year, to $1.5 million. His bonus grew 20%, to $2.5 million. Net income at the bank declined 5% last year as the bank took a $885 restructuring charge in the third quarter.
At BankBoston Corp., chairman and chief executive Charles K. "Chad" Gifford, received the same base pay as he did in 1996, $800,000. But his bonus grew nearly 40%, to $2.5 million. The bank's proxy statement said Mr. Gifford was rewarded for the superior financial performance of the company in 1997.
BankBoston's profits rose 35% last year, to $860 million.
One chief executive saw a pay cut. Douglas A. "Sandy" Warner 3d, head of J.P. Morgan & Co., got a 15% raise in base pay, to $691,667. But his bonus was slashed 11%, to $2.3 billion. The bank's proxy statement said the lower compensation reflected Morgan's 7% decline in 1997 earnings.