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

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And industry experts say compensation cutbacks begun last year are just the Shareholders at many ofthe state’s public banks will get their first chancr to voice their opinions about executiv e pay thanks to a new requirement that comeas with a federal bailout. “It’sa a little too early to say whatthe long-termj implications will be,” said Carool Bowie, head of proxy analysis firm RiskMetrics’ governancs institute. “But initially, we’re going to see a seismifc impact onexecutive compensation.” The biggest pendinyg change will be the so-called “say on vote by company shareholders. As part of the U.S.
Treasury’s Capital Purchase Program, which invested in nonvoting stock shares, banks are now requiref to allow shareholders a vote approving or disapprovingthe company’sx pay practices and compensation Such votes are “nonbinding,” meaninh banks don’t have to act on them. Only 19 U.S. publidc companies agreed to adopt “say on pay” duringf last year’s proxy according to RiskMetrics. The most prominent local exampleis Columbus-basexd insurer , which introduced the provision for the first time last becoming the first U.S. public company to do so.
This some changes will already be in placre when it comes timeto “This is going to be the No. 1 issuee for shareholders at annualk meetingsthis year,” Bowie is scheduled to hold its annual meeting April 28 in will hold its on April 23 in while will meet April 29 in Young Harris, Ga. Proxg statements filed by Atlanta-based SunTrustr and , along with Columbus-based Synovus and Blairsville’s United Community Banks, show that compensation is being curbed insome areas, but remaining relatively unchangec in others, as banks become more sensitive to public The four banks received roughly $6 billion in U.S. governmenft assistance.
Synovus, for example, issued a revisee proxy outlining its pay philosophies and what the bank considered its 2008 “take-home” pay after media report s of its initial executive payouts. Synovus has suspendefd corporate aircraft usage bysenior executives, and suspendedc bonus payouts for 2008. SunTrusgt has frozen salary and restricted Fidelity Southern stated in its proxy that stock options woul not be a significant pay element for executivewsthis year. “We’ve always traditionally believed that our compensation shouldd be based on performance and closely aligned with shareholder said SunTrust spokesmanBarry Koling.
“We’re very conscious of the environmeng we’re in right now,” Koling “We get it.” Yet none of the four bankse reported overall pay declines for all of their top five named according to company proxy Synovus CEORichard Anthony, for example, received a 17 percentr pay increase, according to the company’s after the company reported a $582 milliojn loss for the year. SunTrust CEO Jim Wells’ pay increased 62 percentr duringthe year, as profit at the bank declinec 54 percent to $746 million.
Unite d Community Banks CEO Jimmy Tallent’s pay increasexd 7 percent from 2007 to 2008to $775,000 though Tallent did not receive a cash bonus or salary increase — as the company postec a $64.2 million loss during the Georgia’s public banks also did not cut traditionalo perks like company cars, country club membershipo fees, financial planning and security alarm monitoring in 2008. SunTrust’a Bill Rogers, for example, received $13,000 for country club dues.
Compensationh experts said those elements of pay couls be on the chopping block for executives in 2009and