M&T Bank Corp. said it adjusted compensation for its five top executives to comply with federal rules for banks that received TARP money, paying them base salaries with a mix of stock and cash, plus long-term stock awards, with no cash bonus.
In the past, M&T has favored cash bonuses rather than using stock shares as base salary. But the TARP rules prohibit cash bonuses.
The pay rules were issued by the U.S. Treasury Department in June 2009, in the wake of intense criticism of pay packages at some bailed-out companies. In particular, the rule bars cash bonuses as long as the company has federal bailout money under the Troubled Asset Relief Program, or TARP.
M&T originally took $600 million in TARP money in December 2008 but gained additional TARP funds when it bought Provident Bankshares Corp. of Baltimore in 2009 and will gain another $330 million from its pending purchase of Wilmington Trust Corp., for a total of $1.08 billion.
According to a filing with the Securities and Exchange Commission, M&T directors this month reset the pay packages for CEO Robert G. Wilmers, Chief Financial Officer Rene F. Jones, President Mark J. Czarnecki, Vice Chairman Michael P. Pinto and Executive Vice President Kevin J. Pearson.
Under the changes, Wilmers is eligible to receive up to $2.4 million for 2011, including a cash salary of $750,000, a stock salary of $1 million and a TARP-restricted stock award of $650,000. That's up from a total of $2.1 million last year but still down from $2.65 million in 2009.
Jones can get $1.5 million, including $550,000 in cash, $525,000 in a stock bonus and $425,000 in restricted stock. That's up from $1.2 million last year and $1.135 million in 2009.
Czarnecki and Pinto can each get up to $2.35 million, including $700,000 in cash, $1.05 million in stock salary and $600,000 in restricted stock. They each received $2.05 million last year and $2.275 million in 2009.
And Pearson is eligible for up to $1.6 million, including $550,000 each in cash and stock salary, and $500,000 in restricted stock. By comparison, he earned $1.465 million last year and $1.38 million in 2009.
The stock salary was effective Jan. 2 and will be paid in bi-weekly installments starting Feb. 11. However, the company also barred the executives from selling or transferring the restricted shares until M&T repays its TARP money or Jan. 1, 2013, whichever comes first.
The restricted stock will be awarded Friday but will vest in three stages, starting in January 2013.