PNC boosts CEO salary to bypass bonus limit: UPDATE
Congress may have capped cash bonuses, but US-backed banks can boost salaries and stock grants, notes PNC
"On August 19, 2009, the Personnel and Compensation Committee of PNC's Board of Directors took the actions described below with respect to compensation for some of our senior executive officers," writes Pennsylvania's largest bank in this SEC filing.
"These actions were taken to address the impact on PNC executive compensation of the Interim Final Rule on TARP Standards for Compensation and Corporate Governance issued in June 2009 by the U.S. Department of the Treasury," putting the TARP pay limits of last year's Emergency Economic Stabilization Act and this year's American Recovery and Reinvestment Act of 2009 into force.
"The restrictions under the Interim Final Rule include, effective June 15, 2009, a prohibition on the payment or accrual of bonuses (including equity-based incentive compensation) to the five "senior executive officers" (normally the same as the named executive officers shown in a company's proxy statement) and the next 20 most highly compensated employees.
"A limited exception to this prohibition would be the award of long-term restricted stock with a value not exceeding one-third of total compensation. The Interim Final Rule also requires a partial forfeiture of some of the compensation we provided prior to June 15, 2009."
And so: "The Committee approved salary increases for each of James E. Rohr, Richard J. Johnson, William S. Demchak, Joseph C. Guyaux, and Timothy G. Shack, effective July 1, 2009, with the increase to be paid entirely in the form of stock units... The annual rate of base salary being paid in the form of stock units (in addition to the amounts already being paid in the form of cash) to these executive officers will be as follows: Mr. Rohr $3,500,000, Mr. Johnson $775,000, Mr. Demchak $3,300,000, Mr. Guyaux $1,530,000, and Mr. Shack $990,000."
The bonuses start June 30, so each man gets half that much this year. Plus his cash salary, which ranges for $1 million for CEO Rohr, to about half that for Johnson and Shack."
See the Pittsburgh Tribune-Review here. After all, "they didn't cap total compensation, just the (bonus)," said PNC spokesman Brian Goerke.