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Posted: Tue Mar 20, 2007 4:00 pm Post subject: $97 million payout for banking CEO
$97 million payout for banking CEO
Published: Mar 20, 2007 01:45 PM
Modified: Mar 20, 2007 01:45 PM
The Charlotte Observer
By RICK ROTHACKER The Charlotte Observer
Bank of America Corp. Chairman and Chief Executive Ken Lewis saw his total compensation skyrocket to $97 million in 2006, spurred by a previously announced plan to cash in stock options.
Lewis made $19.9 million from his salary, stock award, non-stock bonus and perks, a slight increase from 2005. But he also reaped $77 million from exercising accumulated stock options, according to the bank's annual proxy statement filed Monday.
The big payday comes as investors and lawmakers have increasing concerns about executive pay packages that are roaring past the wages of the average worker. For Lewis, who took over as CEO in 2001, it was his biggest pay check since taking home $38 million in 2003, which included $20.3 million in option gains.
It's also likely the biggest annual pay package for an executive at a Carolinas-based company.
Compensation expert Kevin Murphy said it's not surprising to see such big option gains for an executive who has tallied numerous stock option grants over the years. "It's a reflection that he was granted a lot of options and the stock has done very well," said Murphy, a professor of finance at the University of Southern California's Marshall School of Business.
The Observer counts salary, non-stock bonus, stock awards, perks and exercised options toward total pay. Under new Securities and Exchange Commission guidelines, companies are disclosing much more information about executive pay, although it's made it more difficult to make comparisons to previous years.
Options are a right to buy a company's stock at a certain price over a period of usually 10 years. Many companies, including Bank of America, are increasingly moving away from options, instead giving larger outright grants of stock that vest over a period of years. The theory is that this makes managers act more like shareholders, instead of looking for big gains as options come due.
Under Lewis in 2006, the Charlotte bank posted a record $21.1 billion in profits and briefly eclipsed Citigroup Inc. as the world's biggest bank by market value. In its acquisition of credit card issuer MBNA Corp., the bank beat cost-cutting projections, which has included plans to eliminate about 6,000 jobs.
For the year, the bank's shares posted a total return of 20.68 percent, besting the 17.02 percent return of the Philadelphia KBW Bank Index. The shares closed Monday at $50.37, up 75 cents.
In the proxy, the compensation committee of the board said it believes its executive pay "reasonable and appropriate in amount" and "directly correlated to our performance." The bank compares his pay to other big banks and other large global corporations.
The $19.9 million Lewis made last year comprises $1.5 million in salary, $11.7 million in stock awards, $6.5 million in non-stock bonus and $219,969 in perks.
The $11.7 million stock award, under SEC guidelines, represented how much the company counted as an expense during 2006, meaning the award actually was for 2005 performance and prior years. The company awarded Lewis about $11.1 million in stock in February for his 2006 performance.
Bank of America said in August that Lewis planned to exercise 4.08 million options to buy the company's stock over a period of five months. These shares were awarded over a number of previous years.
While Lewis exercised the options, he did not sell all the shares. The bank has said Lewis would cash in enough shares to pay for the initial cost of buying the stock and associated taxes but that he would keep the rest of the shares, a sign of faith in the company's future performance.
In 2006, Lewis also received additional options to buy company stock valued at about $5 million. The Observer doesn't count those toward total pay because their value will not be realized until the future.
Bank of America Corp. rival Wachovia Corp. paid its Chairman and CEO Ken Thompson $16.4 million for 2006, according to its proxy released earlier this month. Thompson, whose bank also produced record profits last year, had stock option gains of about $833,000.
Bank of America's proxy also notified shareholders of the bank's April 25 annual meeting. Stockholders can vote on a number of initiatives, including a proposal to split the titles of chairman and CEO held by Lewis.
2006 Compensation
Here's how Bank of America's other top executives fared: AL DE MOLINAformer chief financial officer, $10.6 million
GENE TAYLOR, corporate/investment bank, $11.9 million
AMY WOODS BRINKLEY, risk, $11.3 million
BARBARA DESOER, technology and service, $8.4 million
LIAM MCGEE, consumer and small business, $10.3 million
BRIAN MOYNIHAN, wealth and investment management, $10 million
NOTE: The Observer counts salary, bonus, stock awards, perks and option gains.
Joined: Aug 22, 2006 Posts: 4481 Location: Miami, Florida
Posted: Tue Mar 20, 2007 4:37 pm Post subject:
Now for some humor on Bank of America. This guy had it wrong for 2 reasons 1) there is more money deposited by illegals on fridays and they carry cash and 2) wrong branches as the illegals are mostly in South Dade County.
Posted on Tue, Mar. 20, 2007reprint or license print email
1 man hits 2 banks in 90 minutes
By TIM CHAPMAN
tchapman@MiamiHerald.com
If at first you succeed, try again.
That was the motto of an unidentified man who robbed a Miami Bank of America at 10:30 a.m. Tuesday, then robbed a second Bank of America at 12:15 p.m.
He appears to have gotten away both times.
Police would not say whether the man used a gun, another weapon or some other means of demanding money.
The man first hit the bank branch at 5000 Biscayne Blvd. Although he got away unscathed, police do have his photograph as captured by a surveillance camera.
The photo came in handy 90 minutes later when police were able to show it to customers and employees at the second bank branch, at 313 NW 36th St.
About 20 police units were seen responding to the second robbery, which happened in a building that houses a police internal affairs bureau. Canine units were called to check the theory that the robber was somewhere still in the building. He wasn't.
The man is described as black with a full beard, in his 20s and wearing a patterned shirt.
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