Five top executives at M&T Bank saw their bonuses drop by 20 percent in 2016 as the bank’s performance fell short of its expectations.
Details about the company’s executive pay were included in a regulatory report filed late Wednesday.
“For M&T’s management team, compensation has always been determined by performance, both of the individual and of the company,” said C. Michael Zabel, an M&T spokesman. “While M&T performed well in another difficult year, our return to shareholders neared the industry average last year, down somewhat from our long-term top-quartile results, and compensation was adjusted accordingly.”
Total compensation for chairman and CEO Robert G. Wilmers in 2016 was $3.5 million, down 5.3 percent from the year before. His salary was unchanged at $950,000, but some other factors of his compensation declined. His bonus dropped to $340,000.
His salary will increase this year to $975,000, according to the filing.
Wilmers on Wednesday also released his annual letter to shareholders. In the message, he called for a “reform of the reforms” implemented following the financial crisis, to allow regional banks to grow.
[Related: Read the full text of Wilmer's letter]
He said regulation “meant to protect Americans has unwittingly inflicted unintended consequences across the country – the profound impacts of which are only now coming to be fully appreciated by the public and understood by the legislators themselves.”
Wilmers’ letter focused on a topic he has dealt with before, but remains no less significant to him: the impact of federal regulations that treat the nation’s largest, most complex financial institutions the same as regional, traditional banks like M&T. Those two distinct categories of banks should not face the same “onerous requirements,” given their different risk profiles, he said.
“One-size-fits-all rulemaking has thus created an uneven playing field, to the particular disadvantage of regional banks,” he wrote. “The largest banks can bring their vast resources to bear in addressing these new measures of oversight, while the smallest banks escape many of the most punitive regulations altogether.”
Wilmers’ annual message is widely read, since it touches on topics – such the health of the economy and the state of banking – that go well beyond M&T’s own results. Wilmers is also a respected voice in his industry, guiding a bank with nearly 17,000 employees and about $123.4 billion in assets.
M&T’s cost of complying with regulation soared from $90 million in 2010 to $440 million last year, and represented nearly 15 percent of the bank’s total operating expenses, Wilmers said. During 2016, M&T faced 27 different examinations from six regulatory agencies, he said, and examinations were ongoing for 50 of the 52 weeks of the year.
The time and cost of complying with expanded regulations hinders traditional banks’ ability to “introduce new products and technologies, or pursue other projects that might be in the best interests of their shareholders, customers and communities,” he said. Annual “stress tests” and increased liquidity requirements have also created impediments for regional banks to grow, Wilmers said.
Wilmers said regional banks remain vital to the fabric of the economy, taking deposits and making loans that enable small businesses to grow and create jobs. He said “a more tailored approach to regulation would benefit both regional banks and their communities, helping to recover the ground lost over the last decade.”
In an additional note, Wilmers paid tribute to two members of the board of directors who died last year, Richard G. King and Patrick W.E. Hodgson, as well as Mark J. Czarnecki, the bank’s president and chief operating officer, who died last month.
“Others may assume his duties but he will never be replaced,” Wilmers said of Czarnecki.
M&T will hold its annual shareholders meeting on April 18.