UNMATCHED COVERAGE
AJC reporter Russell Grantham is tracking what Georgia’s major public companies pay their top executives. Look for periodic news and trend stories in the weeks ahead, as well as up-to-date statistics, as Grantham pores through this year’s corporate proxy statements.
SunTrust Banks paid its chief executive $9.5 million last year, a 2.9 percent raise, two years after the Atlanta-based financial institution repaid a federal bailout that restricted executive pay.
William H. Rogers Jr., chairman and CEO, was awarded $2.8 million in salary and bonuses, $5.7 million in stock-related awards and $99,473 in perks.
Rogers’ 2012 compensation also included a $936,365 increase in the value of his pension.
The Atlanta Journal-Constitution’s look at Rogers’ compensation is part of a weeks-long analysis of the pay of Georgia’s top executives. Executive pay at public companies has drawn increased scrutiny in recent years as the gap between those salaries and most workers’ wages has widened. Since last year, federal legislation has required most companies to hold non-binding “say on pay” votes at their annual shareholder meetings.
Rogers’ 2012 pay raise was paltry compared to the nearly three-fold pay increase he got in 2011 after being named SunTrust’s CEO. He replaced former chairman and CEO James Wells III, who retired at the end of 2011.
Meanwhile, other SunTrust executives who also took on new duties in 2011 saw big pay increases last year.
They included Chief Financial Officer Aleem Gillani, whose pay increased 128 percent, to $4 million; Chief Risk Officer Thomas E. Freeman, with a 43 percent raise to $4 million; and former chief financial officer Mark A. Chancy, with a 49 percent raise, to $5 million. In 2011, Chancy was named to a newly created post over wholesale banking.
SunTrust’s big bumps in executive pay come after a few years of relative austerity under TARP, the federal bailout program that aided many struggling banks during the financial crisis. TARP blocked banks from paying bonuses, stock options or large stock awards to executives.
SunTrust restored those types of compensation after repaying nearly $5 billion in TARP money in early 2011.
SunTrust suffered heavy losses on commercial and mortgage loans during the 2007-2009 financial crisis, but its profits have since climbed. The bank reported a nearly $2 billion profit last year, although $753 million of that came from the sale of a large chunk of Coca-Cola stock.
Likewise, SunTrust’s shareholders saw a 58 percent return last year, but have only partly recovered from earlier losses. Including last year’s gain, the bank’s shareholders still lost more than 60 percent during 2007-2012.
Such swings in SunTrust’s profits and stock price, along with continuing legal repercussions from the mortgage meltdown, have played havoc with the company’s formulas for setting top executives’ pay.
SunTrust’s executive pay is linked to shareholder return and certain profit measures.
And indeed, executives forfeited millions of dollars of stock-related awards in 2011 due to the stock’s poor performance in recent years. Last year, SunTrust’s board of directors also ignored the big gain from the sale of Coca-Cola stock that, according to the formula, could have given a boost to executives’ bonuses.
In 2011, directors also ignored the cost to settle a mortgage lawsuit filed by several states and federal regulators that threatened to shrink the executives’ bonuses. That decision increased by $81 million the profit measure that they used to calculate executives’ bonuses.
