Birmingham-based Regions Financial, which got $3.5 billion in the U.S. Treasury bank bailout, was especially generous, even though its stock price has fallen from $35 in 2006 to $3.20 this week.
According to the proxy statement made public Tuesday, Regions President and CEO C. Dowd Ritter received total compensation of $9,261,865 in 2008. In 2007, he earned $7,713,138. In 2006 he earned $18,433,987. His three-year haul: $35,408,990.
Ritter is eligible for retirement. For better or worse, he didnt. Had he retired at the end of 2008, his annual benefit would be $2,311,118, according to the proxy.
The highest-paid Regions employee for 2008 was Memphian Douglas Edwards, former CEO of Morgan Keegan, a division of Regions since being acquired several years ago. Edwards left Regions in 2008. His total 2008 compensation, some of which was dictated by prior agreements with Morgan Keegan, was $10,085,834.
Over at Atlanta-based SunTrust Bank, CEO James M. Wells III earned total compensation of $5,450,214 in 2008. His three-year haul: $15,026,578. SunTrust got $4.9 billion in the bailout. Its stock price has fallen from $84 in 2006 to $11 this week.
The full proxy statements can be viewed on the companies' websites. Compensation is approved by a committee of outside board members who are paid $80,000 to $100,000 a year for their wisdom and trouble.
The bailout -- technically the American Reinvestment and Recovery Act of 2009 -- is supposed to impose limits on executive compensation, so for banks it's a matter of getting it while the getting is good. From the Regions proxy: "At this time, the compensation standards under AARA have not yet been developed. However, we expect the standards will require a substantial alteration to our compensation program."
Translation: The jig is almost up. Meanwhile, theres more to come in 2009.
This note from the Regions compensation committee:
"As a result of the reduction in 2008 annual bonus and the operation of long-term plans, the compensation committee determined to award additional equity opportunities in 2009 to our senior management to provide them with the opportunity to benefit appropriately from our long-term performance."
What this means in plain English is that the top dogs are getting fresh stock options that, in contrast to the ones they earned previously, could actually be worth something in a year or two because the "strike price" or price at which the option can be exercised will be around $4 or $5 instead of $30 or more. When a stock is priced at $3, it is worth 33 percent more if the price rises $1 to $4 per share. Such price moves are not uncommon when stock prices fall below $5 a share.
Bottom line: Dowd Ritter and the gang could be sitting pretty by the end of the year, while ordinary shareholders wait for Regions to climb back to $25 or $35 a share.
--by John Branston