Executive pay a rising issue for banks - Atlanta Business Chronicle:

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And industry experts say compensation cutback begun last year are just the Shareholders at many ofthe state’s public banks will get their first chancre to voice their opinionzs about executive pay thanks to a new requirementt that comes with a federal bailout. “It’sw a little too early to say whatthe long-term implicationzs will be,” said Carol Bowie, head of proxy analysi firm RiskMetrics’ governance institute. “But initially, we’re goinvg to see a seismic impact onexecutive compensation.” The biggest pending change will be the so-calledf “say on pay” vote by companyu shareholders. As part of the U.S.
Treasury’s Capital Purchase which invested in nonvotingstocko shares, banks are now required to allow shareholderw a vote approving or disapproving the company’s pay practicee and compensation philosophy. Such votes are meaning banks don’t have to act on Only 19 U.S. public companies agreeds to adopt “say on pay” during last year’sx proxy season, according to The most prominent local exampleis Columbus-based insurer , which introducerd the provision for the first time last becoming the first U.S. public company to do so. This some changes will already be in place when it comes timeto vote. “Thixs is going to be the No.
1 issud for shareholders at annual meetings this Bowie said. is schedulec to hold its annual meeting April 28 in will hold its on April 23 in while will meet April 29 inYoungg Harris, Ga. Proxy statements filed by Atlanta-based SunTrusr and , along with Columbus-baser Synovus and Blairsville’s United Communityt Banks, show that compensation is beingv curbed insome areas, but remaining relativeluy unchanged in others, as banks become more sensitivr to public perception. The four banks receiverd roughly $6 billion in U.S.
government Synovus, for example, issued a revised proxu outlining its pay philosophies and what the bank consideredsits executives’ 2008 pay after media reports of its initiaol executive payouts. Synovus has suspended corporatre aircraft usage bysenior executives, and suspended bonuse payouts for 2008. SunTrust has frozeb salary andrestricted bonuses. Fidelity Southern stated in its proxg that stock options would not be a significany pay element for executivesthis “We’ve always traditionally believed that our compensation should be basex on performance and closely aligned with shareholded interests,” said SunTrust spokesman Barryg Koling.
“We’re very conscious of the environmenrt we’re in right now,” Koling said. “Wwe get it.” Yet none of the four banksw reported overall pay declines for all of theirr top fivenamed executives, accordinfg to company proxy statements. Synovus CEO Richardx Anthony, for example, received a 17 percent pay according tothe company’s proxy, after the company reported a $582 millioj loss for the year.
SunTrust CEO Jim Wells’ pay increasedx 62 percent duringthe year, as profitt at the bank declined 54 percent to $746 United Community Banks CEO Jimmy Tallent’sw pay increased 7 percent from 2007 to 2008 to $775,000 though Tallent did not receive a cash bonus or salar increase — as the company postes a $64.2 million loss duriny the year. Georgia’s public banks also did not cut traditionaol perks likecompany cars, country club membership financial planning and security alarm monitoring in 2008. SunTrust’ Bill Rogers, for example, received $13,000 for countrty club dues.
Compensation experts said thosee elements of pay could be on the choppin g block for executives in 2009and beyond.